How do investors choose a holding jurisdiction for a PMA firm in Indonesia?

Frequently Asked Questions

Can Investors 100% own a PT PMA Company?

According to Presidential Regulation No. 10/2021 and the amended version, all businesses are open for domestic and foreign investment with these limitations and classifications:

• Eight businesses are closed to foreign investment and may be operated by the central government.
• Designated business sectors or joint ventures with cooperatives (koperasi) and micro, small, and medium enterprises
• Open businesses are subject to specific conditions, such as those that are exclusively available to 100% local investors, those with restricted foreign shareholding, and investments requiring special licenses

Certain sectors are closed to foreign investment, including narcotics cultivation, gambling, and environmental conservation activities.

Can you have a nominee arrangement when setting up PMA?

A nominee arrangement is an arrangement that uses another person’s name as a subject. In Indonesia, it is prohibited. This restriction aims to prevent situations where a company is owned by one party but beneficially owned by another. According to the law, any nominee agreement between a local party and a foreign investor is deemed null and void.

Can a PMA company keep non-Rupiah bookkeeping and use a language other than Indonesian?

For tax purposes in Indonesia, companies must maintain their books in Rupiah, using the Indonesian language, and store them within the country. Exceptions for using USD and English in bookkeeping require prior notification to the authorities and any use of languages other than Indonesian needs approval from the Ministry of Finance.

Can a foreigner become a director or commissioner of a company in Indonesia?

Yes, in a foreign-owned (PT PMA) company, a foreigner can be a director or a commissioner