PT PMA in Bali: what the company has to be before it holds anything

Two IDR 10 billion tests, two shareholders, one open business line. The requirements for a foreign-owned company come from four instruments, and most summaries quote one.

PT PMA, PMA company, foreign company: fourteen questions, each with its article

“Set up a PT PMA” is the answer Bali agents give to almost every foreign-ownership question. It is a real answer to some of them. The table puts each common question next to the rule that decides it, so you can see which ones.

The rows fall into three groups: what the company must be (a PT, a large business, two shareholders), what it must put in (two separate IDR 10 billion tests), and what it may then do (an open business line, a license, HGB). The sections below take them in that order.

What the company must be

An Indonesian PT, because there is no other door

Under Perka BKPM 4/2021 art. 9(9), foreign investment must take the form of an Indonesian limited liability company, domiciled in Indonesia. Perpres 10/2021 article 7(2) says the same thing from the other side. And the individual route is closed by classification rather than prohibition: investment by an individual is classed as the domestic investment category (Perka BKPM 4/2021 art. 9(7)), which has no category for a foreign individual investing in their own name.

A large business, always

A PMA is classed as a large business and must meet the minimum investment value (Perka BKPM 4/2021 art. 12(1)). Perpres 10/2021 article 7(1) puts it as a limit on the investor: foreign investors may operate only in large businesses with an investment value above IDR 10 billion, excluding land and buildings. There is no small PT PMA.

Two shareholders, from founding onwards

Company law requires a PT to be founded by two or more persons, by notarial deed made in Indonesian (Law 40/2007 art. 7(1), as amended by Law 6/2023 art. 109), and every founder must take shares at founding. The elucidation to article 7(1) is the line that matters to a foreign buyer: the founding “persons” may be Indonesian or foreign individuals, or Indonesian or foreign legal entities. Company law itself does not require an Indonesian partner.

The rule keeps applying after founding. If shareholders fall below two, the remaining holder has six months to transfer shares or have the company issue new ones; after that, the shareholder is personally liable for the company’s obligations and losses, and a district court may dissolve the company on application (Law 40/2007 art. 7(5)-(6), as amended by Law 6/2023 art. 109).

Why the one-person PT does not help

Law 6/2023 opened a single-founder PT — for micro and small businesses only (Law 40/2007 art. 7(7)(e) and art. 153A(1), as amended by Law 6/2023 art. 109). A PMA is classed as a large business by Perka BKPM 4/2021 article 12(1), so putting the two articles side by side, the exemption does not reach it. That last step is our reading of the two together; neither article mentions the other.

What it must put in: two IDR 10 billion tests, not one

Almost every summary of the PT PMA route gives one number. The regulation has two, in two different paragraphs of the same article, measuring different things.

The investment value is what the project costs to build and run, tested per business line and per location (Perka BKPM 4/2021 art. 12(2)). Its property carve-out — land and buildings counted in for a whole building or integrated complex — is explained on the HGB page, because it is a question about the land.

The capital is what the shareholders commit to the company: issued/paid-up capital of at least IDR 10 billion (Perka BKPM 4/2021 art. 12(7)), unless other legislation provides otherwise. It is in addition to the investment value, not an alternative to it. Company law on its own no longer fixes a minimum — authorized capital is set by the founders' decision (Law 40/2007 art. 32(2), as amended by Law 6/2023 art. 109) — which is exactly why the investment rule is the one that bites.

A café or restaurant on the property changes the counting unit. For food and beverage services the threshold is counted per 2-digit KBLI group per location (Perka BKPM 4/2021 art. 12(3)(b)), not per 5-digit line.

We give these in rupiah only. This site does not cite an exchange rate, and a dollar figure would be a number without a source.

What it may then do

Operate an open business line

Perpres 10/2021, as amended by Perpres 49/2021, starts from openness: every business line is open to investment unless declared closed or reserved to central government (Perpres 10/2021 art. 2(1), as amended by Perpres 49/2021). The amendment adds that open lines are commercial ones, and closes three alcohol-manufacturing codes by name. Which open lines carry conditions — a foreign-ownership cap, a partnership requirement — is in the lampiran, which we have not read. So we do not tell you that villa accommodation is fully open; ask for the KBLI code and its entry.

Hold a license

Accommodation is a licensed tourism business activity (PP 5/2021 art. 140(f)), one of thirteen activities in the tourism sector. The company registers through the online system and receives a Nomor Induk Berusaha, proof of registration as a business actor (PP 5/2021 art. 1(12)). The KBLI code, risk level and license for each activity are in Lampiran I (PP 5/2021 art. 141(1)), also unread. Renting a villa out, structure by structure.

Hold land — as HGB

An Indonesian legal entity may hold HGB (PP 18/2021 art. 37(1)), which is the right to erect and own buildings on land that is not one's own (UUPA (Law 5/1960) art. 35(1)). The company holds the right; you hold shares in the company. What the company actually holds.

Before you are sold a PT PMA

These follow from the articles above. None of them needs a lawyer to ask, and each has a checkable answer.

1. Who is the second shareholder?

A real person or entity with real shares. A second shareholder who holds for you under a side agreement puts the structure back where the nominee problem lives.

2. Where is the paid-up capital coming from, and when?

Article 12(7) is about capital placed in the company, not a figure in a deed.

3. What is the KBLI code, and what does the lampiran say about it?

The code decides the license, the risk level and any foreign-ownership condition.

4. What does the company actually do?

If the answer is “owns my holiday home”, the comparison is hak pakai, not a company.

5. What does it cost to keep it alive every year?

Accounts, filings, reporting and license upkeep. No regulation publishes that figure; ask for it in writing.

We do not set up companies and do not recommend anyone who does. We are paid a fixed fee per enquiry whether you incorporate or not.

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