PT PMA 2026: Indonesia's Updated Rules for Foreign Company Setup

TL;DR

Foreign founders planning a business in Indonesia need to separate company formation, investment requirements and permission to operate.

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The Facts

Foreign founders planning a business in Indonesia need to separate company formation, investment requirements and permission to operate. A registered PT PMA is not, by itself, confirmation that every planned activity is authorised.

This guide concerns foreign-invested operating businesses. It is not a claim that every foreign resident needs a company or that every Indonesian activity is open to foreign ownership.

Start with the activity and ownership rules

The framework for business fields is Presidential Regulation 10/2021, as amended by Presidential Regulation 49/2021. It distinguishes business fields with different investment conditions. Founders should check the precise activity, applicable KBLI classification, ownership conditions and any sector-specific requirements before fixing the shareholding structure.

Risk-based licensing and investment eligibility answer different questions. A KBLI selection must accurately describe the intended activity; obtaining an OSS registration does not remove a sector's ownership restrictions or other legal requirements. Use the classification and transition guidance actually applicable in OSS when filing, rather than copying an old company's codes.

Investment value and paid-up capital are different

Minister of Investment and Downstream Industry/Head of BKPM Regulation 5/2025, Article 26 sets the general PMA investment requirement at more than IDR 10 billion, excluding land and buildings, per five-digit KBLI business field per project location.

That is the general rule, not a universal calculation for every project. Article 26 contains exceptions and specific calculations, including for wholesale, food and beverage services, construction and certain production activities. It also addresses accommodation, property and other sectors where land and buildings may be included, with further distinctions for property development and operation. A villa or accommodation project therefore needs its own calculation.

The same article separately sets minimum placed/paid-up capital for a PMA limited liability company at IDR 2.5 billion per company, unless legislation provides otherwise. This is a different requirement from the investment value. Do not describe the IDR 10 billion project threshold as a universal minimum cash deposit into the company's bank account.

Article 27 contains a minimum 12-month restriction on transferring placed/paid-up capital out of the company's account, with exceptions for asset purchases, building construction and company operations. It should not be described as an absolute ban on using the money for the business. Document the purpose and legal basis of expenditures.

Registration and operating readiness

The current licensing framework includes Government Regulation 28/2025 and BKPM Regulation 5/2025. The required permissions depend on the activity and risk classification. Check the NIB together with applicable standard certificates or licences, basic requirements and sector-specific approvals.

For a Bali premises-based business, this means examining the actual location, spatial-use position, environmental requirements and building documentation where applicable. A corporate registration is not evidence that a particular building can lawfully host the intended business.

BKPM's January 2026 statement on investment supervision in Bali reported findings involving missing basic licensing requirements, activities closed to PMA and unmet minimum investment requirements. These findings explain why an investor should check operational compliance rather than judge readiness by the existence of a company alone.

In Practice

Before incorporation, prepare a written activity-and-location map: what the company will sell, who its customers will be, where work will take place and which legal entity will sign contracts. Match that plan to the relevant KBLI and foreign-investment conditions.

Prepare a separate investment schedule and capital schedule. Identify the applicable Article 26 calculation, record which assets count towards the project requirement and explain how paid-up capital will be funded and used.

Confirm the proposed directors' eligibility, residence and work-authorisation position under the rules relevant to their roles and sector. There is no basis in the sources cited here for a blanket statement that every PT PMA must appoint an Indonesian director.

Before opening, assign responsibility for licensing, tax, employment and investment reporting. The timetable should reflect outstanding operational approvals, not just the expected NIB issuance date.

Sources

• BKPM Regulation 5/2025, especially Articles 26–27.
• Presidential Regulation 49/2021 amending the business-field framework.
• BKPM: investment supervision and compliance findings in Bali.

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Bali Zero Take

Our Analysis

The useful distinction for a founder is between having a legal entity and having a business that can carry out its intended activities. Ownership eligibility, investment calculations and operational approvals should be assessed together before commercial commitments are made.

Our Advice

Build the structure around the real business. A cheap incorporation package becomes expensive if the activity, location or investment calculation must be corrected after a lease is signed. This is our editorial recommendation; the exact legal requirements depend on the project.

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Next Steps

Primary Source

Exa: masterlegalsolution.com

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