PT PMA Company Incorporation

A PT PMA, or Foreign Investment Limited Liability Company, is the designated legal entity for foreign nationals and companies to enter and participate in the Indonesian market. It is the most secure and comprehensive way to establish a business, giving you the same rights and protections as local companies.The key legal requirement for a PT PMA is a minimum total investment value of IDR 10 billion (approximately $650,000 USD), excluding the value of land and buildings. This figure is a formal declaration of your commitment to the Indonesian economy and is outlined in your business plan. It's crucial to understand that this is an investment plan, not a lump sum that must be immediately deposited into a bank account.Phased Capital Injection & Practical RealityThe Indonesian government recognizes that large investments are often made over time. The IDR 10 billion is the declared Authorized Capital of the company, and the regulations allow for this capital to be injected gradually over a period of three years, in line with your business plan and operational needs.While the law requires this capital to be paid up and reflected in your financial reports, in practice, the government's enforcement of the full IDR 10 billion injection is tied to specific activities, such as obtaining certain high-risk business licenses or undergoing an audit. For most businesses, the government primarily tracks your investment through mandatory quarterly or semi-annual reports. As long as you are actively operating and reporting, the government generally allows the capital injection to follow your business's organic growth and financial lifecycle.Appointed Director and CommissionerEvery PT PMA is required by Indonesian law to have a formal corporate structure, including a Board of Directors and a Board of Commissioners. We will need to know who you plan to appoint to these critical roles.Director: The Director is responsible for the company's day-to-day operations and acts as the legal representative of the company. A PT PMA must appoint at least one Director.Residency Requirement: The Director must be an Indonesian resident. This means the individual can either be an Indonesian citizen or a foreigner who holds a valid stay permit (KITAS), such as an Investor KITAS or a Working KITAS.Legal Responsibility: The Director is personally liable for any losses incurred by the company due to negligence or unlawful acts.Commissioner: The Commissioner's role is supervisory. They are tasked with overseeing the Director's actions and providing advice to the company's management. A PT PMA must have at least one Commissioner.Residency Requirement: There is no residency requirement for the Commissioner. A foreigner can hold this position without a KITAS, as their role does not involve daily management or require a work permit.Legal Responsibility: The Commissioner can also be held personally liable for company losses if they fail to perform their supervisory duties. Important Note: The same person cannot serve as both a Director and a Commissioner. Both roles are appointed by the company's shareholders via a General Meeting of Shareholders.Investor KITAS RequirementFor a foreigner to obtain an Investor KITAS (E28A), a personal stay permit that allows you to live and work in Indonesia as an investor, you must personally hold a minimum of IDR 10 billion in shares within the PT PMA. This is a crucial distinction. While the company's capital can be injected over time, your personal shareholding must meet this IDR 10 billion threshold to be eligible for this specific stay permit. This KITAS provides significant benefits, including a streamlined application process and exemption from the need for a separate work permit.Post-Establishment Compliance ObligationsOnce your company is officially established, it is subject to several ongoing compliance requirements mandated by Indonesian law. It is crucial to be aware of these obligations to ensure your business remains in good legal standing and avoids penalties, fines, or sanctions, including the suspension of your licenses.Investment Reporting (LKPM): As a PT PMA, you are required to submit a periodic Investment Realization Report to the Indonesian Investment Coordinating Board (BKPM). This report details your investment progress, workforce, and operational challenges. For medium and large businesses, this must be done quarterly through the OSS system.Tax Compliance: This is a continuous obligation that requires diligent and timely reporting.Monthly Tax Filings: Your company is responsible for filing a monthly tax report (SPT Masa). This includes withholding tax on employee salaries (PPh 21), payments to vendors/service providers (PPh 23), and other relevant transactions.VAT Reporting (PPN): If your company's annual revenue exceeds IDR 4.8 billion, it is mandatory to register for VAT and submit monthly VAT reports.Annual Corporate Tax: You must file an annual corporate income tax return (SPT Tahunan PPh Badan) and pay any corporate tax owed by the end of the fourth month following the close of your financial year.Social Security & Labor Compliance (BPJS): All companies in Indonesia are legally required to register their employees for the national social security programs.BPJS Kesehatan: Mandatory healthcare insurance for all employees.BPJS Ketenagakerjaan: Mandatory social security for employment, covering old age, work accidents, and death benefits. BPJS contributions must be calculated and paid on a monthly basis. Corporate Secretarial: The company must maintain up-to-date corporate records and fulfill secretarial duties. This includes holding an Annual General Meeting of Shareholders (AGMS) and reporting any changes to the company's structure (e.g., changes in shareholders, directors, or capital) to the Ministry of Law and Human Rights.Auditing: Depending on the company's size and revenue, it may be legally required to undergo an annual financial audit by a certified public accountant.Our service can extend to cover these ongoing compliance needs, providing you with peace of mind to focus on your core business operations.