Understanding Indonesian Business Regulations
Indonesia maintains a Positive Investment List (replacing the old Negative Investment List) that specifies foreign ownership limits for different business sectors. Most technology, consulting, trading, and professional services now allow 100% foreign ownership under the Omnibus Law reforms. However, certain sectors including media, retail (below specific thresholds), and some service categories still have restrictions.
Minimum capital requirements for PT PMA companies are IDR 10 billion (approximately $620,000) in authorized capital, with IDR 2.5 billion (approximately $155,000) paid-up. However, these requirements can often be structured creatively depending on your business classification and investment plan. Our legal partners advise on the optimal structure for your specific situation, potentially reducing initial capital requirements through proper KBLI code selection.
Ongoing compliance includes monthly tax reporting (PPh 21 for employee withholding, PPh 23 for service withholding, PPN/VAT), annual corporate tax returns, LKPM investment activity reports, and various ministry reporting requirements depending on your business sector. Our six-month compliance support package covers all of these obligations and trains your team or local accountant to handle them independently going forward.