PMA Company Capital Requirements in Indonesia (2026)

Updated 6 August 2026 · Okusi Associates · All guides

In October 2025 Indonesia reduced the minimum paid-up capital for a foreign-owned company (PT PMA) from IDR 10 billion to IDR 2.5 billion. The reduction is real. It is also only half of a two-part test — and the half that did not change is the one that determines what a foreign investor must actually commit.

One reform, two requirements

The governing regulation is now Peraturan Menteri Investasi dan Hilirisasi/Kepala BKPM No. 5 Tahun 2025 (‘Perka BKPM 5/2025’), promulgated on 2 October 2025 and in force from that date. It replaces the 2021 BKPM regulations and sits under Government Regulation No. 28 of 2025 on risk-based business licensing. Any guide still citing PP 5/2021 or Perka BKPM 4/2021 (and there are many) is describing a regime that no longer exists.

The regulation imposes two distinct capital tests on a PMA company, and both must be satisfied:

Test	Amount	Applies
Paid-up capital (modal ditempatkan/disetor)	At least IDR 2.5 billion (Art 26(10))	Per limited liability company
Investment plan (nilai investasi)	More than IDR 10 billion, excluding land and buildings (Art 26(2))	Per 5-digit KBLI business classification, per project location

At current exchange rates these are approximately USD 150,000 and USD 590,000 respectively.

The distinction matters more than the headline. The ‘Indonesia cut PMA capital by 75%’ framing now circulating treats the paid-up reduction as if it were the whole story. It is not. A company proposing three business classifications at two locations still faces an investment plan running to tens of billions of rupiah, while depositing IDR 2.5 billion in share capital. The paid-up floor was lowered; the commitment Indonesia expects of a foreign investor was not.

What ‘paid-up’ means in practice

At the licensing stage, less than might be expected. When the company obtains its business identification number (NIB) through the OSS system, the IDR 2.5 billion is evidenced by a self-declaration (pernyataan mandiri): a statement, stored electronically as part of the NIB, that the capital will not be moved out of the company’s account for at least twelve months. No bank statement is required at that point.

The twelve-month restriction (Art 27) is less confining than it sounds: the regulation excepts asset purchases, building construction, and company operations, which is to say essentially every legitimate use of working capital. It is best understood as a restriction on repatriating the deposit, not on spending it.

The stricter obligation comes from company law. Under Government Regulation No. 8 of 2021, at least 25% of a company’s authorised capital (modal dasar) must be issued and fully paid, and valid proof of the deposit must be filed electronically with the Ministry of Law within 60 days of the deed of establishment. This is a hard deadline with real proof attached. One structural consequence: since paid-up capital must be at least a quarter of authorised capital, the standard 2026 PMA deed reads authorised capital IDR 10 billion, issued and paid-up IDR 2.5 billion.

Two cautions. Sectoral law can and does impose higher figures: banking, insurance, finance companies and other regulated sectors set their own minima, and Perka BKPM 5/2025 expressly defers to them. And whilst the regulatory text is unambiguous, how the live OSS system and individual notaries apply the new floor in any given month is a separate question; practice tends to lag regulation in Indonesia, sometimes by a considerable margin.

Where the thresholds bend

The IDR 10 billion investment plan is applied with more nuance than the headline rule suggests (Art 26(3)-(8)):

Sector	Concession
Wholesale trade	Per first 4 digits of KBLI, not 5
Food and beverage services	Per first 2 digits of KBLI, per regency/city
Construction services	Per first 4 digits of KBLI
Property, accommodation, agriculture, plantations, livestock, aquaculture	Land and buildings count towards the IDR 10 billion
Special economic zones (KEK)	Concessionary treatment for qualifying activities, notably technology-based startups
Representative offices (KPPA, KP3A)	No capital requirement at all, though no revenue permitted either

A restaurant group, for instance, may operate any number of F&B classifications in one city under a single IDR 10 billion plan; a property developer reaches the threshold with the land it was going to buy anyway. Whether a given structure qualifies is a matter of classification detail, and classification detail is precisely where OSS applications go wrong.

Existing PMA companies

Companies licensed before October 2025 remain governed by the terms of their existing licences. Whether an existing PMA can claim the new IDR 2.5 billion floor (on renewal, relocation or expansion) is genuinely unsettled: the regulation’s transitional articles point in both directions, extending new provisions where ‘more advantageous’ whilst preserving old capital terms for licence extensions and expansions. Reducing capital already subscribed is a separate exercise again, requiring a shareholders’ resolution, an amendment to the articles, Ministry of Law approval and a creditor-objection period. It should be stressed that no existing company should assume the lower floor applies to it without specific advice.

The obligation that follows the money

Capital requirements in Indonesia are not a form-filling exercise that ends at incorporation. Every PMA company must report its investment realisation quarterly: the Laporan Kegiatan Penanaman Modal (LKPM), filed through OSS by the 15th of April, July, October and January. Failure to file for two consecutive periods, or filing four consecutive reports showing no realisation progress, triggers an escalating ladder of warnings, suspension of business activity, and ultimately revocation of the business licence. The investment plan a company declares at establishment is, in effect, a promise the OSS system checks every quarter. Undertakings of this kind are rarely forgotten by the Indonesian state.

Getting it right

The capital structure — how many classifications, how many locations, what goes in the deed, what gets declared in OSS — is set at establishment and expensive to change afterwards. Okusi Associates has established over 3,000 foreign-owned companies in Indonesia since 1997; the Indonesian PMA Company establishment package (US$ 1,763) includes capital structuring, the full OSS process, and the first LKPM filings.