Let us start with an honest observation.

Indonesia looks complicated on paper. The regulations are in Bahasa Indonesia. The government portals have multiple acronyms. The capital requirements sound large. And the process involves notaries, ministries, and immigration offices all at once.

But here is what experienced foreign investors know. Company incorporation in Indonesia, done properly, takes 4 to 8 weeks. The process follows a clear sequence. And the result, a legally registered PT PMA, gives you full equity ownership in one of the world’s most dynamic growth markets.

This article explains exactly how foreign investment in Indonesia works, what the Indonesia investment law requires, and how to register a company in Indonesia from start to finish. Each section is written plainly, so even if this is your first time looking at Indonesian business regulations, you will follow it without difficulty.

Let us begin with the most important question of all.

What Is a PT PMA and Why Do Foreign Investors Use It?

PT PMA stands for Perseroan Terbatas Penanaman Modal Asing. In plain English, it means a Foreign Capital Investment Limited Liability Company.

Think of it this way. A PT PMA is the Indonesian government’s officially designated vehicle for foreign investment in Indonesia. It is the legal entity that gives a foreign investor, an individual or a company, the right to own shares in an Indonesian business.

Without a PT PMA, a foreigner cannot legally own equity in an Indonesian operating company. They can work here on an employment basis. They can set up a representative office with no revenue. But to build a real business with real ownership, the PT PMA is the foundation.

And the benefits go beyond just ownership rights.

Importantly, a PT PMA is also distinct from a branch office or a representative office. A branch office has limited operating scope and applies mainly to regulated sectors like banking or construction. A representative office cannot earn revenue. The PT PMA is the structure for anyone who wants to genuinely do business and grow in Indonesia.

What Does Indonesia Investment Law Say About Foreign Ownership?

This is the part that surprises many first-time investors. Indonesia does not allow 100% foreign ownership in every business sector. Indonesia investment law specifies which sectors are fully open, which are partly restricted, and which are entirely closed to foreign equity.

The document that governs this is Government Regulation No. 10 of 2021, commonly called the Positive Investment List. It replaced the old Negative Investment List and fundamentally expanded the sectors open to foreign investors.

How the Positive Investment List Works

Under the current Positive Investment List, business activities fall into four categories.

• Fully open to 100% foreign ownership, meaning a foreign investor can own every single share in the PT PMA. This covers most manufacturing, most technology, most services, logistics, tourism, and many other sectors.
• Open with conditions, meaning foreign ownership is permitted up to a specific percentage, such as 49% or 67%. The remaining shares must be held by Indonesian nationals or Indonesian legal entities.
• Reserved for small and medium enterprises, meaning foreign investors cannot enter that sector at all. These tend to be micro-scale local businesses.
• Closed to all investment, meaning neither foreign nor domestic investors can enter those activities. These are very few and typically involve national security or public morality considerations.

Before registering a company in Indonesia, always check your intended business activity against the Positive Investment List. Use the KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) code search tool on the OSS portal at https://oss.go.id. Enter your activity description to find the 5-digit KBLI code, then confirm the foreign ownership limit that applies.

Capital Requirements for a PT PMA: What You Actually Need

Capital requirements cause more confusion among new foreign investors than almost any other topic. So let us break this down simply and clearly.

There are two separate capital concepts for a PT PMA. They are not the same thing, and confusing them leads to costly mistakes.

Think of it this way. The paid-up capital is the money you put into the company today. The investment plan is the total financial commitment you are declaring to the Indonesian government for the life of the project.

Both figures are formal commitments. The paid-up capital must genuinely arrive in the corporate account and appear on the company’s balance sheet. The investment plan drives your LKPM reporting obligations and your standing with BKPM.

What About Authorised Capital?

There is actually a third capital figure: authorised capital. This is the maximum total share capital the company can ever issue, and it must be at least four times the paid-up capital. So for a company with IDR 2.5 billion paid-up, the minimum authorised capital is IDR 10 billion.

The notary records all three capital figures in the Akta Pendirian, the Notarial Deed of Establishment. Make sure you understand each one before the signing appointment. Asking for an explanation from your notary or advisor is completely normal and encouraged.

The Structure of a PT PMA: Directors, Commissioners, and Shareholders

A PT PMA has a specific governance structure. Understanding it before incorporation prevents structural problems that are expensive to fix later.

Shareholders

A PT PMA requires a minimum of 2 shareholders. Both can be foreign individuals, both can be foreign companies, or it can be a combination. A single foreign investor who wants 100% ownership typically uses their Singapore holding company as one shareholder and a second corporate entity as the second shareholder.

Each shareholder’s identity, nationality, shareholding percentage, and capital contribution are recorded in the Notarial Deed and registered with Kemenkumham.

Directors

A PT PMA requires at least 2 directors. At least 1 director must physically reside in Indonesia on a valid KITAS work permit. The other director can reside abroad.

Directors manage the day-to-day operations of the company. They sign contracts, bank documents, and government applications. Their names and signing authority appear in the deed. Directors in Indonesia must also register a personal Indonesian tax ID number (NPWP).

Board of Commissioners

A PT PMA also requires at least 1 commissioner. The commissioner’s role is oversight, not management. Commissioners monitor the directors and report to the shareholders. Foreign nationals can hold commissioner roles without requiring an Indonesian work permit, since the role is supervisory rather than operational.

Read also: PT PMA Indonesia vs Local PT: Which Business Structure Is Better for Foreign Investors?

How to Register a Company in Indonesia: The Step-by-Step Process

Now let us walk through the actual company registration process in Indonesia. Each step is described plainly. If you need to show this to someone who has never dealt with Indonesian company law before, they should be able to follow it.

Step 1: Confirm Your KBLI Code and Ownership Limit

Go to the OSS portal at https://oss.go.id. Use the KBLI search function to find the 5-digit code for your business activity. Check the foreign ownership percentage allowed for that code. Write down the exact code and maximum foreign ownership figure. This number governs everything that follows.

Step 2: Reserve the Company Name

Reserve your company name through the Ministry of Law and Human Rights via the AHU Online portal at https://ahu.go.id. Your name must have at least 3 words, use Indonesian language, and not duplicate any existing registered company. Prepare 3 alternatives, because popular names are often already taken. Once approved, you have 60 days to execute the Notarial Deed before the reservation expires.

Step 3: Execute the Notarial Deed of Establishment (Akta Pendirian)

Engage a licensed Indonesian notary (Notaris) to draft and execute the Akta Pendirian. This is the legal birth certificate of your PT PMA. Foreign shareholders who cannot attend in Indonesia sign a notarial Power of Attorney instead.

The deed records the company name, business address, KBLI codes, capital structure, shareholder identities and percentages, director and commissioner names, and the Articles of Association. Review every figure carefully before signing. Changes after execution are costly.

After signing, the notary submits the deed to Kemenkumham via the SABH system. The Ministry issues the SK Kemenkumham decree, which formally recognises the company as a legal entity. This typically takes 3 to 7 business days.

Step 4: Register on OSS and Obtain the NIB

With the SK Kemenkumham in hand, log in to the OSS portal at https://oss.go.id. Create an account using the resident director’s personal NPWP. Select Non-Individual Business Entity, then PT, then enter the SK number to link the legal entity. Fill in all company details including KBLI codes and total investment plan. Submit for the NIB, the Nomor Induk Berusaha or Business Identification Number.

The NIB is the company’s primary business identity document. For low-risk KBLI activities, the NIB is also the valid Indonesia business license. For medium to high-risk activities, you will need an additional sector-specific license.

Step 5: Register for Corporate Tax (NPWP)

Register for the corporate NPWP through the DJP’s e-registration portal at https://ereg.pajak.go.id, or visit the local Tax Service Office (KPP) in person. You will need the Akta Pendirian, SK Kemenkumham, NIB, and the director’s personal NPWP. The KPP issues the certificate within 1 to 3 business days.

Once you have the corporate NPWP, also apply for PKP status (Pengusaha Kena Pajak) if the company will exceed IDR 4.8 billion in annual revenue, or register voluntarily from the start to reclaim input VAT on setup expenses.

Step 6: Open the Corporate Bank Account

Bring all company documents to a major Indonesian bank. BCA, Bank Mandiri, BNI, BRI, and DBS Indonesia all handle PT PMA accounts regularly. The bank will request the Akta Pendirian, SK Kemenkumham, NIB, NPWP, domicile letter, and passport copies of all authorised signatories. Account opening typically takes 5 to 14 business days.

Step 7: Inject the Paid-Up Capital

Transfer the minimum IDR 2.5 billion paid-up capital into the newly opened corporate account. Transfer from the shareholders’ personal or corporate accounts in any currency. The bank converts to IDR on the transaction date. After the transfer clears, request a Bank Confirmation Letter (Surat Keterangan Setor Modal). This letter proves the capital injection and serves as a key document for BKPM compliance.

Step 8: Obtain Work Permits for Foreign Directors

Apply for the RPTKA (Foreign Worker Utilisation Plan) and IMTA (Foreign Worker Employment Permit) through the Ministry of Manpower via https://tka-online.kemnaker.go.id. Then apply for the KITAS (Limited Stay Permit) through the Directorate General of Immigration at https://izin.imigrasi.go.id. The sequence is: RPTKA approval first, then IMTA, then KITAS. Do not reverse this order.

Documents Every Foreign Investor Needs to Prepare

Document preparation is where many incorporation processes stall. Gather everything below before engaging the notary, and the rest of the process moves significantly faster.

For Foreign Individual Shareholders and Directors

• Valid passport, all pages, colour copy
• Proof of overseas residential address (bank statement or utility bill, issued within 3 months)
• Personal tax identification number from the home country, if available
• Personal Indonesian NPWP (required for directors; can be obtained in Indonesia after arrival)

For Foreign Corporate Shareholders (e.g., Singapore Parent Company)

• Certificate of Incorporation from the parent company’s home jurisdiction
• Memorandum and Articles of Association, certified copy
• Latest audited financial statements, certified by the company’s auditor
• Board resolution authorising the investment in Indonesia and naming the authorised representative
• Certificate of Incumbency or Register of Directors from the corporate registry

For the Indonesian Company Itself

• Approved company name reservation from AHU Online
• Registered business address in Indonesia with a valid domicile letter (Surat Keterangan Domisili Perusahaan)
• Confirmed KBLI code and Positive Investment List verification printout

Timeline and Costs: What to Budget and Expect

Let us look at the realistic timeline and cost picture for company incorporation in Indonesia. These figures are estimates. They vary based on business activity complexity, the speed of document preparation, and the responsiveness of government offices.

Estimated Professional and Government Fees

• Notary fees: IDR 5 million to IDR 15 million, depending on the notary and the complexity of the deed
• Professional incorporation agent fees: IDR 10 million to IDR 25 million for end-to-end company registration services
• Government portal fees: Minimal; most OSS and Kemenkumham processes carry small administrative charges
• IMTA and KITAS fees: Approximately USD 1,200 to USD 2,000 per foreign worker per year, depending on the permit class
• Sworn translation fees: IDR 250,000 to IDR 500,000 per page of certified corporate documents

These costs are separate from the IDR 2.5 billion paid-up capital, which is working capital for the company itself. Factor all of these into the budget before starting the incorporation process.

Read also: [2026 Guide] How to Start a Business in Singapore as a Foreigner

The Indonesia-Singapore DTA Advantage for Singaporean Investors

Singaporean investors have a distinct advantage when incorporating a foreign company in Indonesia. This advantage comes from the Double Tax Agreement (DTA) between Indonesia and Singapore, and it affects the real financial returns from an Indonesian investment.

Here is how it works in practice.

To actually use these DTA rates, the Singapore parent company needs a Certificate of Domicile (Form DGT) issued by the Inland Revenue Authority of Singapore (IRAS). Without the DGT form on file before the first inter-company payment, the Indonesian PT PMA automatically deducts at the full 20% withholding rate.

Additionally, Singapore’s territorial tax system often exempts qualifying foreign dividends from Singapore income tax under Section 13(8) of the Singapore Income Tax Act. Together, these two features make the Singapore holding company structure the most tax-efficient route for Singaporean entrepreneurs entering the Indonesian market.

Review the full Indonesia-Singapore DTA text at https://www.pajak.go.id/en/tax-treaty before finalising your holding structure.

Tax Incentives Available to Your PT PMA

Company incorporation in Indonesia unlocks access to a range of investment incentives. Many foreign investors miss these simply because they do not know to ask.

Tax Holiday

The Indonesian government offers complete corporate income tax exemptions for companies investing in pioneer industries. Qualifying sectors include advanced manufacturing, renewable energy, digital infrastructure, and pharmaceutical production. Tax holidays run from 5 to 20 years depending on investment size.

Apply for a tax holiday through the OSS portal at https://oss.go.id. The Ministry of Finance reviews and approves each application.

Tax Allowance

For companies outside pioneer sectors, Indonesia offers a tax allowance package. This includes accelerated depreciation on fixed assets, reduced withholding tax on dividends to non-resident shareholders at 10%, extended loss carry-forward periods of up to 10 years, and a 30% investment allowance deducted over 6 years against taxable income.

Special Economic Zones

PT PMAs operating inside Indonesia’s Special Economic Zones (KEK, Kawasan Ekonomi Khusus) access reduced corporate income tax rates, VAT exemptions on capital equipment imports, and customs duty exemptions on production inputs. Indonesia currently operates over 20 approved KEK zones across the archipelago.

Super Deduction for Research and Training

Under Government Regulation No. 45/2019, companies that invest in qualifying research and development activities or contribute to vocational training programmes deduct up to 300% of qualifying expenses from their taxable income. Technology and manufacturing investors benefit most from this facility.

Ongoing Compliance After Company Incorporation in Indonesia

Registering the company is the starting line, not the finish line. After incorporation, a PT PMA carries a set of recurring obligations. Missing them creates penalties, audit exposure, and in the most serious cases, NIB suspension.

Here are the main ongoing obligations to track.

Set up a compliance calendar during the first month of operations. It does not need to be sophisticated. A simple spreadsheet with each obligation, its deadline, and the responsible person is enough to prevent the common pattern of missed filings in the first year.

The Most Common Mistakes in PT PMA Incorporation

After working with dozens of foreign investors on company incorporation in Indonesia, the same errors appear repeatedly. Understanding these upfront saves weeks of delay and significant rework costs.

Company Incorporation in Indonesia Is Achievable

There is a common myth that setting up a foreign company in Indonesia is slow, complex, and unpredictable. That myth mostly describes what happens when investors attempt the process without proper preparation and qualified support.

The reality is different. Foreign investment in Indonesia follows a clear legal framework under Indonesia investment law. The OSS portal has genuinely simplified the process. The Positive Investment List opened far more sectors than the old regime allowed. And for Singaporean investors specifically, the DTA creates a financial efficiency that few other markets offer.

Company incorporation in Indonesia, done correctly, takes between 4 and 8 weeks. The PT PMA that comes out the other end gives you full equity ownership, commercial operating rights, and a legal entity built to scale as the business grows.

The key is preparation. Know your KBLI code. Understand your capital obligations. Build the right corporate structure. And work with advisors who have done this many times before and understand both sides of the Singapore-Indonesia equation.

Already Planning Your Move into Indonesia?

We know the first step into a new market can feel daunting. There are new laws, new portals, new acronyms, and new compliance requirements, and you still need to actually run a business at the same time.

That is exactly what Bizsquare is here for.

Our team at Bizsquare Accounting has helped Singaporean entrepreneurs and foreign investors successfully complete company incorporation in Indonesia and build compliant, profitable PT PMA businesses from scratch. We handle every step of the process, so you can focus on building the business itself.

We speak both languages, literally and regulatory. We understand Singapore corporate structure and Indonesian government requirements. And we have helped clients in manufacturing, technology, trading, services, hospitality, and more navigate this exact journey.

Here Is What We Take Off Your Plate:

• Company Incorporation in Indonesia
• Apply for Indonesia KITAS | KITAS Application for Foreigners
• Accounting, Tax & Corporate Secretary Services in Indonesia

You have spent time building a business worth expanding. Let us make sure the Indonesian chapter starts right.

Talk to our Indonesia incorporation team today. We offer a complimentary first consultation to review your business plan, confirm your KBLI code, and map out your exact incorporation roadmap. No jargon. No pressure. Just clear, practical guidance from a team that has done this many times before.