Frequently Asked Questions: #pma-penanaman-modal-asing-company

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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