Foreign investors entering Indonesia must choose the correct legal structure from the outset; the wrong choice can delay operations, trigger licensing rejections, or create compliance exposure. As of 2026, the two primary options are the PT (local limited liability company) and the PT PMA (foreign-owned company), each governed by distinct regulatory frameworks.
This guide covers every material requirement for establishing a PT PMA in Indonesia in 2026, including the updated capital thresholds introduced by BKPM Regulation No. 5 of 2025, the OSS-RBA registration process, KBLI code selection, and ongoing compliance obligations.
All foreign investment in Indonesia is regulated by the Ministry of Investment and Downstream Industry Badan Koordinasi Penanaman Modal (BKPM).
Choosing Between PT and PMA: What Is a Local Company (PT)?
A PT (Perseroan Terbatas) is an Indonesian limited liability company governed by Company Law No. 40 of 2007, as amended by the Omnibus Law (Law No. 11 of 2020). Shares may only be held by Indonesian entities. Foreign individuals and corporations cannot be shareholders in a PT. For foreign investors, the PT structure is therefore inaccessible unless ownership is held through a nominee arrangement, which carries significant legal risk and is not recommended.
What is a Foreign-Owned Company (PT PMA)?
A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is an Indonesian limited liability company that permits foreign shareholding. It is the primary and legally recognised vehicle for foreign direct investment (FDI) in Indonesia.
A PT PMA operates under the same Indonesian Company Law as a domestic PT, but is additionally subject to the Investment Law (Law No. 25 of 2007) and supervised by the Ministry of Investment / BKPM. Under a PT PMA, foreign investors hold shares directly, operate commercially, hire staff, open bank accounts, and bid for government tenders, all with the same legal standing as domestic companies.
Advantages of PT PMA company formation:
- You can start conducting business almost instantly.
- Locally, you’ll have the same duties and rights as other businesses.
- All Indonesian tenders are open to you as long as you meet the tender requirements.
- Product registration and business permits can both be applied for.
What are the Sector Eligibility in the Positive Investment List?
Indonesia replaced the Negative Investment List (DNI) with the Positive Investment List under Presidential Regulation No. 10 of 2021, amended by Presidential Regulation No. 49 of 2021. Under this framework, most sectors are fully open to100% foreign ownership. Only a limited number of sectors remain restricted (partial foreign ownership permitted) or closed entirely.
Foreign investors should verify their specific five-digit KBLI code against the current
Positive Investment List before structuring their PT PMA. Sector eligibility is determined per KBLI, not by the company’s general description.
What are the advantages of establishing a PT PMA in Indonesia?
1. Full commercial operations
A PT PMA may generate revenue, enter contracts, and repatriate profits, unlike a Representative Office, which is prohibited from commercial activity.
2. Equal legal standing
A PT PMA holds identical rights and obligations to domestic companies under Indonesian law, including access to government procurement tenders.
3. Investor KITAS eligibility
Shareholders holding a minimum of IDR 1 billion in PT PMA shares may qualify for an Investor KITAS (Limited Stay Permit), providing legal residency in Indonesia.
4. Product and business licence access
PT PMAs may apply for product registrations (e.g., BPOM for food/cosmetics, KEMENKES for medical devices) and sector-specific operational licences.
5. Reduced entry capital since October 2025
Under BKPM Regulation No. 5 of 2025, the minimum paid-up capital has been reduced from IDR 10 billion to IDR 2.5 billion (USD 150,000), significantly lowering the barrier to entry.
What is KBLI Business Classification Codes?
A KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) is a five-digit code that classifies your business activity within Indonesia’s official industry taxonomy. It is not optional for every PT PMA to register one or more KBLI codes, and the selection directly determines:
- Whether foreign ownership is permitted in that sector, and at what percentage
- The applicable minimum investment threshold
- The risk classification level (Low / Medium-Low / Medium-High / High) under OSS-RBA
- Which operational licences are required post-incorporation
Selecting the wrong KBLI code can result in licensing rejection, inability to invoice for certain services, or forced amendment of the Articles of Association, all of which delay operations and incur additional professional fees.
Important: Under BKPM Regulation No. 5 of 2025, any supporting KBLI code that generates revenue or profit for the company must be explicitly listed in the Articles of Association (Akta Pendirian) and registered in the OSS system. Generic or overly broad KBLI classifications are no longer accepted.
How to Set Up a PT PMA in Indonesia: Registration Process (2026)
All PT PMA registrations are processed through the OSS-RBA (Online Single Submission-Risk-Based Approach) system, administered by the Ministry of Investment (BKPM).
The standard process involves the following stages:
Stage 1: Pre-incorporation
- Confirm KBLI code(s) and verify sector eligibility under the Positive Investment List
- Reserve a company name (minimum three words; name must not duplicate an existing registered entity)
- Prepare shareholder structure: minimum two shareholders (individual or corporate), one director, one commissioner
Stage 2: Notarial Deed & Ministry Approval
- A licensed Indonesian Notary drafts and authenticates the Deed of Establishment (Akta Pendirian) in Bahasa Indonesia
- Submit to the Ministry of Law and Human Rights (Kemenkumham) for legal entity ratification
- Receive the Ministerial Decree (SK Kemenkumham) confirming PT PMA’s legal standing
Stage 3: OSS-RBA Registration
- Register the company in the OSS system to obtain the NIB (Nomor Induk Berusaha: Business Identification Number)
- The NIB simultaneously functions as the company’s import/export identification number and MSME certificate (where applicable)
- Submit paid-up capital lock-up declaration via OSS (mandatory under BKPM Reg. 5/2025)
Stage 4: Tax and Regulatory Registration
- Register for NPWP (Nomor Pokok Wajib Pajak: Tax Identification Number) with the Directorate General of Taxes.
- Open a corporate bank account at an Indonesian bank and deposit paid-up capital (minimum IDR 2.5 billion)
Stage 5: Sector-Specific Licences
- Apply for any additional operational licences required by your KBLI risk classification (e.g., import licences, product registrations, special sector permits)
Typical timeline: 4-8 weeks from notarial deed execution to NIB issuance, subject to KBLI risk level and document completeness.
Conclusion
Setting up a PT PMA in Indonesia in 2026 requires careful planning, accurate KBLI classification, and full compliance with the latest PT PMA requirements and capital regulations under BKPM Regulation No. 5 of 2025. From understanding the minimum paid-up capital to navigating the OSS-RBA registration process, each step is essential to ensure a smooth and legally compliant business setup.
For foreign investors looking to enter the Indonesian market, partnering with 3E Accounting Indonesia ensures a seamless and efficient PT PMA company registration process. With expert guidance on PT PMA incorporation, compliance, and licensing, businesses can reduce risks, avoid delays, and focus on growth. Start your PT PMA setup in Indonesia with confidence and position your business for long-term success.
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Frequently Asked Questions
Under BKPM Regulation No. 5 of 2025, the minimum paid-up capital is IDR 2.5 billion (USD 150,000), deposited at incorporation. The total investment plan must exceed IDR 10 billion per KBLI code, excluding land and buildings.
Yes, in sectors fully open under Indonesia’s Positive Investment List (Presidential Regulation No. 49 of 2021). Eligible sectors include technology, consulting, trading, and tourism. Restricted sectors permit partial foreign ownership only; a small number of sectors remain closed entirely.
A PT (local company) restricts shareholding to Indonesian nationals and entities. A PT PMA permits foreign shareholders and is the legally recognised structure for foreign direct investment. Both are limited liability companies governed by Company Law No. 40 of 2007, but a PT PMA is additionally subject to investment regulations overseen by the Ministry of Investment or BKPM.
The standard registration process takes approximately 4-8 weeks from notarial deed execution to NIB issuance, subject to KBLI risk classification and the completeness of documents submitted to the OSS-RBA system.
OSS-RBA (Online Single Submission-Risk-Based Approach) is the Indonesian government’s integrated business licensing portal at oss.go.id. All PT PMA registrations, NIB issuances, licence applications, and LKPM investment reports are processed through this platform. Risk classification under OSS-RBA determines which licences are required and the timeline for approvals.
Under Article 27 of BKPM Regulation No. 5 of 2025, paid-up capital deposited into the company’s bank account cannot be withdrawn for a minimum of 12 months, unless used for asset acquisition, construction, or operational costs. Companies must submit a formal lock-up declaration through the OSS system at incorporation.
Failure to submit quarterly LKPM (Investment Realisation Reports) may result in administrative sanctions, including written warnings, suspension of licensing access via the OSS system, or, in sustained cases of non-compliance, revocation of business licences. The OSS-RBA system automatically monitors reporting activity.
