Establishment of PT PMA/PT PMDN
Business Entities in Indonesia have several forms, including Limited Liability Company for Domestic Investment (PT PMDN), Limited Liability Company for Foreign Investment (PT PMA), Commanditaire Vennootschap (CV) and Trading Business/Usaha Dagang (UD)
Meaning of PT PMDN
Limited Liability Company is a legal entity established under an agreement, conducting business activities with share capital which is wholly divided into shares, and fulfilling the requirements stipulated in this Law and its implementing regulations. So it can be concluded that a Limited Liability Company is a form of business that is a legal entity and is jointly established by several people, with a certain capital divided into shares, whose members can own one or more shares and have limited liability up to the number of shares they own.
Terms of Establishment of PT PMDN
In the process of establishing a PT, there are a number of requirements that must be met:
- Founders of at least 2 or more people and a notarial deed in Indonesian.
- The minimum management structure consists of one (1) Director and one (1) Commissioner.
- For local PT (PMDN) the name of the PT consists of 3 syllables and may not contain foreign words.
- The composition of the shareholders must subscribe to the shares.
- PT obtains legal entity status after registering with the Ministry of Law and Human Rights and obtaining proof of registration (SK).
- Husband and wife who establish PT together. However, if you do not have a Marriage Agreement, you must include one person as a shareholder.
- The PT is required to have authorized capital in the amount of the Company's Founding Agreement.
Documents Required for PT PMDN
Next, you have to prepare a series of documents. Following are the documents in the Establishment of PT:
- Photocopy of ID card of shareholders & company management
- Photocopy of personal NPWP of all company management.
- Stamped statement of the company's domicile address.
- Statement letter for paid-up capital with stamp duty.
- Statement of Business Activities (KBLI Number) carried out.
- Stamped power when authorize
Meaning of Foreign Investment (PMA)
Foreign Investment is only includes foreign direct capital which is carried out according to or based on the provisions of the law and is used to run a business in Indonesia. The elements of Foreign Investment in the above definition can be include:
- It is carried out directly, meaning that the investor directly bears all the risks that will be experienced from the investment.
- According to the law, it means that foreign capital invested in Indonesia by foreign investors must be based on the substance, procedures, and conditions that have been determined in the prevailing laws and regulations and are stipulated by the Indonesian government.
- Used to run a company in Indonesia, meaning that capital invested by foreign investors used to run a company in Indonesia must have the status of a legal entity
Investor Rights
- Transferring the assets they own to the party they want.
- Transfer and repatriate in foreign currency, among others to:
a) Capital
b) Profits, bank interest, dividends and other income.
c) Funds needed for the purchase of raw and auxiliary materials, semi-finished or finished goods and the replacement of capital goods in order to protect the viability of investment.
d) Additional funds required for investment financing.
e) Funds for loan repayment. f) Royalties or fees to be paid.
g) Income from individuals from foreign nationals who work in investment companies.
h) Proceeds from the sale or liquidation of investment.
i) Compensation for losses.
j) Compensation for expropriation.
k) Payments made for technical assistance, fees payable for technical and management services as well as payments made under project contracts as well as payments for intellectual property rights.
Investment Obligations
- Applying the principles of good corporate governance.
- Implement corporate social responsibility.
- Prepare reports on investment activities and submit them to the Investment Coordinating Board.
- Respect the cultural traditions of the community around the location of investment business activities.
- Comply with all statutory provisions
FAQ's
Most question asked on this services:
The minimum capital requirements for PT PMA vary based on the business sector and are usually higher for foreign investment compared to PT PMDN. PT PMDN's capital requirements depend on the business sector and are generally lower as they cater to domestic investment.
The duration for establishing a PT PMA/PMDN can vary based on multiple factors, including the completeness of documents, compliance with regulations, and the efficiency of processing. On average, it can take several weeks to a few months to complete all necessary procedures.
PT PMA allows foreign investors to access various sectors in Indonesia and benefit from incentives offered to foreign investment. PT PMDN encourages domestic investment, providing opportunities to operate in different sectors of the Indonesian economy, supporting local businesses and economic growth.