The Differences Between PT PMA and PT Local Incorporation in Indonesia
- PT PMA has minimum requirement for authorise capital and paid up capital;
- The percentage of shareholders structure of PT PMA depends on the DNI;
- PT PMA is regulated and monitored by the BKPM;
- PT PMA is required to submit quarterly investment report to the BKPM.
Advantages of a PT PMA Company Formation
A PT PMA lets you own 100% of the company as a foreigner. Depending on your business industry, the ownership can be anywhere from 0% to 100%. You will need a minimum of 2 shareholders to establish this entity.
The Online Single Submission System (OSS) is overseen by the Coordinating Ministry For Economic Affairs (Kemenko). This is per the Government Regulation Number 24 Year 2018 regarding Licensing. All your licensing requirements must be conducted via the OSS.
Licenses are processed faster than before through this system. If you’re involved in certain industries like hotels and restaurants, you will need a special license to operate.
Foreign investors choose PT PMA as their preferred choice for Indonesia company incorporation for several reasons:
- You can start doing business legally almost immediately.
- You will have the same responsibilities and rights as other companies locally.
- You can take part in all Indonesian tenders as long as you fulfil the tender requirement.
- You can apply for product registration and business licenses.
- You can hire foreign employees by applying for the KITAS work visa under your company name.
- Your foreign visitors and clients can get a business visa sponsored under your company.
You will need to complete your Indonesia company set up before you can open a bank account. To open one, you need to submit a notary statement letter indicating the amount to be transferred incorporate company.
PT PMA Indonesia Company Setup
The process of formation of company in Indonesia for a PT PMA involves several steps. The total time to be taken to finalise the set up will be 4 to 6 weeks.
The procedure involved is as follows:
- Getting your company name approved at the Ministry of Law and Human Rights (1 working day).
- Notary prepares your Articles of Association (3 working days).
- Signing process with the Notary, includes deed of establishment, statement letter (1 working day).
- Approval of your Deed of Establishment by the Ministry of Law and Human Rights (3 working days).
- Getting your Taxpayer Registration Number (2 working days).
- Certificate of Domicile obtained from your local district office except Jakarta (10 working days).
The final stage involves approval obtained for your Business Registration Number (NIB), Business Permit, Commercial/Operational Permit, Location Permit, Environmental Permit and BPJS. This is done through the Online Single Submission (OSS) System. This takes 2 working days.
Applying for Your Business Registration Number
As part of the Indonesia company incorporation process, you need a Deed of Establishment. This must be approved by the Indonesian Ministry of Law and Human Rights (“MOLHR”). You must provide the identity documents of all shareholders, commissioners and directors involved. If your shareholder is a company, you must provide a Deed of Establishment.
PT PMA companies must register with a minimum authorised and paid-up capital of nothing less than IDR10,000,000,000. To prove to the relevant authorities that you have paid, you will need to:
- Make a deposit in the company’s bank account; or
- Provide a Capital Statement Letter that states shareholders have sufficiently provided the required funds signed by all shareholders, director and commissioner.
The Articles of Association
All shareholders must sign this document. The signing must be in the presence of a notary public. If any shareholder can’t sign in the presence of a notary, the shareholder can appoint a power of attorney. The power of attorney will act on their behalf.
The notary public will then hand over the documents to MOLHR. Once approved, you will be issued with a Deed of Establishment. If you amend anything in your Articles of Association after the MOLHR approval, you must prepare a Deed of Amendment. You will need to engage the notary public’s services again to prepare the deed.
Choosing Your Business Name
Registration of company in Indonesia has certain formalities to abide by. Like your business name for example. In Indonesia, a business name must be in Roman letters and must not be like an existing name being used by another company.
Your business name must not be contrary to public morality and order. It cannot be like any government, international or state bodies either. That is, unless it has permission to do so.
The business name can’t have a series of letters or numbers that don’t form a proper word. Every business name must have at least 3 words. For PT PMA’s, business names can be in English. You may refer to Guide to Select your Indonesia Company Name for more information.
What Happens After the Indonesia Company Incorporation?
You’re almost ready at this point to start your business. Upon completion of your Indonesia company set up, you can commence the following activities:
- Open your bank account
- Hire your employees
- Buy property and assets
- Participate in tenders
- Get permits for foreign employees
- Get business licenses where needed
- Report quarterly to BKPM about your PT PMA investments
3E Accounting’s Indonesia Company Incorporation Services
3E Accounting’s experience is like no other. We hire the best so we can provide you with the best possible service at a great Indonesia company incorporation cost. Ready to incorporate your Indonesia company? Contact our friendly consultants today and let us help you with your Indonesia company formation as we are one of the best incorporation companies.