Foreign investors often face complex regulations when establishing a corporate presence in the archipelago. The rules regarding capital, zoning, and business activities shift frequently, creating uncertainty for new entrants. Misunderstanding these requirements can lead to frozen assets, rejected permits, and significant financial loss.
The enforcement of BKPM Regulation 5/2025 has fundamentally changed investment rules in the region. Relying on outdated advice about minimum capital or “nominee” structures leads to administrative sanctions. Investors must navigate strict paid-up capital thresholds and lock-up periods to remain compliant.
This guide provides the definitive process for PT PMA Bali Setup in 2026. We break down the mandatory investment values, KBLI selection strategies, and the integrated licensing process. By following these updated protocols, you can secure your business assets and operate legally in Indonesia.
Table of Contents
- Regulatory baseline for PT PMA in Bali
- Eligibility and structure for foreign investors
- Step-by-step PT PMA setup process
- Key risks and penalties for non-compliance
- Choosing the right KBLI for your business
- Understanding the new capital requirements
- Real Story: Overcoming zoning restrictions in Canggu
- Visas and work permits for foreign founders
- FAQs about PT PMA Bali Setup
Regulatory baseline for PT PMA in Bali
The regulatory foundation for foreign companies has tightened under the latest investment directives. BKPM Regulation 5/2025 explicitly reduces the minimum issued capital to IDR 2.5 billion per company. However, this capital is subject to a strict 12-month lock-up period to ensure genuine financial capability. This prevents investors from withdrawing funds immediately after registration, a common practice in the past.
Investors must understand that this lower paid-up threshold does not replace the investment realization requirement. You must still plan for a total investment value greater than IDR 10 billion per business line. This figure excludes the value of land and buildings, focusing instead on operational expenditure like equipment, marketing, and staff salaries.
All licensing is now processed through the Online Single Submission Risk-Based Approach (OSS-RBA). This system issues the Business Identification Number (NIB) based on your specific risk level. The government uses this integrated platform to monitor compliance across all sectors in real-time, flagging companies that fail to report their activities.
Eligibility and structure for foreign investors
A Foreign Owned Company (PT PMA) requires a minimum of two shareholders to be legally established. These shareholders can be foreign individuals, foreign corporate entities, or a combination of both. Once any foreign party holds shares, the company is automatically classified as a PMA and falls under BKPM supervision.
Common use cases for a structure in Bali include luxury villa developments and hospitality ventures. Investors also frequently establish companies for management consulting or digital services targeting the tourism market. Each business model requires a specific structure to ensure legal operations in Indonesia, particularly regarding land usage and permit types.
You must consult the Positive Investment List to determine foreign ownership limits. Sectors like large-scale tourism are generally open to 100 percent foreign ownership. However, certain activities may still have caps or require a partnership with a local SME, especially in traditional industries or restricted zones.
Step-by-step PT PMA setup process
The PT PMA Bali Setup begins with defining your business model and selecting the correct activities. You must match your revenue streams to the 5-digit KBLI codes listed in the Indonesian Standard Industrial Classification. This step dictates which licenses you will need to acquire later in the process and determines your risk level in the OSS system.
Once the structure is defined, you proceed to the Deed of Establishment (Akta Pendirian) before a notary. This deed outlines the authorized capital and share distribution between the founders. The notary then files this document electronically with the Ministry of Law and Human Rights to obtain legal entity status.
After obtaining the Decree of Establishment (SK Pengesahan), the company is a legal entity. You then register the company in the OSS system to obtain your NIB and risk-based licenses. The final steps involve opening a corporate bank account and injecting the mandatory paid-up capital to activate your financial operations.
Key risks and penalties for non-compliance
Under-capitalization is the most common pitfall for new foreign investors in 2026. Treating the IDR 2.5 billion paid-up capital requirement as a suggestion rather than a rule invites scrutiny. The BKPM actively monitors bank statements and financial reports to verify that this capital remains in the company and is used for legitimate business purposes.
Using the wrong KBLI codes creates severe operational risks for your business. For example, using a real estate development code while running daily villa rentals is a compliance violation. This mismatch can lead to tax audits and the sealing of your property by local authorities, as the license does not match the activity.
Leaving a company dormant without reporting is another dangerous practice. An inactive entity must still file tax returns and the Investment Activity Report (LKPM). Failure to submit these reports can result in the revocation of your NIB and difficulties with future immigration applications for directors and commissioners.
Choosing the right KBLI for your business
Selecting the correct KBLI is critical because it defines your legal scope of work. If you plan to build and sell villas, you need a real estate development code. If you plan to rent them out daily, you require a specific accommodation code, as these are regulated by different ministries.
Investors often make the mistake of choosing “catch-all” codes to appear broad. However, each KBLI triggers its own IDR 10 billion investment requirement. It is safer and more cost-effective to select only the codes that align directly with your immediate revenue plans to avoid inflating your investment commitment.
Consulting services and digital marketing agencies have their own specific classifications. Ensure that your selected codes are open to foreign investment under the Positive List. A precise KBLI selection prevents future disputes with the tax office regarding your income sources and ensures your invoices are valid.
Understanding the new capital requirements
The distinction between paid-up capital and investment value is crucial for a successful PT PMA Bali Setup. Paid-up capital is the money you inject into the bank account to start the company. The investment value is the total amount you commit to spending on the project over time, usually within a 3-5 year period.
BKPM Regulation 5/2025 mandates that the IDR 2.5 billion paid-up capital cannot be withdrawn for personal use. It must be used for genuine business expenses like land lease payments or construction costs.
This rule prevents the practice of “recycling” capital to set up multiple shell companies without actual economic contribution.
You must declare an investment value above IDR 10 billion per KBLI per location. This declaration is a commitment to the government that you will contribute significantly to the economy. Progress toward this target is tracked quarterly through the LKPM reporting system, which is mandatory for all PT PMA entities.
Real Story: Overcoming zoning restrictions in Canggu
Marcus is a 38-year-old architect from Germany. He lived in Pererenan and wanted to build a wellness retreat. He leased land but did not check the zoning rules or his company codes.
Construction stopped when the Satpol PP arrived to inspect the site. They informed him that his land was in a strict Green Zone, prohibiting commercial building. To make matters worse, his consultant had registered a general trading KBLI, which did not cover hospitality operations, leaving him legally exposed on two fronts.
That’s when he used a visa agency in Bali to conduct a full legal audit. The team identified a compliant plot in a Tourism Zone nearby and corrected his KBLI codes. Marcus learned that aligning his PT PMA Bali Setup with local zoning laws was the only way to complete his project.
Visas and work permits for foreign founders
Once your company is established, you can apply for immigration permits. The Investor KITAS is a popular option for shareholders who want to reside in Indonesia. This visa is valid for two years and allows for easy entry and exit, making it ideal for business owners who travel frequently.
To qualify for the Investor KITAS, you must hold a minimum value of shares in the company. Current regulations typically require a share value of at least IDR 10 billion for the sponsor company to be eligible. If you do not meet this threshold, you may need a standard Work KITAS, which has different requirements.
The Work KITAS requires an RPTKA (Foreign Manpower Utilization Plan) approved by the Ministry of Manpower. This process involves paying a monthly levy to the government. Proper structuring during the setup phase ensures you remain eligible for the most efficient visa options and avoids unnecessary administrative costs.
FAQs about PT PMA Bali Setup
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What is the minimum paid-up capital for a PT PMA in 2026?
The minimum issued and paid-up capital is IDR 2.5 billion per company.
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Can foreigners own land with a PT PMA in Bali?
No. Foreigners cannot hold Hak Milik. A PT PMA uses Hak Pakai or HGB.
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How long does the setup process take?
The process typically takes 2 to 4 weeks. This depends on the notary and OSS.
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Do I need a local partner for a PT PMA?
Most sectors allow 100 percent foreign ownership. Hospitality and consulting are usually open.
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Can I use the paid-up capital for business expenses?
Yes, you can use it for operational costs, but you cannot simply withdraw it.
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What happens if I don't file my LKPM report?
You risk administrative sanctions. The government may revoke your business license.
