Five Key Points About PT PMA
Setting up a PT PMA in Indonesia is done when there’s a foreign shareholder involved, like a foreign individual, company, or another PT PMA. It’s also possible when a local PT previously owned by Indonesian shareholders gets acquired by foreign shareholders.
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PT PMA is crucial for foreign investors because it’s their only direct way to invest in Indonesia as company shareholders. Unlike other forms of investment, like opening a Representative Office or dealing with local PT for financing, PT PMA offers direct ownership.
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Here are five key things to know about setting up a PT PMA:
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Determine the business activities: Before starting, you need to decide what the PT PMA will do. This depends on Indonesia’s Investment Negative List (DNI), which outlines allowed business activities and foreign ownership limitations.
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Prepare an investment plan: To apply for a Principle License from BKPM, you need an investment plan. This plan should detail the intended investments, with a minimum of IDR 10 billion per business activity.
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Arrange capital structure and shareholders: PT PMA requires a minimum authorized capital of IDR 10 billion, with 25% of that deposited as paid-up capital. You also need to decide how shares will be distributed among shareholders.
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Appoint directors and commissioners: Every PT PMA must have at least one director and one commissioner. They can be either Indonesian or foreign nationals, but foreign directors need to obtain work and stay permits.
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Apply for a Principle License: Once everything is prepared, you can apply for a Principle License at BKPM. This license approves foreign investment in PT PMA. It’s valid for 1-5 years, depending on the planned business activities.
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After securing the Principle License, you can proceed with the establishment process, similar to setting up a local PT. This includes signing the Deed of Establishment, obtaining ministerial approval, and acquiring other necessary licenses. Once the investment plan is realized, you can apply for a Permanent Business License (IUT).
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