Business Setup

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PT PMA COMPANY

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Setting Up a PMA Company

The following are simple steps required to be taken in order to set up a PT PMA in Indonesia:

  • Register a Company Name – The company name needs to have three words.
  • Obtain a Principle License from BKPM (Indonesia’s Investment Coordinating Board) – It is an initial government approval license before investing in Indonesia.
  • Capital Statement Letter (Article of Association).
  • Domicile Letter – Your company must already have an address of where the company is located.
  • Tax Registration (NPWP) – The tax card that you will obtain is essentially important because you will need to use this when renewing important legal documents.
  • Business Registration – It is a statement that your company has been listed and registered (Tanda Daftar Perusahaan).
  • VAT Liable Registration (PKP).
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Advantages of a PMA Company

 

  • Can be owned 100% by foreigners.
  • Establishing a PT PMA has the same equal rights like any other locally owned Indonesian company.
  • You are allowed to participate in all of the tenders in Indonesia.
  • You are able to apply for import and other business licenses that are needed to import goods.
  • You can also apply working permits for your foreign workers.
  • You are able to sponsor business visa(s) for your clients and visitors.

Other ways to set up a PT PMA

 

  • Using Joint Venture with foreign/local partners(s).
  • Purchasing shares of an existing PT (could be a foreign company or locally owned).

           Global Expandia’s consultants will assist you throughout the process,                   which includes:

  • Professional consultation throughout the process.
  • English translation of all incorporation documents.
  • Opening a Bank Account.

 

Business Opportunities

How Much to Invest?

Indonesian Investment Coordinating Board (BKPM) mandates foreign investors to provide an investment plan for a minimum of IDR 10 Billion. However, only 25% of the investment plan has to be as paid up capital.

Global Expandia will handle both the investment plan and notarial deeds.

Pre-Incorporation Decision

There are several important matters to consider before setting up your business in Indonesia:

  • Deciding the share percentage by referring to the latest updated Negative Investment List that shows the share percentage allowed per sector for foreign investors.
  • Choosing the perfect corporate name for your company that consists of at least three words.
  • Selecting a suitable registered office for your Domicile Letter.
  • The Identification of minimum 2 (two) shareholders and/or initial Directors.
  • Deciding the minimum paid up capital and the percentage of each shareholder.

Brief Comprehension of Requirements

 

  • Minimum of one commissioner and one director (1 Director must be ordinarily reside in Indonesia).
  • Minimum of 2 shareholders (companies or individuals), The Negative Investment List states the percentage ownership depending on the regulations.
  • Minimum 25% paid-up capital from the authorized capital.
  • Local registered office within Indonesia is mandatory.

FOREIGN REPRESENTATIVE OFFICE

If you decide a PT PMA is not in your favor, most business sectors are eligible to open a representative office in Indonesia. According to Ministry of Trade Regulation no 10/2006, a representative office cannot engage directly in sales and is not allowed to gain income from Indonesia. The purpose of the Foreign Representative Office is only limited for::

  • Market research
  • Promote of the Company
  • And any distribution purposes

Foreign Rep. Office is also prohibited to do any direct selling and that all transaction has to be done through the parent company abroad.

It serves as a supervisor, liaison, coordinator and to manage the interest of the company or its affiliated companies in Indonesia.

A Foreign Rep. Office has no minimum investment requirement and no shareholder nor director requirement.

A representative office has no minimum investment requirement and no shareholder or director requirement.

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Types of Representative Office

KPPA - Kantor Perwakilan Perusahaan Asing

Foreign Representative Office

 This type of representative office is only for market research purposes only.

KP3A - Kantor Perwakilan Perusahaan Perdagangan Asing

Foreign Representative Office for Trading

This Foreign Representative Office is designated for Foreign Trading Offices that intend to open Rep. Office in Indonesia. It shall not generate revenue from Indonesia.

BUJKA - Badan Usaha Jasa Konstruksi Asing

Foreign Construction Services Representative Office

This type of entity allows 100% Foreign ownership while for participation in projects must be through a joint operation with an Indonesian Company.

To obtain a license for a representative office

The investor must submit an investment application form to Indonesian Investment Coordinating Board (BKPM) or Office of the State Minister for projects in the bonded areas. The following are the documents that have to be submitted:

Letter of Appointment

Letter of appointment from the parent company.

Power of Attorney

Giving authority to Global Expandia to handle the application process.

Articles of Association

Articles of association of the parent company and any amendments.

Copy of Passport / ID

Copy of valid passport (for foreigners) or copy of Identity Card (for Indonesian) who will be the chief of the representative office.

Statement

A statement confirming that the individual will be working solely as the representative office executive.

Other Documents

Depending on the type of Representative Office, more documents and certificates shall be required.

how can we help you?

Contact us for further information about our professional services.

We first contacted Global Expandia following the recommendation from another multinational and we are very happy with the outcome. They have provided us great information and knowledge of the market, the steps to establish a PMA, hiring new employees and beyond that, they have provided us confidence that we are in good hands.

LuisBaselgaTorres_200x200px
Luis Baselga
General Manager International, SIMON HOLDING

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