Navigating Your Way in Indonesia with Your PT PMA and PT Company
Indonesia is one country that many foreign investors would probably like to venture into. Indonesians may need the products and/or services that such investors would like to offer. Here is some information on setting up a PT PMA and PT Company in the country if you’re a foreigner.
What Does PT PMA and PT Company Mean?
The “PT” in the phrase refers to a company structure in Indonesia that is otherwise known as ‘“limited liability company”. A limited liability company like PT is the most popular form of company structure in Indonesia. Thus, it is the company structure you will encounter most often when you go there.
Why You Should Choose a PT Company Structure?
First, your PT company will stand the best odds of surviving in Indonesia. For one thing, you can easily raise capital simply by offering more company shares to investors. Second, the duration of leadership is dictated mainly by the shareholders. These shareholders can meet to determine if the current leadership should be replaced. Lastly, your company won’t be directed to just one main business activity. In reality, your PT company will be allowed to venture into three main areas of business, as you see fit.
However, there is one clear disadvantage of a PT company structure. You need to spend more time and money setting up this kind, especially compared to other business entities there. If you and your business partners are in a hurry, you might get frustrated setting up a PT company.
The other disadvantage with a PT is that you would need two bonafide Indonesians to serve as the “responsible shareholders”. Foreign investors may find that the business you want to go into in Indonesia is closed to foreigners. You may then have to settle for a PT company.
Why Should You Choose a PT PMA Structure?
On the other hand, foreign investors like you can select a PT PMA company structure instead of a pure PT. The PT PMA company is known in English as a “Foreign Investment Company”. This means that you, the foreign investor, can be a 100% owner of the company. This allows you to gain entry in some chosen fields of business.
However, the clear disadvantage with a PT PMA is that you would need to invest at least $1 million upfront. This capital would be used for certain necessary business expenses such as buying land and erecting company offices. After that hefty outlay of capital, you are also required to provide $250,000 for the minimum paid-up capital.
As you can see, choosing a PT PMA and PT Company does require some wise decision-making on your part.
Do your homework to determine if your business should be in the PT PMA and PT Company structures first. But if you’re having trouble with that, you can check with 3E Accounting services composed of incorporation specialists in Indonesia. We can help you with the nitty-gritty of incorporating the company. You can also contact us for other services that you may want to use such as accounting services, auditing services, and taxation services. This may smoothen the way for foreign investors like you to venture into Indonesia.