How to Establish a Company in Indonesia as a Foreigner
How to Establish a Company in Indonesia as a Foreigner
Starting a business in Indonesia as a foreigner can be a great opportunity, especially with the country's growing economy and strategic location in Southeast Asia. Indonesia is Southeast Asia's largest economy with over 270 million people, abundant natural resources, and a rapidly expanding middle class. For foreign investors, one of the most common and legally recognized business structures is a PT PMA (Perseroan Terbatas Penanaman Modal Asing), which allows full or partial foreign ownership depending on the business sector.
With the help of Indo Legality Services, setting up a company in Indonesia becomes much easier and more efficient. From preparing legal documents to securing business licenses, every step is managed professionally to ensure full compliance with Indonesian regulations. This allows business owners to focus on building and growing their ventures without worrying about complex administrative procedures.
What is a PT PMA?
A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a foreign-owned limited liability company registered under Indonesian law. It is the primary legal structure available to foreign nationals and foreign corporations who wish to conduct commercial business activities in Indonesia. A PT PMA can be 100% foreign-owned in many sectors, or may require a local partner depending on the business classification under Indonesia's Positive Investment List.
As of 2026, following BKPM Regulation No. 5 of 2025, the minimum paid-up capital requirement for a PT PMA has been significantly reduced from IDR 10 billion to IDR 2.5 billion (approximately USD 150,000). This makes Indonesia more accessible than ever for small and medium foreign investors looking to establish a legal business presence.
Why Indonesia is a Top Destination for Foreign Investors
Indonesia consistently ranks among the top emerging markets for foreign direct investment. In 2025, total foreign direct investment into Indonesia reached IDR 900.9 trillion, with Singapore, Hong Kong, China, Malaysia, and Japan being the top source countries. Key reasons foreign investors choose Indonesia include:
- Large domestic market of over 270 million consumers
- Strategic location at the crossroads of major global trade routes
- Competitive labor costs with a young and growing workforce
- Rich natural resources across mining, agriculture, and energy sectors
- Government commitment to regulatory reform and investment simplification
- Growing digital economy and technology sector opportunities
Foreign investors from Australia, the United States, the United Kingdom, Saudi Arabia, the UAE, China, and Europe have increasingly established PT PMA companies in Indonesia across sectors including hospitality, technology, manufacturing, trade, and professional services.
Step-by-Step Guide to Establishing a Company in Indonesia as a Foreigner
Step 1 — Choose Your Business Activity (KBLI)
The first step is identifying the correct KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) code that matches your intended business activity. The KBLI code determines your foreign ownership percentage, required licenses, and capital requirements under Indonesia's Positive Investment List. Choosing the wrong KBLI can result in OSS rejection or compliance issues later. Indo Legality Services helps you select the most appropriate KBLI for your business goals.
Step 2 — Prepare Shareholder and Director Information
A PT PMA requires a minimum of two shareholders, at least one Director, and at least one Commissioner. Shareholders can be foreign individuals or foreign companies. You will need valid passport copies for all foreign shareholders and directors, along with proof of address and other supporting documentation.
Step 3 — Company Deed and Notarial Process
Our team coordinates with a certified Indonesian notary to draft and execute the Articles of Association (Akta Pendirian). This document defines the company's name, purpose, share structure, and governance. The notary submits the deed to the Ministry of Law and Human Rights for legal entity approval.
Step 4 — OSS Registration and NIB
Once the company deed is approved, we register your PT PMA through Indonesia's Online Single Submission (OSS) system to obtain the NIB (Nomor Induk Berusaha). The NIB is your company's primary business registration number and is required for all further licensing, banking, and tax registration.
Step 5 — Tax Registration (NPWP)
Every PT PMA must register for a corporate tax number (NPWP) with the Indonesian Directorate General of Taxes (DJP). This is required for invoicing, banking, and regulatory compliance. Indo Legality Services handles the NPWP registration as part of the complete incorporation package.
Step 6 — Business Licensing
Depending on your KBLI code and risk classification under OSS-RBA (Risk-Based Approach), you may need additional sector-specific licenses to legally operate your business. Our team identifies the required licenses and manages the application process on your behalf.
Step 7 — Corporate Bank Account Opening
After incorporation, your PT PMA needs a corporate bank account to receive the paid-up capital and conduct business transactions. We assist in selecting the right bank and preparing the required documentation for account opening.
PT PMA Requirements in Indonesia 2026
- Minimum paid-up capital: IDR 2.5 billion (~USD 150,000) per BKPM Reg. No. 5 of 2025
- Total investment plan: generally exceeds IDR 10 billion per KBLI code per location
- Minimum 2 shareholders (individuals or corporate entities)
- At least 1 Director and 1 Commissioner
- Registered business address in Indonesia
- Valid passport copies for all foreign shareholders and directors
- Quarterly LKPM (Investment Activity Report) submission to BKPM
Common Mistakes Foreign Investors Make When Setting Up in Indonesia
Many foreign investors encounter problems during PT PMA registration due to avoidable mistakes. The most common issues include selecting the wrong KBLI code, underestimating the total investment plan requirement, using a nominee arrangement that violates Indonesian law, failing to submit quarterly LKPM reports, and not properly structuring share ownership for Investor KITAS eligibility. Indo Legality Services helps you avoid these pitfalls with expert guidance from the very first consultation.
How Indo Legality Services Can Help
Indo Legality Services is a trusted legal and business services provider in Indonesia with extensive experience assisting foreign investors from Australia, Singapore, China, the United States, the United Kingdom, the Middle East, and Europe. We offer end-to-end PT PMA registration support with transparent pricing and no hidden fees.
Our services include complete PT PMA incorporation from start to finish, KBLI selection and Positive Investment List review, notary coordination and document preparation, OSS registration and NIB issuance, tax number (NPWP) registration, post-incorporation compliance support, and Investor KITAS application assistance.
Contact us today via WhatsApp or phone for a free consultation on establishing your company in Indonesia.
Frequently Asked Questions — Establishing a Company in Indonesia
Can a foreigner own 100% of a company in Indonesia?
Yes, foreigners can own 100% of a PT PMA in many business sectors that are fully open under Indonesia's Positive Investment List (Presidential Regulation No. 10 of 2021). Some sectors have ownership caps or require a local partner. Indo Legality Services reviews the Positive Investment List to confirm your ownership eligibility before incorporation.
What is the minimum capital required to set up a PT PMA in Indonesia in 2026?
Based on BKPM Regulation No. 5 of 2025, the minimum paid-up capital for a PT PMA is IDR 2.5 billion (approximately USD 150,000), reduced from the previous IDR 10 billion. The total investment plan per KBLI code generally must still exceed IDR 10 billion.
How long does it take to establish a company in Indonesia?
PT PMA registration typically takes 2 to 4 weeks from the start of the process to NIB issuance, provided all documents are complete and correct. Additional licensing may take longer depending on the sector. Indo Legality Services manages the process efficiently to minimize waiting time.
Do I need to be physically present in Indonesia to set up a PT PMA?
Not necessarily. Many steps can be completed remotely with documents sent digitally. However, some processes such as notarial signing may require physical presence or a power of attorney. Indo Legality Services advises on the most efficient approach for clients based outside Indonesia.
Can I get an Investor KITAS after setting up a PT PMA?
Yes, PT PMA shareholders with individual share ownership of at least IDR 10 billion are eligible to apply for an Investor KITAS (E28), which allows them to legally reside and manage their company in Indonesia. Indo Legality Services assists with the complete Investor KITAS application process.
What is the difference between a PT PMA and a local PT company in Indonesia?
A PT PMA is an Indonesian legal entity with foreign shareholders, while a local PT (Perseroan Terbatas) is owned entirely by Indonesian nationals. PT PMA companies must submit quarterly LKPM investment activity reports to BKPM and are subject to the Positive Investment List ownership restrictions.
What sectors are restricted for foreign investment in Indonesia?
Indonesia's Positive Investment List defines which sectors are fully open, partially restricted, or closed to foreign investment. Restricted sectors include certain media, telecommunications, and education businesses. Closed sectors include weapons manufacturing and cultural heritage management. Most business sectors including hospitality, technology, trade, and professional services are open to foreign investors.
Is Indo Legality Services able to assist clients from the Middle East?
Yes, Indo Legality Services has experience assisting clients from Saudi Arabia, the UAE, Kuwait, Qatar, and other Middle Eastern countries with PT PMA registration, visa applications, and KITAS processing in Indonesia. Our team provides multilingual support and remote assistance for international clients.
