Direct Investment for Foreigners (PMA)
To invest directly in Indonesia, you need to set up a limited liability company that is wholly or partly owned by the foreigner (s) commonly referred to as PT. PMA (or just PMA). There are so many documents related to the law to prepare along with several other requirements that must be met by the company. The formation of PMA is regulated in Law no. 25 of 2007 (UU) and Law no. 40. Year 2007 (Company Law).
Before you decide whether you want to build a representative office or PMA, you also need to know about the Negative Investment List. This is because some industries in Indonesia are strictly closed or partially closed to foreign investment. This list is subject to revision by the central government of the Republic of Indonesia so you should stay informed about this in the future. For sectors or industries that are partially closed to foreigners, you can still run your business or PMA in Indonesia through local partnership.
Once you have understood the investment negative list and determined the type of investment you would like to have, you can start preparing some prerequisite documents to start building your company. You have to realize that the bureaucracy in Indonesia is a bit complicated due to the process of registering companies with various government agencies from the lowest level to the ministerial level.
For the first step, you will need to contact the Indonesian Investment Coordinating Board (BKPM). Even though BKPM has a One-Stop-Service Center (OSS-C) to improve services and cut bureaucratic procedures, you may still be overwhelmed by small details if you are someone who is unfamiliar with local regulations and languages.
