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

Frequently Asked Questions

What is the Indonesian employment status in PMA company?

In Indonesia, employment arrangements are categorized into temporary employment agreements (PKWT) and permanent employment agreements (PKWTT). Temporary contracts are for short-term, seasonal, or experimental work, while permanent contracts are for continuous employment.

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

Investors considering investments in Indonesia should assess existing International Investment Agreements between Indonesia and other countries. Having a business presence in countries with such agreements may offer incentives like stronger investment protection and higher foreign shareholding in Indonesia.

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.

Is having audited accounts mandatory?

Audited financial statements are required for:

• Entities gathering funds from the public (e.g., banks, insurance companies)
• Entities issuing debt instruments
• Publicly listed companies
• State-owned enterprises
• Companies with assets and/or turnover exceeding IDR 50 billion
• Entities mandated by legislation