How to Incorporate a PT PMA in Indonesia
A foreign investment company, or PT PMA, is the standard way for foreign investors to start a company in Indonesia.
Although business registration and incorporation may seem to be challenging, they are relatively easy to complete if you understand the requirements and have qualified support. Here’s what you’ll need to do to incorporate a PT PMA and start a business in Indonesia.
Step 1: Obtaining the Deed of Incorporation
Proposing a company name
Indonesian regulations state that company names must consist of at least three words. Bear in mind that this legal company name is simply for legal purposes, and you can give your brand or product a different name.
A qualified notary can help you reserve a company name.
Drafting the Deed of Incorporation
Once you’ve picked a company name, the registered notary will draft the Deed of incorporation for your company. It includes the following information:
Company’s name and domicile,
Company’s objective and business activity,
Details about the amount of authorised and paid-up capital,
Amount and value of company shares,
Board of Directors and Commissioners' titles, number of members, appointment and discharge protocols,
Procedures for utilising and distributing profits and dividends from your company.
Methods and places for holding shareholder meetings.
Submitting your Deed of Incorporation
Next, you will need to sign the Deed of Incorporation. The document must be signed by all shareholders in the presence of the notary. If a shareholder cannot attend, they have the option to use a power of attorney provided by the notary.
The Deed of Incorporation will then be submitted to the Indonesian Ministry of Justice and Human Rights for approval. The Ministry will then issue your Deed of Incorporation and the approval letter known as the SKHAM. This means the government has recognized your business as a legal entity.
Step 2: Getting the Company Tax ID (NPWP)
After you get your Deed of Incorporation, you will need to apply for the company tax ID, otherwise known as the NPWP. This can be accomplished in a tax office or through the online tax system.
Please keep in mind that some Indonesian provinces may still demand you to register for a tax ID at the local tax office. Within 24 hours, the government will mail your official tax ID to your company's address.
Step 3: Getting a Business Registration Number
The Indonesian government introduced the Online Single Submission mechanism in 2018, which simplifies the remaining procedures of company registration. By using the system, you can obtain the remaining documents such as the business registration number (NIB) and operational license – all at once.
Moreover, after you begin recruiting employees, you can register your company with the government's Health and Social Security System (BPJS Kesehatan and BPJS Ketenagakerjaan).
Additional licenses
Manufacturing and healthcare industries, for example, will require additional permits before they can run. Because business activities in Indonesia are so diverse, you should speak with an experienced consultant about what you require.
Additionally, if you are an investor who owns more than IDR 1 billion in shares in the PT PMA and holds a director position, you are also eligible to apply for the Investor KITAS. The Investor KITAS will allow you to stay and manage your business in Indonesia for 2 years and it is extendable for up to 5 years. You can obtain it once the company has been established.
How do I start?
The company incorporation process has gotten a lot more accessible. However, it can still be overwhelming for people who are not familiar with the system; not to mention the lack of ground support. It is essential to know the basics of every step. Consulting with an experienced professional to guide you through the registration procedure is still the best option.
Permitindo can save your time and assist you through the whole company registration process in Indonesia. If you have any questions regarding the PT PMA establishment, feel free to directly contact us via contact@permitindo.com or simply fill out the form here.