Frequently Asked Questions: #minimumcapitalrequirements

The minimum capital requirements for a PMA (Penanaman Modal Asing) company in Indonesia are set by Ministry of Investment and Downstream Industry/BKPM Regulation No. 5 of 2025 (in force since October 2025):

• Total Investment Value: The minimum investment plan for a PMA company is more than IDR 10 billion (approximately USD 600,000) per 5-digit business classification (KBLI) per project location, excluding land and buildings.

• Issued and Paid-up Capital: The minimum issued and paid-up capital is IDR 2.5 billion per company — reduced from the IDR 10 billion that applied between 2021 and 2025.

• 12-Month Holding Requirement: The paid-up capital must be deposited into the company’s Indonesian bank account and remain there for at least 12 months after deposit.

• Joint Ventures: For joint ventures with Indonesian partners, the paid-up capital requirement applies to the company as a whole, with shares held in proportion to each party’s ownership percentage.

• Sector Exceptions: Some business activities calculate the investment value differently — for example, wholesale trade per 4-digit KBLI, and food and beverage services per 2-digit KBLI per location — and some sectors set higher thresholds. It’s essential to check the specific rules for your industry.

• Proof of Capital: Shareholders sign a capital statement, and the paid-up capital must be deposited in an Indonesian bank account under the company’s name.

• Gradual Investment: The IDR 10 billion investment plan is a commitment realized over time as the business develops — it does not need to be deposited up front. Realization is reported to the Ministry of Investment through periodic investment activity reports (LKPM).

• Capital Increases: Companies can start with the minimum required capital and increase it later as needed.

It’s important to note that these requirements may be subject to change, and certain business sectors or special economic zones might have different capital requirements. Always consult with a qualified professional or the relevant Indonesian authorities for the most up-to-date information regarding your specific business case.

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A PMA (Penanaman Modal Asing) company is a foreign direct investment entity in Indonesia that allows foreign investors to own and operate a business in the country. Key points about PMA companies include:

• Legal structure for foreign investment in Indonesia
• Allows foreign ownership of businesses, subject to certain restrictions
• Registered through the Online Single Submission (OSS) system, overseen by the Ministry of Investment and Downstream Industry (BKPM)
• Must comply with the Positive Investment List (Presidential Regulation 10/2021, as amended), which replaced the old Negative Investment List (DNI) and opens most sectors to full foreign ownership
• Requires an investment plan of more than IDR 10 billion (approximately USD 600,000) per business classification (KBLI) per location, with minimum paid-up capital of IDR 2.5 billion
• Offers benefits such as the ability to sponsor foreign work permits and conduct business activities across Indonesia
• Subject to specific tax regulations and reporting requirements for foreign-owned entities
• May require local shareholders in a small number of restricted business sectors
• Provides a formal structure for foreign investors to participate in Indonesia’s growing economy

Setting up a PMA company involves several steps, including OSS registration, company incorporation, obtaining necessary risk-based licenses, and ensuring ongoing compliance with Indonesian regulations. It’s advisable to seek professional assistance when establishing and managing a PMA company to navigate the complex regulatory environment effectively.

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