For foreign investors eyeing the vibrant markets of Bali, Jakarta, or beyond, the regulatory landscape of 2026 offers a refreshing clarity compared to the ambiguity of previous decades. Indonesia has codified a robust path for international business, moving away from opaque nominee arrangements toward transparent foreign ownership. However, the process remains rigorous. Navigating the transition from a business concept to a fully licensed entity requires a precise understanding of the latest Ministry of Investment (BKPM) regulations. Missteps in the initial structuring—specifically regarding capital allocation and business classification—can lead to costly licensing delays or even forced restructuring down the line.
The stakes are particularly high regarding financial commitments. While the legal entry barrier has been lowered with a minimum paid-up capital of IDR 2.5 billion, the overarching investment requirement per project remains strict. Many entrepreneurs operating in Bali confuse the cash they must inject upfront with the total value they must commit to realizing, a distinction that triggers frequent audits. Furthermore, the Online Single Submission Risk-Based Approach (OSS RBA) has automated enforcement, meaning that errors in your initial setup are instantly flagged, potentially blocking your ability to import goods or sponsor visas.
This guide provides a definitive roadmap for 2026. We will walk you through the legal framework, the critical financial thresholds under BKPM Regulation 5/2025, and the practical steps to incorporate your foreign-owned company. Whether you are opening a boutique resort in Uluwatu, Bali, or a software consultancy in Ubud, understanding how to Establish a PT PMA correctly is the foundation of your long-term success and security in the archipelago. For professional assistance with your setup, consider consulting a trusted tax management company to ensure full compliance.
Table of Contents
- Legal Framework and Ownership Eligibility
- Capital Requirements: The 2026 Financial Thresholds
- Step 1: Pre-Incorporation Structuring
- Step 2: Incorporation and MoLHR Approval
- Real Story: The "Paper Capital" Trap in Canggu
- Step 3: OSS Registration and Risk-Based Licensing
- Post-Establishment Obligations and Reporting
- Key Risks and Common Mistakes
- FAQ's about PT PMA Establishment
Legal Framework and Ownership Eligibility
The PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the primary legal vehicle for foreign investors in Indonesia. Governed by the Investment Law and Company Law, it is a limited liability company that allows for foreign shareholding. In 2026, the guiding star for eligibility is the Positive Investment List (Perpres 10/2021 and its updates). This regulation replaced the old “Negative List” and essentially opened the majority of business sectors to 100% foreign ownership, including manufacturing, technology, and many service industries popular in Bali.
However, “open” does not always mean unconditional. Certain sectors, such as specific types of retail, distribution, or education, may still have caps on foreign equity or require a partnership with a local Micro, Small, and Medium Enterprise (MSME). It is vital to verify your specific business activity against this list. If a sector is reserved for domestic capital, a PT PMA cannot operate there legally. Attempting to bypass these rules using “nominee” structures (where a local person holds shares on your behalf) is legally risky and explicitly discouraged by current regulations.
Capital Requirements: The 2026 Financial Thresholds
One of the most significant shifts in the 2026 landscape is the clarification of capital rules under BKPM Regulation 5/2025. Previously, practice dictated a rigid IDR 10 billion requirement. Now, regulators have clarified the minimum issued and paid-up capital to IDR 2.5 billion per PT PMA. This amount must be injected into the company bank account once established. This reduction lowers the immediate cash barrier for entry, making it easier for startups and boutique businesses in Bali to launch.
However, this does not mean the government has lowered its expectations. The Total Investment Value requirement remains unchanged. To establish a PT PMA, you must commit to an investment plan of greater than IDR 10 billion per 5-digit KBLI (business classification) per project location. This figure excludes land and building values. Essentially, while you only need IDR 2.5 billion cash as paid-up capital to start, you must demonstrate a credible plan to invest the remaining amount (through working capital or fixed assets) over time.
Step 1: Pre-Incorporation Structuring
Before visiting a notary, you must define the architectural blueprint of your company. The first task is mapping your actual business activities to the correct Klasifikasi Baku Lapangan Usaha Indonesia (KBLI) codes. If you plan to run a Bali villa management company, you need the specific KBLI for real estate activities on a fee basis. If you also want to develop software, that is a separate KBLI.
Crucially, each KBLI triggers its own IDR 10 billion investment requirement. If you select three different business fields, your total investment plan shoots up to IDR 30 billion. Therefore, strategic selection is critical; you should only choose the KBLI codes that are essential to your revenue stream. At this stage, you must also finalize your shareholding structure, ensuring you have at least two shareholders (individuals or corporate entities) to meet the statutory requirement for foreign investors.
Step 2: Incorporation and MoLHR Approval
Once the structure is defined, the formal legal process begins. This is handled primarily by an Indonesian notary, preferably one experienced with Bali regulations if that is your domicile. First, the notary reserves your proposed company name through the Ministry of Law and Human Rights (MoLHR) AHU Online system. The name must be distinctive, contain three words (recommended practice), and use Latin characters.
Following name approval, the notary drafts the Deed of Establishment (Akta Pendirian). This document outlines the company’s Articles of Association, capital structure, and management board (Directors and Commissioners). All shareholders must sign this deed. The notary then submits it electronically to the MoLHR. Upon approval, the Ministry issues the Decree (SK Pengesahan), which formally grants your PT PMA status as a legal entity. Simultaneously, you will obtain your Taxpayer Identification Number (NPWP) from the tax office.
Real Story: The "Paper Capital" Trap in Canggu
Meet Ditto, a 32-year-old tech consultant from the UK. In late 2025, Ditto moved to Pererenan, Canggu, Bali, to set up a boutique software agency. Advised by an informal agent, he initially tried to use a local nominee structure to avoid the capital requirements entirely. However, three months in, his nominee demanded a “fee increase” and threatened to dissolve the company, leaving Marcus vulnerable.
Realizing the danger, Ditto decided to pivot and legitimize his business. He approached a professional consultant to establish a PT PMA correctly. He was initially terrified of the IDR 10 billion figure, assuming he needed that much cash in the bank. His consultant clarified the new BKPM Regulation 5/2025: he only needed IDR 2.5 billion in paid-up capital, which he could use for operational expenses like rent and salaries.
They restructured his company, mapped his KBLI solely to “Software Development,” and filed his investment plan. Within six weeks, Ditto had his own NIB and a fully compliant company. “The peace of mind is worth more than the capital,” Ditto said. “I own my business 100% now, and I’m building assets in my own name in Bali, not someone else’s.”
Step 3: OSS Registration and Risk-Based Licensing
With your legal entity formed, the next phase is licensing via the OSS RBA system (oss.go.id). You will register your company using your NPWP and valid deed data. The system will issue your Business Identification Number (NIB), which serves as your company’s registration number, importer ID (API), and customs access right.
The OSS system automatically assigns a risk level to your specific KBLI.
- Low Risk: The NIB is your final license. You can operate immediately.
- Medium Risk: You need a Standard Certificate (Sertifikat Standar). For Medium-Low, this is a self-declaration. For Medium-High, it requires verification from the relevant ministry.
- High Risk: You need a full Business License (Izin Usaha), often requiring environmental assessments (AMDAL/UKL-UPL) and building permits (PBG). Most service-based PT PMAs in Bali fall into Low or Medium risk, streamlining the process significantly compared to the past.
Post-Establishment Obligations and Reporting
Incorporation is not the finish line. To maintain your license, you must comply with ongoing reporting obligations. The most critical for a PT PMA is the Investment Activity Report (LKPM). This must be filed quarterly via the OSS system, detailing your progress toward the committed IDR 10 billion investment.
Additionally, you must set up your tax reporting. This includes monthly withholding tax filings and VAT reporting if you are a Taxable Entrepreneur (PKP). If you intend to hire foreign staff, you must apply for an RPTKA (Expatriate Placement Plan) and subsequently the Work KITAS. Keeping these administrative wheels turning is essential to prevent your NIB from being frozen by the authorities in Bali.
Key Risks and Common Mistakes
A frequent mistake is the “generic KBLI” trap. Investors often choose a broad Holding Company KBLI thinking it covers everything, only to find they cannot legally issue invoices for consulting services. Another major risk is neglecting the LKPM report. BKPM actively monitors these reports; missing two consecutive quarters can lead to administrative sanctions or license revocation.
Finally, do not underestimate the paid-up capital rule. Regulators emphasize that the IDR 2.5 billion must be “real.” It should be transferred into the company bank account once opened. Treating this as a mere paper entry is dangerous, as audits can demand proof of funds to verify that the company is solvent and compliant with the Investment Law.
FAQ's about PT PMA Establishment
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Can I own 100% of my PT PMA in Bali?
Yes, for most business sectors under the Positive Investment List, 100% ownership by foreign investors is permitted. Check your specific KBLI to be sure.
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What is the minimum cash I need to start?
Under BKPM Regulation 5/2025, the minimum issued and paid-up capital is IDR 2.5 billion.
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Do I need a physical office?
Yes. While a virtual office is allowed for initial incorporation in some areas, a physical location is often required for tax registration (PKP) and specific sectoral licenses in Bali.
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How long does the process take?
If all documents are ready, the process from name reservation to NIB issuance typically takes 3 to 6 weeks.
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Can a PT PMA buy land in Bali?
A PT PMA can hold "Right to Build" (HGB) or "Right to Use" (HP) titles, which provide robust legal security, but it cannot hold "Freehold" (Hak Milik) titles.
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Is the IDR 10 billion investment requirement per shareholder?
No, it is per 5-digit KBLI (business activity) per project location, regardless of the number of shareholders.
