By KYN AI Advisory Team — AI implementation specialists, Singapore
A PT PMA is an Indonesian limited liability company with foreign shareholders. A local PT is owned by Indonesian shareholders only. Under BKPM Regulation No. 5 of 2025, a PT PMA needs IDR 2.5 billion in paid-up capital per business activity (KBLI) and a total investment plan of IDR 10 billion per KBLI, down from IDR 10 billion in paid-up capital. The cash portion is locked in the company bank account for 12 months unless used for capital expenditure or working capital. The right choice turns on who will own the shares, not on cost alone.
What is the difference between a PT PMA and a local PT?
Both are limited liability companies registered in Indonesia and licensed through the OSS system. The difference is ownership.
| Question | PT PMA | Local PT | |---|---|---| | Who can hold shares | Foreign individuals or companies, alone or with Indonesian partners | Indonesian citizens and Indonesian-owned entities | | Capital rule | Minimum paid-up capital and investment plan under investment regulations | Governed by company law and the company's own deed | | Sector access | Subject to the Positive Investment List and sector rules | Open to sectors available to domestic investors | | Typical user | Foreign founder or regional group with an Indonesian arm | Indonesian-owned business |
A foreign owner who holds shares through a nominee arrangement to avoid PT PMA rules takes legal risk. Take advice from an Indonesian lawyer or notary before you use a structure like this.
How much capital does a PT PMA need?
The law firm Withers summarises the change in its note on BKPM Regulation No. 5 of 2025. Its main points:
- Paid-up capital. IDR 2.5 billion per KBLI, down from IDR 10 billion. The reduction applies per business activity.
- Total investment plan. The investment value stays at IDR 10 billion per KBLI. Only IDR 2.5 billion of that must be deposited as cash. The remaining IDR 7.5 billion can come from qualifying assets and expenditure, such as machinery, equipment, vehicles, feasibility studies, permits, construction and operations.
- Related KBLI. Related KBLI groups can be consolidated under one investment value instead of separate IDR 10 billion tranches. Wholesale, food and beverage, construction and manufacturing are among the examples Withers gives.
- Lock-up. The IDR 2.5 billion cash portion must stay in the company bank account for 12 months, unless used for capital expenditure or working capital.
- Property and similar sectors. Land and building costs can count toward the minimum investment for property, accommodation, agriculture, plantation, farming and aquaculture.
- Date. The regulation was issued on 2 October 2025, and the OSS system was to reflect the rules by 5 October 2025.
Withers describes its article as a summary, not legal advice. The regulation's own text is the authority. Sector regulators can set higher requirements for specific activities, so check the sector rules for your business line.
What does the capital rule mean in practice?
Take a Singapore parent setting up a PT PMA with one business line.
| Item | Amount (IDR) | |---|---| | Total investment plan | 10 billion | | Cash paid up and deposited | 2.5 billion | | Balance in qualifying assets and expenditure | 7.5 billion |
Two business lines, in unrelated KBLI, would carry two investment values and two paid-up capital figures. If the lines are related, ask your adviser whether they can be consolidated.
Cash in the account is not free cash. The 12-month lock-up means you cannot treat the IDR 2.5 billion as a general reserve. Plan the first-year budget so that rent, salaries, equipment and licences fall inside the permitted uses.
What is the setup process?
Registration runs through the OSS system. A typical sequence:
- Choose the KBLI codes for the activities you will carry out. This choice drives capital, licences and permitted activity.
- Check the Positive Investment List for foreign ownership limits on those codes.
- Prepare the deed of establishment with an Indonesian notary: shareholders, directors, commissioners, capital and registered address.
- Obtain legal entity approval and the tax identity for the company.
- Register on OSS to obtain the business identification number (NIB) and the licences for your activity.
- Open the bank account and deposit the paid-up capital.
- Register for tax obligations and, if you will employ people, social security.
Timing depends on the KBLI, the completeness of your documents and the notary. Advisers quote anything from a few weeks to a few months, and no regulator publishes a fixed processing time, so this article does not state one. Ask each adviser for the steps they control, the steps the government controls, and a date for each.
Which should you choose?
Choose a PT PMA if:
- a foreign person or company will hold shares;
- the business line is open to foreign ownership on the Positive Investment List;
- you can fund the investment plan and carry the 12-month lock-up.
Choose a local PT if:
- the shareholders are Indonesian;
- the foreign party works through a contract, such as a service agreement, rather than ownership;
- the business line is closed or capped for foreign investment.
A foreign group sometimes uses both: a PT PMA for the regulated or foreign-owned business and a local partner company for activities where foreign ownership is limited. This needs careful legal structuring. Independent legal advice for each party is not optional here.
What does it cost to run a PT PMA after setup?
Setup is one cost. Running the company is recurring.
- Accounting and tax compliance in Indonesia, monthly and annually, in Bahasa Indonesia.
- Reporting on investment activity to the authorities, as required.
- Local staff and a local address for the registered office.
- A bank account that you operate within the lock-up rules.
- Statutory filings by directors and commissioners.
A system that records every transaction in rupiah, with Bahasa Indonesia and English side by side, makes these filings easier to prepare. See operations systems and finance systems.
Where KYN fits
KYN builds systems in your own cloud account for SMEs in Singapore, Hong Kong, Indonesia and Malaysia. For an Indonesian entity, that can be a finance and operations system with a bilingual interface, a ledger in rupiah and reports to the parent company. Every action is logged with the actor, and filings and payments wait for a named person. KYN does not set up companies and does not give legal advice. Use an Indonesian notary and a licensed adviser for formation.
Entity set-up work begins with a 14-day review of your structure, shareholders and licensing needs in Indonesia. A tracker for capital, filings and deadlines ships in under 90 days. See integrations and security.
Frequently asked questions
Is the minimum capital for a PT PMA IDR 10 billion?
Not for paid-up capital. Under BKPM Regulation No. 5 of 2025, the paid-up capital minimum is IDR 2.5 billion per KBLI. The IDR 10 billion figure remains as the total investment plan per KBLI, of which only IDR 2.5 billion must be deposited as cash.
Can I use the IDR 2.5 billion right away?
Only for permitted uses. Withers reports that the cash portion must stay in the company bank account for 12 months unless it is used for capital expenditure or working capital. Plan the first year around this.
Can a foreign founder own 100% of a PT PMA?
It depends on the business line. The Positive Investment List and sector rules set the limit for each KBLI. Check the code you plan to use before you design the shareholding.
Checked 30 October 2026.
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