Indonesia has become increasingly attractive to foreign investors in recent years due to its rapidly growing economy. Starting a business in Bali, in particular, is a highly promising project because of the year-round flow of tourists.
One of the most popular forms of business for foreign companies in Indonesia is PT PMA (Perseroan Terbatas Penanaman Modal Asing). This type of legal entity allows foreign entrepreneurs to fully control their investments in the country while complying with all local legal requirements. The information below will provide you with all the details about this business structure.
Foreign businesses in Indonesia take the form of PT PMA, which refers to a limited liability company with direct foreign investments. A company is classified as foreign (PT PMA) if any portion of its capital is owned by non-residents of Indonesia. Regardless of whether the foreign share is 1% or full ownership, the presence of foreign participation automatically qualifies the company as foreign.
There are also ownership restrictions. The allowed degree of foreign capital participation varies depending on the business category and can be either completely unrestricted or entirely prohibited for foreign investors. Access to various industries is regulated by the Negative Investment List (DNI), which is updated every three years.
The Indonesian government is eager to stimulate the country's economy through foreign investments. As a result, the process for foreign entrepreneurs to open businesses has become significantly easier. Now, there is no need to form partnerships with local residents or institutions when starting a business in Indonesia.
Additionally, by establishing a PT PMA, an investor has the opportunity to apply for a two-year KITAS (temporary residence permit) while holding the position of managing director or commissioner.
According to Perka BPKM No. 4/2021, a minimum authorized capital of 10 billion IDR is required to establish a PT PMA. After the company is registered, an initial deposit must be made into the company’s account to confirm the availability of capital. This amount can be increased as the business grows and used for its operational needs.
In Indonesia, foreign-owned companies must include at least two investors, who can be either individuals or legal entities. The company is required to appoint at least one director to manage the business and a commissioner to act as a representative.
Indonesia is characterized by a decentralized system of governance, where key authorities are concentrated at the district level. This means that for conducting business activities, it is important to decide on a location and clarify land use regulations, as district authorities are responsible for issuing the necessary licenses.
With the introduction of the One Single Submission system, the business registration process has become simpler and faster. Now, business registration takes 1–2 weeks, compared to the previous 10 weeks, provided that no special licenses are required for your company.
The list of necessary documents for registration includes:
1. Company name (no more than three words)
2. Areas of activity (up to 5 items)
3. Contact information (address, email, phone)
4. Founders' documentation (passport scans, 3x4 photos)
5. Management structure (list of directors and shareholders)
6. Legal documents (lease agreement or proof of land ownership) *
*Not required if you are registering a virtual office.
To start your business in Bali, you need to first decide on the industry and the proportion of foreign ownership.
To be able to pay taxes, you need to register with the tax office to obtain a tax identification number (NPWP). This can be done at the nearest tax office based on the company's address.
For official recognition of the company, you need to enter its details into the OSS (One Single Submission) system. After registration, your company will be assigned a unique number — the NIB. This number is required for company identification and also serves as an additional registration tool for:
• Import operations (replacing API-U)
• Company registration (replacing TDP)
• Interaction with customs authorities (NIK)
• Registering PT PMA in the health and social security systems (BPJS Kesehatan and BPJS Ketenagakerjaan)
Finally, the company needs to go through the environmental licensing process, such as obtaining UKL/UPL or SPPL, allowing it to proceed to the technical license stage. Usually, the business license is issued simultaneously with the NIB. If there are no special conditions, as in the case of trading or consulting, the licensing process goes smoothly without delays.
Opening a company to conduct business in Indonesia can be a complex process due to various bureaucratic requirements and the need to understand local laws. For this reason, investors often need competent legal assistance. Good Luck Group offers a full range of services for setting up a PT PMA in Indonesia — from the initial consultation to obtaining all necessary permits.
By seeking help from our specialists, you will receive professional support at every stage of establishing your business. Moreover, the Good Luck Group team can provide ongoing support for an already functioning company. Contact us if you have any questions!
