The minimum investment required for establishing a PMA (Penanaman Modal Asing) company in Indonesia is generally IDR 10 billion, which is approximately USD 700,000. This amount represents the total investment plan for the company, which includes both the fixed assets and working capital.

Key Points Regarding Minimum Investment:

  • Capital Requirements: The IDR 10 billion investment is not solely the amount that needs to be paid up front as capital. It includes the overall investment in the company over time.
  • Paid-Up Capital: The minimum paid-up capital requirement for a PMA company is also IDR 10 billion. However, regulations allow for a portion of this amount to be paid initially (minimum of IDR 2.5 billion), with the remainder to be invested within a certain period after the company starts operations.
  • Sector-Specific Requirements: Some business sectors may have different minimum investment requirements, either higher or lower, depending on the nature of the business and its capital intensity. These specifics are usually detailed in sectoral regulations or the Negative Investment List (DNI).

Additional Considerations:

  • Use of Capital: The investment capital can be used for various business-related expenses, including purchasing equipment, renting office space, hiring staff, and other operational costs.
  • Verification: The Indonesian Investment Coordination Board (BKPM) requires proof that the investment capital is available and will be used according to the business plan submitted during the application process.
  • Incentives: For investments in certain regions or sectors, the Indonesian government may offer incentives such as tax holidays or reductions, which could affect the overall investment strategy.

Practical Steps:

  1. Business Plan Submission: When applying for PMA company registration, investors must submit a detailed business plan outlining how the investment capital will be utilized.
  2. Capital Verification: Investors may need to provide evidence of their financial capability to meet the investment requirements, such as bank statements or financial guarantees.

Foreign investors considering setting up a PMA company in Indonesia are advised to consult with professional services like Okusi Associates. These firms can provide detailed guidance on investment requirements, assist with the preparation of necessary documentation, and help navigate the regulatory landscape to ensure compliance and successful company registration.

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