Home Blog 5 Things to Know about Setting Up A PT PMA in Semarang Business Setup | Company Registration | Indonesia | Semarang 5 Things to Know about Setting Up A PT PMA in Semarang InCorp Editorial Team 17 December 2024 5 minutes reading time Table of Contents What is PT PMA? Benefits of PT PMA Establishment in Semarang Requirements for Setting up a PT PMA in Semarang How to Set up a PT PMA in Semarang Company Registration in Semarang with Cekindo Do you have an outstanding business plan and want to start a company in Semarang? No wonder, many foreign investors are attracted to Semarang because it is a great city in Indonesia with abundant resources, strategic location, and bountiful workforce. To start your business, you need to know that the company registration process is among the early steps you need to take in Semarang. A popular option among foreign entrepreneurs is setting up a PT PMA in Semarang. However, it may be a daunting prospect if you’re not familiar with the local laws and regulations. But, if you get it right, it can be an enjoyable and lucrative one. This article elaborates the 5 things you need to know about setting up PT PMA in Semarang, read before you make the dive. What is PT PMA? PT PMA stands for Perseroan Terbatas Penanaman Modal Asing in Indonesian language. All foreign-owned companies in Semarang and entire Indonesia are considered as PT PMA. It is a limited liability company set up with the injection of foreign capital. No matter how many shares you own as a foreigner in a business – it can be from 1% to 100% — the business is deemed a foreign-owned company under the Indonesian Company Law. Please do keep in mind that the percentage of foreign ownership depends greatly on the business classification under the Negative Investment List (NIL). While some business sectors are 100% open to foreign ownership in Semarang, some of them are partially closed or fully closed to foreign investments. Foreigners are advised to keep themselves updated on the NIL as it is often revised, usually once every three years. Benefits of PT PMA Establishment in Semarang The incorporation process of a PT PMA is more demanding than a local company. However, the many benefits that a PT PMA provides outweigh its more complex procedure of establishment. The most alluring benefits are: PT PMA can Employ Foreigners A PT PMA in Semarang can sponsor work permits and working ITAS (stay visas) for their foreign employees. In addition, a foreign company in Semarang is permitted to provide business visa sponsorship for their business partners for a short stay in Semarang or Indonesia. Apply for an Indonesian business visa online to avoid a complicated process. Foreigners can Have Full International Ownership Recently, the government of Indonesia has made foreign ownership easier as compared to years ago. Therefore, it is now more common for foreign investors in Semarang to own an international business with 100% ownership without having to partner with local businesses. Requirements for Setting up a PT PMA in Semarang Here are the important requirements that foreign business owners need to fulfill before they can set up a PT PMA in Semarang: Paid-up Capital IDR 10 billion is the minimum paid-up capital to set up a PT PMA in Semarang. Foreigners can either sign a letter of capital statement, indicating that they have enough money for the capital upon the incorporation or transfer the money to the company bank account. Location of Business Foreigners must provide a business address before submitting the company registration application. Shareholders, Commissioners, and Directors of PT PMA A PT PMA in Semarang requires a minimum of two shareholders, one commissioner, and one director. How to Set up a PT PMA in Semarang The new regulation No. 24/2018 that has taken effect since June 2018 has simplified and sped up the incorporation process of a PT PMA. Below is a summary of the PT PMA setup process in Semarang: Obtain Deed of Establishment in accordance with the NIL. Acquire a domicile letter and a tax identification number (NPWP). Register your legal entity via the Online Single Submission (OSS) System, and then get the business identification number (NIB) to operate. Apply for additional licenses based on your business sector or business activities. For instance, operational license and commercial license. The entire registration and establishment process, including all procedures, takes 4 to 6 weeks. No. Procedure Duration (working days) 1 Approval of company name at the Ministry of Law and Human Rights 1 2 Preparation of Article of Association by Notary 3 3 Approval of Deed of Establishment at the Ministry of Law and Human Rights 3 4 Obtaining Taxpayer Registration Number 2 5 Obtaining Certificate of Domicile from the local district office 10 6 Approval of Business Registration Number (NIB), Business Permit, Commercial/Operational Permit, Location Permit, Environmental Permit, and BPJS through the Indonesian Online Single Submission (OSS) System 2 Company Registration in Semarang with Cekindo Cekindo is a professional business consulting firm that assists investors in establishing their business successfully across Indonesia including Semarang, Jakarta, Bali, and many more. With our unparalleled knowledge and expertise, let us guide you through the company registration process in Semarang. Get in touch with us today by filling in the form below or visit us directly in our office. Our other offices are also available in Jakarta and Bali. Read Full Bio Verified by Ales Cina Consulting Manager at InCorp Indonesia Aleš manages solution delivery at InCorp Indonesia, optimizing incorporation processes and client relationships. His experience in internal auditing, retail, and sales offers valuable global insights. Aleš, with a degree in Economics and Finance from the Czech Republic, helps clients navigate cross-border business challenges, focusing on cultural and legal insights. Frequently Asked Questions 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. 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. What is the minimum shareholder requirement to incorporate a PT? The minimum number of shareholders to incorporate a PT is two 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 Get in touch with us. 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