What is the difference between PT and CV?

Frequently Asked Questions

If investors intend to conduct business in Indonesia, what kind of organization must they establish?

Within the scope of foreign direct investment in Indonesia, foreign investors can typically do business in two ways:

• Set up a PMA (Perusahaan Modal Asing)

PMA is a local subsidiary in the form of a limited liability corporation for foreign investment reasons

• Set up a RO (Representative Office)

According to Law No. 25/2007 on Investment, foreign investors are required to establish a PMA company in order to make direct investments and conduct commercial and business activities in Indonesia. A PMA firm in Indonesia is a legally recognized business entity that can engage in various commercial and business operations as long as it complies with the current laws and regulations. As for RO, its purposes include conducting market feasibility studies and liaison activities.

Is there limited responsibility for shareholders in a PMA company?

In a PMA Company in Indonesia, shareholders typically have limited liability, meaning they’re not personally liable for agreements or losses beyond their shareholding, except in certain circumstances. Liability may extend if the company isn’t properly established or if shareholders exploit the company in bad faith, engage in unlawful acts, or deplete company assets to the detriment of creditors.

Can investors own shares with preferential rights?

Under Indonesian Company Law, shareholders can hold shares with various preferential rights, such as voting rights, nomination rights for board members, priority dividend or liquidation proceeds, and options for conversion or withdrawal after a set period.

Will the government check the minimum paid-up capital for doing business in Indonesia?

The government will check the minimum paid-up capital, IDR 10,000,000,000. Fulfilling this requirement is a must.