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Frequently Asked Questions

How A PMA company can be eligible to conduct import activities? What licenses and procedures are necessary while engaging in import-related activities?

A PMA company in Indonesia must obtain an NIB, which also functions as:

• Importer Identification Number (Angka Pengenal Impor or API)
  Producer Importer Identification Number (Angka Pengenal Impor Produsen or API-P), which is required for the import of machinery and equipment, goods, and materials used in production.
  General Importer Identification Number (Angka Pengenal Impor Umum or API-U), which is required for the import of specific goods for trading purposes, is grouped under one section in the Customs Classification System.
• Customs Identification Number (Nomor Identitas Kepabeanan or NIK), It functions as an identifying document for the applicable Customs and Excise authorities during the customs clearance process.

Some goods may face limitations or restrictions on importation in Indonesia, potentially requiring additional approval from the Ministry of Trade. Recommendations from technical ministries like Industry or Agriculture may influence these approvals.

How is the process of liquidating a PMA company in Indonesia, and how long does it take?

The procedures for (voluntarily) liquidation typically involve the following steps:

• Conduct a general shareholder meeting to approve the liquidation and the liquidator’s nomination
• Notify the Ministry of Law and Human Rights as well as the creditors of the liquidation and the distribution plan for the assets by newspaper notice
• All business licenses and tax numbers should be canceled or revoked; the tax office will conduct a tax audit to revoke the tax number
• Make sure creditors are paid and that any liquidation funds are distributed to shareholders (if any)
• Conduct a general meeting of shareholders to approve the liquidator’s discharge and acquittal
• Notify the Ministry of Law and Human Rights of the liquidation’s outcome. After receiving the notification, the Ministry of Law and Human Rights will deregister the company’s status as a legal entity and remove its name from the Company Registry
• Release the liquidation’s outcome in a newspaper

Completing the liquidation process can take around two years.

How to conduct a company registration in Indonesia for a foreigner?

A foreign-owned company (PT PMA) in Indonesia is a popular choice among foreigners to set up a business. Foreign investors must check Indonesia’s Positive Investment List to see which businesses are open to foreign direct investment.

Are there investment facilities provided for foreign investors in Indonesia?

A newly established PMA company in Indonesia is typically provided with import facilities, tax holidays, tax allowances, or investment allowances.

• Import facilities
  Investors in Indonesia, particularly in manufacturing, may benefit from import tax exemptions for capital goods and raw materials through the Master List Facility. The imported goods must meet specific criteria, such as not being produced locally or not meeting industry demand despite local production.
• Tax holiday
  The government offers CIT reductions of 50% or 100% for 5–20 years for listed pioneer industries, based on investment value. After this period, a CIT reduction of 25% or 50% applies for two fiscal years. Non-listed sectors can also apply by meeting criteria demonstrating pioneer industry status.

Pioneer industries are industries that have a wide range of connections, provide additional value and high externalities, introduce new technologies, and have strategic value for the national economy.

• Tax allowance
  For companies in certain designated areas or regions, the government may provide the following tax concessions:
  Net income reduction up to 30% of the amount invested, prorated at 5% annually for six years, on condition that the assets invested are retained for the same duration.
  Accelerated depreciation and/or amortisation deductions
  An extension of tax losses carried forward for a maximum of ten years
  A 10% (or lower if treaty relief is available) withholding tax rate on dividends paid to non-residents
  The applicant eligible has to meet high-level-criteria for the above tax facilities:
  High investment value or for export purposes
  High manpower absorption
  High level of local content
• Investment allowance
  The government offers a reduction in net income of up to 60% of the investment, distributed at 5% annually over six years of commercial production, contingent upon the retention of invested assets for the same duration. To qualify, applicants must meet business line eligibility criteria and employ a minimum of 300 Indonesian workers in the project.
• Super deduction
  This facility could be granted to certain businesses, such as:
  60% reduction in net income of the amount of tangible fixed assets invested for labor-intensive industries, distributed throughout a certain time frame.
  Up to 200% reduction in the gross income of the amount spent for human resources development in certain competency activities.
  Up to 300% reduction in gross income of the amount spent for certain R&D activities in Indonesia.