Foreign investment limited liability company (PMA) in general
Based on Perka BKPM 4 of 2021 Article 1 number 13 (Perka BKPM 4/2021), PMA is an investment activity for conducting business in the territory of the Republic Indonesia carried out by foreign investors, either using foreign capital entirely or joint ventures with investors Domestic.
Article 9 paragraph 9 Perka BKPM 4/2021 states that PMA must be in the form of a limited liability company based on law Indonesia and domiciled within the territory of the State Unity of the Republic of Indonesia, unless otherwise specified by law.
Article 12 paragraphs 1-2 and paragraph 7 of Perka BKPM 4/2021 state that business entities classified as PMA are categorized as as a large business and must comply with the provisions minimum investment value, unless otherwise determined by legislation. The minimum investment value requirement for PMA is that the total investment is greater than IDR 10,000,000,000.00 (ten billion rupiah), excluding land and buildings per KBLI business sector of 5 (five) digits per project location. Then the minimum capital requirements for PMA is minimum issued/paid up capital Rp. 10,000,000,000.00 (ten billion rupiah), except determined otherwise by statutory regulations.
For PMA, it is also necessary to pay attention to the business activities or business fields that will be choose because there are restrictions on business fields which are regulated in Presidential Regulation Number 49 of 2021. So, before the PMA Company establishes a company, it must first ensure that the business field does not exist restrictions for PMA Companies.
Incorporation process
- Establish the company by signing the deed of establishment (which includes the articles of association). Then, after being registered with and approved by the MOLHR by the issuance of MOLHR Decree, the company will obtain legal entity status. The MOLHR’s online/registration system will additionally issue a taxpayer identification number (Nomor Pokok Wajib Pajak or NPWP) to the newly established company.
- Apply for a Business Identification Number (NIB) through the Online Single Submission (OSS) system maintained by the OSS Agency, currently adopting a risk-based approach (RBA). The NIB also applies as a Company Registration Certificate (TDP), Importer’s Identification Number (API), customs access and initial mandatory manpower reporting. Acquiring an NIB means that the company has participated in health and manpower social security programs.
- Depending on the risk level of the business, the company is deemed ready to operate once it has been issued an NIB (if the risk level is low), to obtain standard certification from the relevant ministries via the OSS-RBA system (if the risk level is medium) or to obtain a license (if the risk level is high).
If you are interested in finding out more about Foreign Investment Limited Liability Company (PMA) or need assistance regarding the information above, Our Firm, Suria Nataadmadja & Associates Law Office can help you.
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