Establish a PT PMA in Bali in 8 steps

Investing in Bali real estate can be done in several ways. Investing through a PT PMA in Bali is the most popular option for investment in Indonesia, as the PT PMA offers the opportunity to invest foreign capital and own freehold or leasehold property. Company establishment in Bali can be challenging but easy to perform if you understand the legal and administrative requirements. This eight-step guide explains how to establish a PT PMA in Bali and obtain KITAS Bali to reside on the island.

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.

PT PMA companies can buy both freehold and leasehold properties. One popular way is to obtain land through a leasehold agreement and build a villa on top of the land to generate income through villa rentals in Bali. To build a villa on leased land, the PT PMA needs to obtain several licenses, such as Hak Guna Bangunan (HGB), Building Approval (PBG), and possibly Hak Pakai (HP).

PT PMA freehold and PT PMA minimum capital

Buying PT PMA freehold property is an excellent choice for investing in Bali real estate, as the PT PMA allows foreign investments in Indonesia. But it’s important to remember that setting up a company in Indonesia, especially a PT PMA, 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 ($630,000) 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. 

Requirements to set up a PT PMA in Bali

These are the four most important requirements to establish a PT PMA Bali:

1. 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.
2. 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 ($630,000), so IDR 2.5 billion ($157,500).
3. 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).
4. Company address: Business addresses are required. Use your home address for business or rent a virtual office space from an agency.

8 steps 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 25 million ($1,575) to IDR 35 million ($2,205).

Foreigners can establish a PT PMA in Bali by following these eight steps:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. NIB application: After registration, your company will receive the NIB, which stands for Business Identification Number, along with a Business License and Location Permit.
8. 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.

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 ($630) and IDR 15 million ($945). There may be additional costs when applying for the KITAS Investor visa, such as legal fees and taxes.

Conclusion

Setting up a Bali PT PMA company requires careful planning. It involves complying with legal requirements and regulations, such as registering with the BKPM, acquiring necessary permits and licenses, and meeting minimum capital requirements. It requires a lot of paperwork, but the benefits of complying with the legal procedures and having full legal ownership of the business far outweigh the challenges.

It is wise to seek assistance from a professional when establishing a PT PMA in Bali, such as a law firm, business consulting firm, or real estate agency. These professionals can also help with due diligence and finding PT PMA freehold property in Bali.

Frequently Asked Questions (FAQs)