How to Set Up a Company in Indonesia (PT PMA)

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Indonesia has opened most sectors to foreign investment in recent years and has digitised company registration through the Online Single Submission (OSS) system. The standard vehicle for foreign investors is the PT PMA, a limited liability company with foreign shareholding.

1. Check the investment list

Under the positive investment list, most business lines are open to 100% foreign ownership, while some are reserved for local businesses or subject to foreign ownership caps or special conditions. Each activity is identified by its KBLI classification code, so define your business codes carefully from the start.

2. Capital and shareholders

• A PT PMA generally needs at least two shareholders (individuals or companies).
• For most activities, the planned total investment must exceed IDR 10 billion per business line and location, excluding land and buildings.
• A minimum issued and paid-up capital applies. It was reduced in 2025, so confirm the current figure before you plan the funding.

3. Main steps

1. Name approval through the Ministry of Law system.
2. Deed of establishment signed before an Indonesian notary, containing the articles of association.
3. Ministry approval of the company as a legal entity.
4. OSS registration to obtain the Business Identification Number (NIB) and the tax number (NPWP).
5. Risk-based licences: low-risk activities may only need the NIB; higher-risk activities need standard certificates or permits.

4. Practical difficulties for foreigners

• Nominee arrangements to get around ownership limits are prohibited and void; structure the investment properly from the start.
• Foreign staff need an approved expatriate manpower plan, a work permit and a stay permit (KITAS), and some positions are reserved for Indonesian nationals.
• Office address must meet zoning rules for the activity.
• Reporting: regular investment activity reports (LKPM) must be filed through OSS; missing them can lead to sanctions.

5. Tax

The standard corporate income tax rate is 22%, with VAT on most supplies and withholding taxes on dividends, interest and royalties paid abroad, which tax treaties may reduce.

The views expressed are personal and do not necessarily represent the position of NET CRAMAN. This article is for general information only and does not constitute legal or tax advice. Rules change over time; seek specific advice before acting.