What is a PT PMA in Bali?
PT PMA, which stands for Perseroan Terbatas Penanaman Modal Asing, is a limited liability company established with foreign capital used to invest in Bali, Indonesia. The PT PMA, also called a foreign-owned company, is a golden pathway for foreigners to start commercial activities and investments in Bali, such as villa rentals. Particularly in Bali, where the possibilities are diverse, PT PMA Bali stands out as the best way for foreigners to invest in Bali real estate.
Starting a business in Bali can be done by everybody. Under the guidelines of Law No. 25/2007 regarding investment, also known as the New Investment Law, foreign individuals, companies, or even government bodies can seamlessly operate a PT PMA in Bali.
The difference between PT PMA and PT (Perseroan Terbatas) is the type of ownership. PT is only available to Indonesian nationals, while a PT PMA Bali can be established by people and companies from other countries that want to invest in Bali.
Investing in Bali with a PT PMA
Bali’s popularity as a tourist location is growing all the time, which makes investment in Bali appealing. Most foreigners use a PT PMA company to invest in Indonesian real estate, such as Bali villas, as they cannot individually buy a property through the Hak Milik (HM) land title, considered the highest type of property ownership in Bali. For this reason, a PT PMA is seen as an investment company in Indonesia.
In Bali, PT PMAs can buy both freehold and leasehold properties. However, to buy freehold land or property, the land title should first be converted to Hak Guna Bangunan (HGB), as PT PMAs cannot hold Hak Milik land titles. Freehold gives complete ownership over the real estate, although buying leasehold property is often considered to be an easier option. Another option is to buy land through a leasehold agreement and then build a villa on the leased land. In that case, a HGB title is needed for only the constructed building.
Requirements to set up a PT PMA in Bali
These are the four most important requirements to establish a PT PMA Bali:
- Dealing with the BKPM: The Indonesia Investment Coordinating Board (BKPM) promotes and regulates international investment in Bali. Business licenses, investment plans, business goals, financial predictions, and investment structures must be included in the submitted plan to the BKPM.
- Minimum paid-up capital: The PT PMA minimum capital to invest varies by industry and size, but for real estate investment, the minimum paid-up capital to establish the PT PMA Bali is 25% of IDR 10 billion ($650,000), so IDR 2.5 billion ($162,500).
- Board of directors and shareholders: Two shareholders (a President Director and a President Commissioner) are needed to establish the PT PMA Bali. One shareholder must be foreign, and the Director must live in Indonesia and manage daily activities. Foreign workers in Indonesia must get a tax number (NPWP), a work permit (IMTA), and a work visa (KITAS).
- Company address: Business addresses are required. Use your home address for business or rent a virtual office space from an agency.
8-step guide to establish a PT PMA in Bali
PT PMA in Bali is an excellent way for foreigners to invest in Bali. Starting a company in Bali can be challenging, particularly for foreign investors who might be unfamiliar with Indonesian real estate laws. To overcome these difficulties, opting for the assistance of a local agency for setting up a PT PMA in Bali is a smart solution. Establishing a PT PMA in Bali typically costs around IDR 20 million ($1,300) to IDR 28 million ($1,820), and takes around 2 to 4 weeks.
Foreigners can establish a PT PMA in Bali by following these eight steps:
- Approval of the company name: Pick a company name that’s both catchy and unique. It needs to tick all the boxes of the regulatory requirements.
- Deed of Incorporation: This official document should include the Article of Association and must be given the green light by a public notary. Picture this as the birth certificate of your company. It’ll take about two days to get this sorted.
- Legal entity approval: The Ministry of Law and Human Rights must approve your business as a legitimate entity. This happens once the notary has put the Deed of Incorporation through. Think of this as getting an official stamp, which takes around ten days.
- Sorting out taxes: Register for a Tax ID (NPWP) and get a Taxable Entrepreneur Confirmation (PKP) from the tax office. These are like your business’s Social Security Number, essential for opening a bank account, handling taxes, and getting business licenses. You’re looking at about three days here.
- Getting the domicile letter: This letter from the local district shows where your business is located, like a business address proof. It takes about three days to get this letter.
- Company Registration Certificate (TDP): This certificate is like a medal that proves your company is officially established. Brace yourself for about 14 days to get this in your hands.
- NIB application: After registration, your company will receive the NIB, which stands for Business Identification Number, along with a Business License and Location Permit.
- Applying for additional business licenses in Indonesia: Depending on what your business does, you might need to apply for more Indonesian business licenses to be fully operational.
Your PT PMA in Bali is set after following these steps. The process of PT PMA establishment in Bali can take around ten weeks. Armed with your PT PMA company, you can start investing in Bali and contribute to Indonesia’s foreign investment landscape.
PT PMA freehold and PT PMA minimum capital
It’s important to remember that setting up a company in Indonesia requires compliance with specific capital requirements. Knowing the PT PMA minimum capital is critical in streamlining the investment process. According to Perka BPKM No4 Year 2021, foreign investors need to have the intention to invest at least IDR 10 billion ($650,000) in Bali. The paid-up capital is set at 25% of the investment threshold.
Limitations of a PT PMA in Bali
Indonesian law limits the maximum foreign ownership allowed, and these restrictions vary depending on the type of business. Certain business categories also require specific percentage rates, such as 10% open and 90% closed investments. To determine the restrictions that apply to your chosen business classification, consult the Negative Investment List (DNI), which outlines the restricted business projects.
Invest in real estate with KITAS Bali
One of the keys to a successful investment in Bali is understanding how the Indonesian immigration process works. KITAS Bali, the temporary stay permit, is a necessary visa for foreign investors. Foreigners can obtain a KITAS with their PT PMA as the sponsor.
Investor KITAS Bali is a specific visa to invest in Bali, facilitating the stay and business operations of investors on the island. Besides the Investor KITAS Bali, other options like Entertainment KITAS Bali and Retirement Visa Bali serve different purposes.
Getting an Investor KITAS in Bali
For those wondering, ‘What is a KITAS in Bali?’ or ‘How to get a KITAS in Bali?’ – it’s one of the Bali visas that allows you to stay in Bali for a limited time. The costs of KITAS vary depending on the location and agency you use. Generally, the Investor KITAS visa Bali cost between IDR 10 million ($650) and IDR 15 million ($975). There may be additional costs when applying for the KITAS Investor visa, such as legal fees and taxes.
Struggling with setting up a PT PMA in Bali? We’re here to help!
Establishing a PT PMA in Bali involves navigating legal requirements, preparing documents, and ensuring compliance with Indonesian regulations. Our team of professionals can guide you through every step of the process, from company registration to operating your business successfully. Whether you’re starting from scratch or need help with specific steps, we’re here to make the process smooth and efficient. Leave your details below, and we’ll reach out to assist you, or email us directly at [email protected] for personalized support.
Frequently Asked Questions (FAQs)
Can foreigners buy property in Bali?
Foreigners can buy leasehold property in Bali or by setting up an investment company in Indonesia, such as a PT PMA, which allows for property ownership under specific conditions.
How much does a PT PMA cost in Bali?
To open a company in Indonesia, specifically a PT PMA in Bali, you would generally need to budget between IDR 20 million ($1,300) to IDR 28 million ($1,820) for the company establishment. Additionally, if you plan to open a company in Indonesia and reside in Bali, figuring out how to get a KITAS in Bali is crucial and should be factored into your initial costs.
What is a KITAS in Bali?
A KITAS in Bali is a temporary stay permit that allows foreigners to reside in Indonesia for a certain period. For investors, there’s a specific Investor KITAS Bali, which is a type of KITAS created for foreign investors. So, regarding Bali visas, the Investor KITAS is a popular choice for those putting money into business ventures.
How to get a KITAS in Bali?
To get a KITAS in Bali, you must apply through the Indonesian Embassy or Consulate in your home country or a visa agent in Indonesia. You’ll need a sponsor, relevant documents, and the applicable fees. The KITAS is a permit for long-term stay, so ensure your documents are in order.
What does a KITAS visa in Bali cost?
The KITAS visa Bali cost varies depending on the type (such as work, retirement, family, or Investor KITAS). Generally, you can expect it to range from IDR 10 million ($650) to IDR 15 million ($975).
What is a PMA?
PMA in English stands for Foreign Investment Limited Company. It’s a legal entity in Indonesia that allows foreign investors to run a business. A PMA is essential for investment in Indonesia as it lets foreigners hold shares and participate actively in the company.
What is a PMA business?
A PMA business stands for Perseroan Terbatas Penanaman Modal Asing, and it’s essentially a limited liability company meant for foreign investment in Indonesia. When setting up a PMA business, you might need to work with the immigration office in Bali for necessary permits and visas.
Can PMA own property in Bali?
A PT PMA, a foreign-owned investment company in Indonesia, can own property in Bali under the Hak Guna Bangunan title (Right to Build). This allows the company to hold the property for an extended period and is renewable for up to 80 years.
4 Responses
Hi Matt,
interested in a PMA in Bali. Quick initial question; you menitonned a minimum paid-up capital to establish the PT PMA Bali is 25% of IDR 10 billion ($650,000), so IDR 2.5 billion ($162,500). Can these funds be used to buy a freehold/build a villa/promote or are they stuck in the bank account and fresh money is needed to build?
Hi Thierry,
Yes, the initial paid-up capital of IDR 2.5 billion ($162,500) can be used for business purposes, including buying a freehold (if through a PT PMA), building a villa, or promoting your business. The capital doesn’t need to sit unused in the bank—once the PT PMA is set up and the funds are in place, they can be used for operating expenses, investments, or property purchases. Let me know if you have more questions or need help getting started with the PT PMA setup!
Thanks for the info Matt, quick follow up question;
When you mention that there is an intention to invest 10bn with 2.5 upfront, what are the requirements here? Does that mean if we have the upfront amount we can use that as a downpayment and a bank will be able to lend the rest of the money as long as we buy/build real estate?
Hello Adam! In Indonesia, particularly Bali, the minimum IDR 10 billion capital investment requirement for a PT PMA is based on an “intention to invest” rather than an immediate upfront payment of the full amount. While IDR 2.5 billion is required upfront, this can be used towards company expenses, including real estate development. However, getting financing from an Indonesian bank can be challenging for foreign-owned entities, so it’s advisable to check with local banks about their requirements for property loans.