One popular way for foreigners to own property in Bali is by setting up a PT PMA (Foreign Investment Company). With this structure, you can not only invest but also run a business legally in Bali.
In this guide, we’ll walk you through everything you need to know about setting up a PT PMA in Bali—including the legal requirements and costs involved.
Key Takeaways
- PT PMA (Foreign Investment Company) allows foreigners to legally own property and run a business in Bali by owning a company that holds the property.
- It’s governed by Indonesia’s Omnibus Law, Investment Law, and Company Law, and registration is done through the Online Single Submission (OSS) system.
- The minimum capital requirement is IDR 2.5 billion (~USD 150,000), and the company must have at least two shareholders, one director, and one commissioner.
- A PT PMA provides legal protection, full ownership rights (in eligible sectors), and flexibility for investment, property ownership, and business operations in Indonesia.
What is PT PMA? Definition, How It Works and Benefits
PT PMA stands for Penanaman Modal Asing or "Foreign Investment Company." It’s a special company that allows foreigners to own property in Indonesia.
Here's how it works: Instead of buying property directly, you set up a PT PMA company in Indonesia. Then, the company buys the property. This way, you own the company that owns the property.
For example, an Australian investor wants to enter the Indonesian market by setting up a PT PMA to develop a resort in Bali.
They must register the PT PMA with the Indonesian Investment Coordinating Board (BKPM) and ensure they meet the minimum capital requirement, which could be around IDR 10 billion (approximately USD 700,000), depending on the business sector.
Here are the benefits of a PT PMA:
- Ownership Rights: Your PT PMA can fully own property, unlike other options where you might only lease.
- Legal Protection: It offers better legal security for your investment.
- Flexibility: You can use the property for various purposes, like a home, a rental, or a business.
Legal Framework for PT PMA
The establishment and operation of a PT PMA (foreign-owned limited liability company) in Indonesia are mainly regulated by three key laws:
- Omnibus Law (Law No. 11 of 2020): Serves as the overarching legislation aimed at simplifying business regulations and is now the primary reference for foreign investment procedures.
- Investment Law (Law No. 25 of 2007): Provides the general legal foundation for all types of investment activities in Indonesia.
- Company Law (Law No. 40 of 2007): Governs the incorporation and internal structure of limited liability companies, requiring at least two shareholders as well as a board of directors and commissioners.
Read More: Can Foreigners Buy Property in Bali? Full Legal Guide Explained
Understanding Foreign Ownership and Permitted Sectors in Indonesia
Before establishing a PT PMA in Indonesia, it’s essential to verify whether your business activity is eligible for full foreign ownership under the current Positive Investment List.
According to Presidential Regulation No. 10 of 2021, as amended by Presidential Regulation No. 49 of 2021, more than 200 business sectors in Indonesia are now open to 100% foreign investment.
However, certain industries remain prohibited or restricted:
| Fully Restricted Industries | Partially Restricted Industries | Sectors with Conditional Foreign Ownership |
|---|---|---|
| • Narcotics production • Gambling and casinos • Coral extraction • Chemical weapons manufacturing • Alcoholic beverage production | • Mining and energy • Agriculture • Tourism and hospitality • Small-scale retail and services | • Healthcare and pharmaceuticals • Education • Telecommunications and broadcasting |
Requirements for Registering a PT PMA in Indonesia
To establish a foreign-owned company (PT PMA) in Indonesia, investors must meet several key criteria set by the Investment Coordinating Board (BKPM):
- Minimum Paid-Up Capital: The minimum capital for a PT PMA Indonesia is IDR 2.5 billion (approximately USD $150,000). It used to be IDR 10 billion, but it’s been lowered.
- Shareholders and Company Structure: A PT PMA must have at least two shareholders, one resident director, and one commissioner. The director can be an Indonesian or a foreigner with a valid KITAS.
- Registered Business Address: Every PT PMA is required to have a registered business address within Indonesia. Proof of this address must be submitted as part of the incorporation process.
- Business Classification (KBLI): Choose the correct KBLI because it will:
- Set the limit of foreign ownership allowed for your business.
- Determine extra steps needed to activate your Business Identification Number (NIB) if your business is not considered low-risk.
In addition, shareholders must sign a capital declaration letter confirming that they have sufficient funds to fulfill the company’s required capital.
Read More: New Regulations Are Changing How You Buy Property in Bali
Structure of PT PMA
A PT PMA is structured with Shareholders, a Board of Commissioners, and Directors, requiring at least one Commissioner and one Director.
Since the company is privately owned, shareholders may be individuals, corporations, or foundations. Shareholders hold the ultimate decision-making authority within the company.
Read More: Best Business to Invest in Bali for Foreigners: 2025 Guide
How to Register a PT PMA in Indonesia
Setting up your business in Indonesia is now easier, thanks to the government’s Online Single Submission (OSS) system, which centralizes most registration processes. Here’s a step-by-step guide:
1. Prepare Documents and Reserve Your Company Name
The first step is gathering your information and legal paperwork. All required documents can be uploaded safely through the online system. During this stage:
- You’ll reserve a unique company name with the Ministry of Law and Human Rights.
- A Deed of Establishment will be drafted. This includes your Articles of Association, list of shareholders, and the correct KBLI business classifications.
- Once complete, a public notary in Indonesia will officially notarize the deed to make it valid.
2. Get Approval from the Ministry of Law and Human Rights (MOLHR)
After notarization, your company’s documents are submitted to the MOLHR for review.
Once approved, the Ministry issues a legal decree, confirming that your PT PMA is officially recognized as a legal business entity in Indonesia.
3. Register for a Tax ID (NPWP)
Next, your company must be registered with the Directorate General of Taxes to obtain a Tax Identification Number (NPWP). This number is mandatory for financial transactions, tax reporting, and to apply for additional business permits later on.
Read More: Understanding Bali Property Taxes for Foreign Buyers
4. Obtain a Business Identification Number (NIB)
Using the OSS system, your PT PMA will be issued a Business Identification Number (NIB).
This number serves multiple functions:
- It acts as your main business license (for low-risk sectors).
- It doubles as your import license and Customs Identification Number (NIK).
- It automatically registers your company with Indonesia’s social and health security programs (BPJS Ketenagakerjaan and BPJS Kesehatan).
5. Open a Corporate Bank Account
Once you have your MOLHR decree, NPWP, and NIB, you can open a corporate bank account in Indonesia. Keep in mind that most banks require a resident director to open the account.
If your director is a foreigner, they’ll need to secure a KITAS (work and stay permit) before the bank allows you to proceed. This is also when you’ll make your initial capital deposit according to your investment plan.
6. Apply for Additional Licenses and Permits
Your NIB serves as a general business license, but depending on your industry, you may need extra permits before starting operations. Some common examples include:
- IUJK (Construction Services License)
- BPOM approval for food, cosmetics, or pharmaceuticals
- PSE License for businesses in electronic transactions
- Other sector-specific permits from relevant ministries
Once everything is approved, your PT PMA can start doing business. Now you can purchase property, sign contracts, and start any planned operations like renting out properties or developing land.
Estimated Cost to Establish PT PMA
Below is a general cost estimate to help you understand what to expect. Keep in mind that these are approximate figures and can vary depending on your business type, location, and consultant fees.
| Step | Estimated Cost (USD) |
|---|---|
| 1. Choose a Business Name | Free |
| 2. Prepare Documents | $50–$100 (for notarization & copies) |
| 3. Register the Company | $100–$300 |
| 4. Get Approvals & Licenses | $500–$1,000 per permit |
| 5. Open a Bank Account | Under $100 (deposit varies by bank) |
| 6. Paid-up Capital Requirements | Minimum $150,000 |
Read More: Cost of Property in Bali: What You Need to Know (2025)
Conclusion
Setting up a PT PMA is a smart way for foreigners to own property in Bali. But as you’ve learned, there are quite a few things to manage, like tracking finances, paying taxes, and reporting your company’s activities to the government.
You’ll need help from lawyers and local experts to make the process smoother. And we're here to help!
Book a free call by clicking the button below, and let's talk about your next steps—whether you're buying a property for personal use or starting a rental business.
FAQ
The approval time for a PMA varies, but it generally takes around 4 to 8 weeks if all documents are complete and the business is not considered high-risk.
Not anymore. The minimum paid-up capital for a PT PMA is now IDR 2.5 billion per company, according to BKPM Regulation No. 5 of 2025. The previous rule requiring IDR 10 billion per KBLI (Business Classification Code) has been changed.
Yes, setting up a PT PMA is the legal way for foreign investors to hold land rights in Indonesia.
PT PMAs are subject to Corporate Income Tax (PPH Badan), VAT (Value-Added Tax), PPh21 (Income Tax), PPh26 (Income Tax), and Bea Materai (Revenue Stamp)
Yes, a foreign investment company (PMA) can be 100% foreign-owned in certain business sectors—but not in all industries.
