How to Set Up a Company in Indonesia as a Foreigner: PT PMA Guide 2026

A foreign investor normally sets up an operating company in Indonesia through a foreign investment limited liability company, known as a PT PMA. The decisive work happens before the notarial deed: choose the correct KBLI business classifications, confirm whether foreign ownership is permitted, design the shareholder and management structure, separate paid-up capital from the investment plan and map every licence needed after the company receives its NIB.

A clean PT PMA project is therefore not just “company registration.” It is a coordinated legal, investment, tax, OSS and immigration setup. The company may exist as a legal entity before it is authorised or practically ready to carry out every planned activity. Foreign founders should treat incorporation, business licensing and operational readiness as related but distinct milestones.

This guide explains the current planning sequence under Indonesia’s risk-based licensing framework. It reflects rules checked on 21 September 2026, including Government Regulation No. 28 of 2025 and Ministry of Investment/BKPM Regulation No. 5 of 2025. Sector-specific rules can change the result, so the correct answer depends on the actual business model, location and ownership chain.

Is a PT PMA the right structure for your Indonesia plan?

A PT PMA is generally the right route when foreign persons or foreign entities will hold shares in an Indonesian operating company and the business will earn revenue, employ staff, sign local contracts or hold local licences. It provides a separate Indonesian legal entity and limited liability, subject to compliance with company, investment, tax, labour and sector rules.

It is not the only market-entry route. A representative office may be suitable for limited non-revenue functions where the relevant sector permits it. An employer-of-record arrangement can support early hiring, but it does not give the foreign business its own Indonesian operating licence or local contracting entity. Buying shares in an existing Indonesian company can also be considered, but foreign entry may convert the target into a PT PMA and requires due diligence.

Route	Best suited to	Main limitation
PT PMA	A foreign-owned operating business that will invoice, contract, employ and obtain licences in Indonesia.	Requires investment planning, corporate governance, OSS licensing and continuing compliance.
Representative office	Market research, liaison or other limited functions permitted for that office type.	Usually cannot conduct ordinary revenue-generating trade or operate like a local company.
Employer of record	Testing the market through a small team before committing to an entity.	Does not replace the licences or contracting capacity of the foreign company’s own Indonesian entity.
Acquire an existing company	A strategic transaction where licences, assets, contracts or operations already exist.	Needs legal, tax and operational due diligence; foreign ownership and change-of-control consequences must be cleared.

How to set up a PT PMA in Indonesia: the ten-step sequence

1. Define the revenue model and map every KBLI code

Start with what the Indonesian company will actually sell, to whom, through which channel and from which location. Indonesia uses KBLI classifications to connect business activities to foreign-ownership rules, investment values, risk levels, licences and reporting. A broad description such as “consulting,” “technology” or “trading” is not enough.

For each revenue stream, identify the most accurate KBLI code and test whether the company will act as a principal, distributor, marketplace, agent, contractor or service provider. Adding an adjacent KBLI only to “keep options open” can create an unnecessary investment commitment, licence burden or mismatch with the company’s real operations. Conversely, omitting a material activity can leave invoices and contracts unsupported by the company’s licensed scope.

2. Check foreign ownership before agreeing the cap table

Indonesia’s investment framework is often described as a positive investment list, but the practical analysis is more granular. A business field may be open to foreign investment, reserved for Indonesian cooperatives or micro and small enterprises, subject to a partnership requirement, capped for foreign ownership or governed by a sector-specific regime. The analysis should be made against the chosen KBLI, business scale and activity—not against the marketing label used by the founder.

The starting point is Presidential Regulation No. 10 of 2021 on Investment Business Fields, as amended, together with current sector rules. If an Indonesian partner is legally or commercially required, document the real economics and governance. Nominee arrangements that merely disguise beneficial ownership create serious enforceability, regulatory and compliance risks.

3. Design the shareholder and management structure

An Indonesian limited liability company generally needs at least two shareholders, at least one director and at least one commissioner. Shareholders may be individuals or legal entities, foreign or Indonesian, subject to ownership restrictions. The director manages and represents the company; the commissioner supervises the board of directors. The articles of association can allocate authorities and approval thresholds, but they cannot remove mandatory statutory duties.

Before signing incorporation documents, decide who will fund the business, control reserved matters, appoint management, sign bank instructions and resolve deadlock. If founders or investors need special vetoes, transfer restrictions, funding commitments, drag-along or tag-along rights, align a shareholders’ agreement with the articles of association and Indonesian mandatory law. Also identify the company’s beneficial owner and prepare the supporting ownership chain.

4. Separate paid-up capital, investment value and setup fees

This is the most common source of confusion in PT PMA quotations. Three different numbers may be discussed, and they do not mean the same thing.

Item	What it means	Current planning point
Issued and paid-up capital	Equity subscribed and paid by shareholders into the company.	Under BKPM Regulation No. 5 of 2025, the general minimum for a PT PMA is IDR 2.5 billion, unless a sector rule requires more.
Planned investment value	The project investment recorded and realised for the licensed business.	Generally more than IDR 10 billion per KBLI per project location, excluding land and buildings, subject to regulatory calculation rules and exceptions.
Professional and government-related costs	Notary, legal, translation, apostille/legalisation, address, sector application and other implementation costs.	These are service or transaction costs. They are not substitutes for the company’s paid-up capital or investment commitment.

The operative investment procedures are in Ministry of Investment/BKPM Regulation No. 5 of 2025, effective 2 October 2025. The IDR 10 billion investment threshold should not be applied mechanically across every model. Multiple KBLIs, project locations, property, special sectors or infrastructure can change the calculation. Prepare a funding plan that matches the deed, bank evidence, OSS data, accounting records and LKPM reports.

5. Confirm the company name, address and source documents

The company needs an approved name, a legally usable Indonesian address and incorporation data for every founder, shareholder, director and commissioner. Corporate shareholders usually provide constitutional documents, registers, board approvals and authorised signatory evidence. Foreign documents may need an apostille or consular legalisation, followed by an Indonesian sworn translation, depending on the issuing jurisdiction and document type.

Address choice matters because zoning, building use, regional requirements and sector licences may depend on the premises. A virtual office can be suitable for some activities but not for every regulated or location-dependent business. Check the proposed address before the deed is signed, not after OSS rejects the location or a bank challenges the operating substance.

6. Execute the deed and obtain legal-entity approval through AHU

An Indonesian notary prepares the deed of establishment and articles of association in Indonesian. The deed records the company’s name, domicile, purposes and objectives, capital, shareholders and management. After execution, the filing is submitted through the Ministry of Law’s AHU system. The company becomes a legal entity upon ministerial approval, not merely when the founders sign the deed.

At this stage, verify the share table, KBLI wording, management names and passport or corporate data carefully. Correcting an avoidable inconsistency later may require another corporate resolution, notarial deed and AHU update. The beneficial ownership filing should reflect the natural persons who ultimately own or control the company, including control that is not obvious from the direct shareholder register.

7. Activate tax registration and the OSS account

The company must have its tax identity and clean data across AHU, the tax system and OSS. System integrations can reduce duplicate filing, but founders should still verify the NPWP, address, email, responsible person and shareholder information rather than assuming every field has synchronised correctly. Tax registrations beyond the NPWP depend on the company’s activities, transaction profile and staffing.

The OSS account is then used to obtain the Business Identification Number, or NIB. The NIB is a core business identity, but it is not a universal permission to commence every activity. The company’s risk level, location and sector determine which standard certificates, licences or supporting approvals must also be fulfilled.

8. Complete risk-based and sector licensing

Indonesia’s current risk-based licensing framework is governed by Government Regulation No. 28 of 2025, effective 5 June 2025, which replaced Government Regulation No. 5 of 2021. It covers basic requirements, business licences, licences to support business activities, OSS procedures, supervision and sanctions.

As a working model, low-risk activities generally rely on an NIB; medium-risk activities add a standard certificate, with verification required for the higher medium-risk category; high-risk activities require a licence before the regulated activity begins. Environmental, building, product, health, construction, trade, transport, financial, digital or other sector approvals may sit alongside that framework. The exact deliverable list must be generated from the KBLI, scale, location and operational facts.

Do not treat an OSS-issued document as proof that every substantive condition has been met. Some certificates are based on the business’s statement and remain subject to verification and supervision. Build an evidence file for premises, technical standards, qualified personnel, equipment and other commitments.

9. Open the corporate bank account and document funding

Once the legal entity and core registrations exist, the company can approach an Indonesian bank. Banks apply their own KYC and beneficial ownership review, so timing depends on the shareholder chain, signatories, business model and source-of-funds documents. A multi-layer foreign corporate shareholder normally requires more evidence than a simple individual cap table.

Record capital contributions consistently. The shareholder resolution, deed, bank transfer narrative, accounting entry, OSS investment data and later LKPM reports should tell the same story. If the business will also use shareholder loans, document the commercial terms, corporate approvals, tax treatment and foreign-exchange reporting separately; debt is not a casual substitute for subscribed equity.

10. Add Investor KITAS or foreign-work permissions as a separate workstream

Forming a PT PMA does not automatically grant a foreign shareholder or director the right to stay in Indonesia or perform every type of work. Investor residence status, including the current E28A category, is a separate immigration process with its own eligibility, shareholding and activity conditions. Operational employment outside the permitted investor role may trigger manpower requirements.

For a combined entity and immigration plan, review MLS’s Investor KITAS and PT PMA Indonesia service. The correct sequence matters: the corporate records, shareholding and role used in the immigration application must match the company structure. Do not appoint a foreigner or promise a work scope based solely on a sales brochure or an old visa index.

How long does it take to set up a company in Indonesia?

A straightforward PT PMA project may take roughly two to six weeks from complete, usable documents to core incorporation and OSS outputs. This is a practical planning estimate, not a statutory deadline or an approval promise. The full time to operational readiness can be longer when a sector licence, environmental approval, product registration, construction requirement, complex foreign shareholder chain, sworn translation, apostille, bank KYC or immigration process is involved.

The fastest projects are not those that rush the notarial appointment. They are those that settle the KBLI, ownership, management, capital, address and licence map before documents are circulated. A gap discovered after AHU approval can cause amendments, fresh shareholder resolutions and inconsistent government records.

PT PMA setup document checklist

• Business model summary, revenue flows, customer type, project locations and proposed KBLI codes.
• Foreign-ownership analysis for each activity and any Indonesian partner or sector condition.
• Cap table, funding schedule, director and commissioner appointments, and beneficial ownership chart.
• Passport and address details for individual parties; constitutional and authority documents for corporate parties.
• Apostille or legalisation and sworn Indonesian translation plan for foreign documents where required.
• Company name alternatives and a verified business address suitable for the intended activities.
• Paid-up capital evidence and an investment plan that can be reconciled with OSS, accounts and LKPM.
• Licence matrix covering NIB, risk-based certificates, sector approvals, premises and operational commitments.
• Bank KYC pack, source-of-funds records and signatory approvals.
• Immigration and manpower plan for foreign shareholders, directors, commissioners and employees.

Common mistakes foreign founders should avoid

Choosing a KBLI from a competitor’s website

Two businesses that look similar online may have different contracting models, regulated functions or licensing consequences. Use the company’s own activities and agreements as the basis for classification.

Treating IDR 2.5 billion as the entire setup budget

Paid-up capital, planned investment and professional costs are separate. A company can meet a deed-level number yet remain underfunded for its actual OSS commitments and operating plan.

Assuming the NIB is the final licence

The NIB identifies the business. Medium- and high-risk activities may require certified standards, verification or licences before commercial operation. Sector rules can add further approvals.

Using a nominee to bypass foreign-ownership rules

Side letters that conceal the real owner create legal, regulatory, tax, banking and beneficial ownership exposure. If a sector is restricted, redesign the model lawfully or choose another route.

Leaving compliance until the first annual tax return

PT PMA compliance begins immediately. Maintain corporate registers, bookkeeping, tax filings, OSS commitments, licence conditions and investment reporting from day one.

What happens after incorporation?

A PT PMA needs a recurring compliance calendar. Depending on its stage and profile, this includes LKPM investment reporting through OSS, tax and bookkeeping, payroll and manpower compliance, annual corporate approvals, licence maintenance, beneficial ownership updates and reporting changes to shareholders, directors, commissioners, address, capital or business activities.

The post-incorporation file should connect the company’s legal documents to operational evidence: invoices should match licensed activities; employees should have appropriate roles and permissions; capital and investment should reconcile to accounts; and OSS commitments should be supported by technical or premises records. Regulators supervise substance, not only whether a PDF was issued.

Frequently asked questions

1. Can a foreigner own 100% of a company in Indonesia?

Yes, many business fields permit 100% foreign ownership, but not all. The answer depends on the relevant KBLI, business scale, investment list and sector-specific rules. Check the activity before signing a shareholder arrangement or paying a provider.

2. How many shareholders does a PT PMA need?

An Indonesian limited liability company generally requires at least two shareholders. They can be individuals, legal entities or a combination, subject to foreign-ownership restrictions and the company’s intended structure.

3. What is the minimum paid-up capital for a PT PMA in 2026?

The general minimum issued and paid-up capital is IDR 2.5 billion under BKPM Regulation No. 5 of 2025, unless a sector rule requires a higher amount. Do not confuse this with the planned investment value, which is generally above IDR 10 billion per KBLI per project location excluding land and buildings, subject to calculation rules and exceptions.

4. Does a PT PMA automatically receive an NIB?

No. AHU legal-entity approval and the NIB are distinct outputs. After incorporation, the company must complete its OSS registration and business data to receive the NIB and any further risk-based licences.

5. Can a PT PMA use a virtual office?

Sometimes. Suitability depends on zoning, building use, local requirements and the business activity. Manufacturing, warehousing, clinics, hospitality and other location-dependent activities usually need premises that satisfy more specific standards.

6. Can the foreign director work under an Investor KITAS?

The answer depends on the person’s shareholding, corporate position and actual activities. Investor residence status does not authorise every operational job. Match the E28A conditions, company records and any manpower obligations before the person begins work.

7. Should I establish a PT PMA or acquire an existing company?

A new PT PMA offers a clean corporate history but requires fresh licensing and operational setup. An acquisition may provide contracts, staff, assets or licences, but it carries historical liabilities and change-of-control issues. Legal and tax due diligence should drive the choice.

Build the company around the business you will actually operate

The most useful PT PMA setup is not the one with the quickest deed. It is the one whose ownership, KBLI, capital, licences, bank records, immigration position and compliance calendar fit the commercial plan. That alignment reduces amendments, avoids gaps between AHU and OSS data and gives banks, customers and regulators a coherent record.

Master Legal Solution can coordinate the legal structuring, incorporation, OSS licensing and Investor KITAS workstream for foreign founders. Discuss your Indonesia market-entry plan with MLS before you lock the cap table, address or KBLI selection.

Authoritative sources checked on 21 September 2026

• Government Regulation No. 28 of 2025 on Risk-Based Business Licensing
• Ministry of Investment/BKPM Regulation No. 5 of 2025
• Presidential Regulation No. 10 of 2021 on Investment Business Fields
• Law No. 40 of 2007 on Limited Liability Companies
• Presidential Regulation No. 13 of 2018 on Beneficial Ownership
• Directorate General of Immigration — E28A Investor Visa information

Editorial note

This article provides general legal information, not a definitive opinion for a specific investment. Foreign ownership, capital, licensing, tax, employment and immigration results depend on the actual activity, parties, location and documents.