Company Formation in Indonesia
Last updated: November 2026
Foreign investors in Indonesia must use a PT PMA, a limited liability company (Perseroan Terbatas) with foreign shareholding, unless another law provides otherwise (Law 25/2007 on Investment, Article 5(2)). Since 2 October 2025 its minimum paid-up capital is IDR 2.5 billion, a quarter of the previous IDR 10 billion floor. Two shareholders are the legal minimum. Corporate income tax is 22%.
We handle the company from the first code check to the bank introduction: structure, capital plan, notarial deed, registration, tax ID, NIB and permits. Each case is quoted once the activities and location are clear.
| Quick facts | Value |
|---|---|
| Local company form | PT PMA (Perseroan Terbatas Penanaman Modal Asing), equivalent of an LLC / private limited company |
| Minimum shareholders | 2, individuals or companies |
| Minimum paid-up capital | IDR 2.5 billion, held in the company's bank account for 12 months except for business use |
| Investment plan | Above IDR 10 billion per 5-digit KBLI code per project location, excluding land and buildings; some sectors use grouped codes or count land and buildings |
| Foreign ownership | 100%, except closed fields, MSME-reserved fields and fields with a foreign cap among their conditions |
| Indonesian director | Not required by the Company Law (Law 40/2007) |
| Company registry | Ministry of Law (Kementerian Hukum), Ditjen AHU, through SABH |
| Licensing | OSS-RBA: NIB plus a standard certificate or licence by risk level |
| Corporate income tax | 22% (rate applicable in 2026) |
| VAT | 12% headline, 11% effective on most supplies |
| Investment reporting | LKPM quarterly, by the 15th of the following month |
Why Form a Company in Indonesia
Indonesia rewrote its foreign investment rules in 2021 and again in 2025. Both rounds lowered the entry bar.
Open fields. Since 4 March 2021, any field the Positive Investment List does not name is fully open to foreign ownership. Telecom went to 100% after a 67% cap.
Lower capital. BKPM Regulation 5/2025 cut the capital floor by three quarters. The capital is not a fee: it stays the company's money for assets, construction and operations.
Fewer licences. PP 28/2025 cut supporting licences from 1,006 to 357 and set binding service levels with deemed approval for technical, environmental and building approvals.
Tax incentives. Smaller companies pay half the 22% rate on part of their income, special economic zones (KEK) add incentives, and more than 70 treaties reduce withholding.
Holding structures. A foreign entity can hold PT PMA shares, so the parent can be a company you form in Singapore or Hong Kong.
The trade-offs: two shareholders and an investment plan above IDR 10 billion per code and location. The 0.5% turnover tax closed to new PTs on 22 April 2026, and annual reports have gone through SABH as notarised filings since 1 June 2026. Weighing the region? See our guides to Malaysia and Thailand.
Company Types Available in Indonesia
Article 5(2) of Law 25/2007 requires foreign direct investment to use a PT, unless another law provides otherwise. That settles the choice.
PT PMA (Perseroan Terbatas Penanaman Modal Asing)
One foreign shareholder, whether an individual, a foreign company or a PMA company, makes a PT a PT PMA. Its subsidiaries must also take PMA status (BKPM Regulation 5/2025, Article 227). Law 40/2007, Article 7(1), requires at least two founders. If shareholders fall below two, the company has six months to restore two, or the remaining shareholder becomes personally liable and a court may dissolve the company.
What does PT PMA mean?
PT PMA stands for Perseroan Terbatas Penanaman Modal Asing. Perseroan Terbatas is Indonesian for limited liability company, and Penanaman Modal Asing means foreign investment. A PT PMA is the Indonesian limited liability company, the local equivalent of an LLC, with at least one foreign shareholder. Foreign individuals and foreign companies use it for direct investment in Indonesia.
PT PMA Minimum Capital Requirements and the Investment Plan
Two separate tests apply, and they are often confused.
Paid-up capital. Issued and paid-up capital must be at least IDR 2.5 billion per company, unless a sectoral rule requires more (BKPM Regulation 5/2025). It may not leave the company's bank account for 12 months from placement, except for asset purchases, construction or operations (Article 27).
Investment plan. It must exceed IDR 10 billion per 5-digit KBLI code per project location, excluding land and buildings. It is not paid-up capital, has no realisation deadline and is tracked through LKPM reports. Wholesale trade, food and beverage, construction services and some single-production-line industries use grouped KBLI codes. Land and buildings do count in property, accommodation, agriculture, plantation, livestock and aquaculture.
Compare other countries in our minimum share capital by country table.
One-Person PT (Perseroan Perorangan)
The one-person PT is only for Indonesian citizens aged 17 or over (PP 8/2021, Article 6), so foreigners cannot use it.
Representative Office and Branches
A representative office may do marketing and R&D but earn no revenue, except in construction. Branches are not a general option; banking is the exception. Relocating a foreign company therefore means forming a PT PMA it owns, with a second shareholder.
CV and Firma
These partnerships cannot carry foreign investment, because Article 5(2) of Law 25/2007 requires a PT.
Foreign Ownership Rules in Indonesia
Article 12(1) of Law 25/2007 opened every business field (bidang usaha) except those declared closed or restricted. The Job Creation Law (Law 6/2023) later amended Article 12, and the Positive Investment List below sets the current limits.
The Positive Investment List. Perpres 10/2021 replaced the Negative Investment List (Perpres 44/2016) on 4 March 2021 and was amended by Perpres 49/2021. As issued, it named 245 priority fields with incentives, 163 fields reserved for micro, small and medium enterprises (MSMEs) and 46 fields open with conditions such as foreign caps. Unlisted fields are fully open. The OSS KBLI lookup shows each activity code and its risk level; our foreign ownership and director requirements table compares other countries.
Closed fields. Narcotics cultivation and industry, gambling, catching CITES Appendix I fish species, taking coral from nature, chemical weapons and ozone-depleting chemicals are closed to all investment. Perpres 49/2021 also closed the alcoholic beverage industry.
Large-scale only. A PT PMA may only carry out large-scale business (usaha besar), so MSME-reserved fields are closed to it. Nominee shareholders cannot bypass a cap; see the compliance section.
A new list is coming. Keppres 38/2025 put a replacement Perpres in the 2026 drafting programme. Until it is issued, the 2021 list applies, so we check the list in force on filing day.
How to Register a Company in Indonesia: Step by Step
Three authorities deal with the company's creation, licences and tax ID; the Ministry of Manpower handles foreign staff. The notary and the Ministry of Law (Kementerian Hukum) create the legal entity. Its Ditjen AHU runs the company registry, SABH (Sistem Administrasi Badan Hukum), on AHU Online. OSS-RBA, run by the Ministry of Investment and Downstreaming/BKPM, issues licences, and the Directorate General of Taxes (DJP) issues the tax ID. As your formation agent in Indonesia, we prepare every filing below.
- Check the business codes. Each activity needs a KBLI 2025 code; we check its risk level and Positive Investment List status before anything is signed.
- Sign the deed. The deed of establishment (akta pendirian) is signed in Indonesian before an Indonesian notary, who files it through SABH with the beneficial ownership documents (Permenkum 49/2025, Article 6).
- Registration. The Minister of Law issues the electronic registration certificate, and the PT becomes a legal entity once registered.
- Tax ID. The company registers online with the DJP for its NPWP, using the deed and passport copies of foreign board members.
- OSS-RBA. The company obtains its NIB, enters the investment plan and files the capital lock-up declaration. KKPR, environmental and building approvals follow where needed, then a standard certificate or licence by risk level.
- Bank and capital. The company opens its Indonesian bank account and deposits at least IDR 2.5 billion of paid-up capital.
- Foreign staff. Employers of foreign workers need RPTKA approval through TKA-Online; we confirm the immigration steps for each foreign employee case by case.
- VAT. Above IDR 4.8 billion of taxable deliveries a year, the company registers as a VAT entrepreneur (PKP). The DJP decides within 1 business day of a complete application.
Required Documents
The file is short:
- passport copies of each foreign shareholder and board member
- for a corporate shareholder, its corporate documents, as specified for the deed
- the beneficial ownership set (Permenkum 49/2025, Article 6): a directors' statement naming the beneficial owner, the owner's consent letter and a power of attorney to the notary
- the KBLI codes, the investment plan per code and location, and the capital structure
- details of a business location that can pass spatial conformity (KKPR)
Indonesia has applied the Apostille Convention since 4 June 2022. Foreign public documents from Convention states need an apostille, not consular legalisation. The HCCH status table lists the Convention states.
Timeline and What Our Package Covers
No official end-to-end timeline is published. The calendar depends on the KBLI risk level, the approvals the site needs, apostilles and bank onboarding. Low-risk activities need only the NIB. After the KBLI check we give you a dated plan; our company formation time by country table compares other jurisdictions.
Our package covers:
- KBLI code selection and the Positive Investment List check
- the shareholder structure, capital and investment plan
- the notarial deed and SABH registration, with the beneficial ownership documents
- NPWP registration
- OSS-RBA: NIB, investment plan, lock-up declaration and risk-based permits
- a bank introduction for the capital deposit
- your first LKPM, tax and annual report calendar
What determines the total. We quote after the KBLI check. The total depends on the number of KBLI codes and locations, the risk level, site approvals, apostilles and foreign staff, whose RPTKA approvals carry a compensation fund contribution. The paid-up capital is not part of it: that money stays in the company's account.
Tax Overview for Indonesian Companies
Corporate income tax is 22% (rate applicable in 2026). Losses carry forward five years, with no carry-back, and dividends between resident companies are exempt.
| Tax | Rate or rule |
|---|---|
| Corporate income tax | 22%; 19% for listed companies with at least 40% public float |
| Small company facility | Half the rate on taxable income from the first IDR 4.8 billion of turnover, for turnover up to IDR 50 billion |
| VAT | 12% headline; 11% effective on non-luxury goods and services; exports 0% |
| VAT registration (PKP) | Taxable deliveries above IDR 4.8 billion a year |
| Withholding tax, non-residents | 20% on dividends, interest, royalties and service fees, unless a treaty reduces it |
| Withholding tax, residents | 15% on interest and royalties; 2% on most services |
| Pillar Two | 15% minimum for groups with revenue of EUR 750 million or more |
No 0.5% final tax for new PT PMAs. Since 22 April 2026, PP 20/2026 limits it to individuals, perseroan perorangan and cooperatives; existing PTs keep it only until their PP 55/2022 period ends.
Treaties and incentives. Indonesia has more than 70 tax treaties, listed on the DJP tax treaty page, and relief faces beneficial ownership and principal purpose tests. Tax holiday proposals were due by 31 December 2025, so check any extension; the tax allowance and super deductions are also available. KEK businesses may obtain a tax holiday or allowance, and IKN (Nusantara) offers corporate tax reductions.
Filing. Coretax has handled returns since 2025. Withholding tax is paid by the 15th and reported by the 20th, and VAT returns are due by the end of the following month. Compare rates in our corporate tax rates by country table.
Business Licence in Indonesia: OSS-RBA, NIB and KBLI
Licensing runs through OSS-RBA. The NIB (Nomor Induk Berusaha), the business identification number, is the base layer, and each KBLI code's risk level decides what sits on top.
| Risk level | What the company needs |
|---|---|
| Low | NIB only |
| Medium-low and medium-high | NIB plus a standard certificate (sertifikat standar) |
| High | NIB plus a licence (izin) |
PP 28/2025 replaced PP 5/2021 on 5 June 2025, and OSS has applied it since 5 October 2025. Licences issued earlier stay valid (Article 549). A project may also need spatial conformity (KKPR), environmental approval, building approval and a certificate of worthiness before operating.
Zones. Special economic zones (KEK), free trade zones (KPBPB) and national strategic projects get fast-track licensing, with some document checks moved to a post-licensing audit. KEK administrators and free trade zone heads can issue licences directly.
Setting Up a PT PMA in Bali
Bali follows national law. Check four national rules first:
- Accommodation and property: land and buildings count toward the investment value, unlike in most sectors.
- Food and beverage: the IDR 10 billion test uses grouped KBLI codes, and a location means a whole regency or city.
- Construction services: grouped KBLI codes apply too.
- Every site: the location must pass spatial conformity (KKPR), plus environmental and building approvals where needed.
Villa management, property management, travel, landscaping and construction businesses all start from the KBLI check, which shows each activity's risk level and permits. We run it before you commit to a lease or staff.
Visas and Work Permits
Any PT PMA employing foreigners needs an approved foreign worker utilisation plan (Pengesahan RPTKA), filed through TKA-Online at the Ministry of Manpower under PP 34/2021 and Permenaker 8/2021. Directors and commissioners have their own tracks. Renewals are filed 30 days before expiry, and a compensation fund contribution is payable. We confirm the immigration steps for each foreign employee with the RPTKA filing.
Article 10(1) of Law 25/2007 gives Indonesian workers priority. Foreigners working in Indonesia for six months or more must join BPJS social security; the pension scheme is optional for expatriates. Founders who relocate become tax resident after 183 days within 12 months. Personal income tax runs at 5% to 35%, and qualifying foreign residents are taxed only on Indonesian income for four years.
Banking for Indonesian Companies
The paid-up capital must sit in the company's own Indonesian bank account. It stays there for at least 12 months from placement, except for asset purchases, construction or operations (BKPM Regulation 5/2025, Article 27), so a parent's foreign account cannot replace it. Transactions in Indonesia must be in rupiah, with exemptions, and outbound transfers of USD 100,000 or more are reported to Bank Indonesia through the bank.
Banks run their own onboarding checks. We prepare the corporate file and arrange the introduction through our bank account opening service.
Compliance and Reporting Obligations
A PT PMA reports to three systems: OSS-RBA, SABH and Coretax.
| Obligation | Where | Timing |
|---|---|---|
| LKPM investment report | OSS-RBA | Quarterly, by the 15th of the following month |
| Annual report to the general meeting of shareholders (GMS) | Company | Within 6 months of year end (Law 40/2007, Article 66(1)) |
| Notarised GMS approval of the annual report | SABH | Within 30 days; mandatory since 1 June 2026 |
| Beneficial ownership data | AHU | At establishment, then updated every year |
| Annual corporate income tax return | DJP, Coretax | Within 4 months of year end, extendable by 2 months |
LKPM rests on Article 15(c) of Law 25/2007; as a large business, a PT PMA reports quarterly. The SABH annual report includes the financial statements and board remuneration (Permenkum 49/2025, Article 16). Sanctions apply from November 2026, as announced by Ditjen AHU: a written warning, then a block on SABH access after 30 days. Amendments approved by the GMS are notarised within 30 days and filed within 30 days of the deed. The audit duty depends on the company's size and activity; we confirm it each year.
Beneficial ownership rests on Presidential Regulation 13/2018, and Permenkum 2/2025 tightened verification, with sanctions up to blacklisting and blocked AHU Online access. For ongoing support, see our accounting and tax compliance service.
Nominee Arrangements Are Prohibited
Indonesian law prohibits nominee shareholding. Article 33(1) of Law 25/2007 bars domestic and foreign investors in a PT from making agreements or statements that their shares are held for another person. Article 33(2) declares such agreements and statements void by law. Some guides cite Article 10(1) instead, but that provision concerns priority for Indonesian workers. We do not offer nominee shareholders or nominee directors for Indonesian companies.
Forming an Indonesian Company as a Non-Resident
A non-resident can own a PT PMA in any field open to foreign investment, and both shareholders can be foreign individuals or companies. No Indonesian director is required, but a foreign director working in Indonesia needs work authorisation through the RPTKA process.
A non-resident shareholder provides a passport copy, and the beneficial owner signs a consent letter for the SABH filing. Foreign public documents from Convention states need an apostille. The deed is drawn up in Indonesian by an Indonesian notary. We confirm with the notary and the bank whether a non-resident founder must attend in person before anything is booked.
The company account must be in Indonesia, and the IDR 2.5 billion of paid-up capital stays there for 12 months unless spent on the business. Non-resident owners should plan that cash before signing.
Frequently Asked Questions
What is a PT PMA?
A PT PMA is an Indonesian limited liability company (Perseroan Terbatas) with at least one foreign shareholder. Article 5(2) of Law 25/2007 makes it the form for foreign direct investment, unless another law provides otherwise. It needs two or more shareholders, at least IDR 2.5 billion of paid-up capital and an NIB from OSS-RBA.
Can a foreigner open a company in Indonesia?
Yes, through a PT PMA. It can be 100% foreign-owned in every field except closed fields, fields reserved for MSMEs and fields whose conditions include a foreign cap. Because a PT needs at least two shareholders, a single founder adds a second one, such as a holding company.
What is the minimum capital for a PT PMA in 2026?
The minimum issued and paid-up capital is IDR 2.5 billion per company, unless a sectoral rule requires more. BKPM Regulation 5/2025 has set this floor since 2 October 2025, replacing the IDR 10 billion rule. The money stays in the company's Indonesian bank account for 12 months, except for business use.
Can a PT PMA have only one shareholder?
No. Article 7(1) of Law 40/2007 requires at least two founders, and the one-person PT (perseroan perorangan) is only for Indonesian citizens. A PT PMA that drops to one shareholder has six months to restore a second. After that, the remaining shareholder is personally liable and a court may dissolve the company.
How do I start a trading company in Indonesia?
Form a PT PMA with wholesale trade KBLI codes and obtain its NIB and permits on OSS-RBA. For wholesale trade, the IDR 10 billion investment plan test runs on grouped KBLI codes, not code by code. Shipping and other sector activities follow the same route once their codes are checked for caps, conditions and sector licences.
Does a new PT PMA qualify for the 0.5% final tax?
No. Since PP 20/2026 took effect on 22 April 2026, the 0.5% final turnover tax covers only individuals, one-person perseroan perorangan and cooperatives with turnover up to IDR 4.8 billion. Existing ordinary PTs keep it only until their PP 55/2022 period ends. A new PT PMA pays the regular 22% rate, with the small company facility where it qualifies.
Get Started: Form Your Indonesian Company
Send us your planned activities and shareholders through our contact page. We start with the KBLI check and the capital plan. Then we quote your case.
Call +48 2222 5 2222 or email info@companyformation24.com to start.
Content prepared by Piotr Walter, In-house Counsel. Approved by Tomasz Bielski, Managing Director.
