How to Meet PT PMA Minimum Capital Requirements in Indonesia

The required minimum capital investment in Indonesia to set up a legal entity might seem straightforward, but it’s often more complex. While it’s relatively simple for locals to establish a locally owned company (PT), the process for foreign investors setting up a PT PMA (Foreign-Owned Company) involves more stringent capital and licensing requirements.

Minimum capital is closely tied to the type of business license you apply for, and new 2025 regulations have refined how these requirements are applied.

What is Paid-Up Capital in Indonesia

Paid-up capital refers to the actual funds injected into a company by shareholders. These funds are exchanged for shares and can be used to finance initial and daily operations, such as payroll, office rent, and debt payments.

Under the latest Minister of Investment Regulation No. 5 of 2025, the minimum paid-up capital for a PT PMA is IDR 2.5 billion, which must be deposited at the time of incorporation. This marks a shift from previous practice, where minimum paid-up and total investment were often listed as IDR 10 billion.

What are the Minimum Capital Investment Requirements for a PT PMA

According to the Indonesian Investment Coordinating Board (BKPM) and the updated Government Regulation (GR) No. 28 of 2025 on Risk-Based Business Licensing, the minimum total investment required to establish a PT PMA is more than IDR 10 billion per business activity (5-digit KBLI) and per project location, excluding land and building costs.

However, the minimum paid-up capital that must be shown during incorporation is IDR 2.5 billion. The remaining investment is realized progressively based on the company’s approved investment plan.

Type	Requirement (2025)	Notes
Total Investment Plan	IDR 10 billion	Excluding land and building costs
Paid-Up Capital at Incorporation	Incorporation ≥ IDR 2.5 billion	Minimum injection required at establishment
Authorized Capital	Typically IDR 10 billion	Commonly aligned with investment plan

These requirements are designed to attract large-scale foreign investors while still protecting local MSMEs.

Depending on industry-specific laws, certain sectors—especially financial services, natural resources, and manufacturing—may require higher capital thresholds.

READ MORE:

• How to Register a Foreign-Owned Company as PT PMA in Indonesia
• A Complete Guide for Registering a Company as Foreigners
• How can Singaporean Entrepreneurs Set Up A PT PMA in Indonesia?

OSS Risk-Based Licensing in 2025

With the implementation of Government Regulation No. 28 of 2025, the Online Single Submission (OSS) system now follows a fully risk-based licensing framework (OSS RBA).

This means:

• The NIB (Business Identification Number) is now the core business license.
• Additional sectoral or operational licenses (such as environmental, building, or trading permits) are only required based on your business activity’s risk level and KBLI classification.
• Traditional “temporary” or “permanent” licenses are no longer issued, except for a few strategic sectors (e.g., energy, finance, and property).

Minimum Capital Investment Requirements: The Exception

While most industries follow the > IDR 10 billion total investment rule, there are exceptions:

• Trading companies (wholesale, retail, and import-export) often structure their authorized capital at IDR 10 billion but inject only IDR 2.5 billion initially.
• The remaining investment is realized over time through equipment purchase, staffing, and expansion activities.

This flexibility allows investors to start operations faster while complying with Indonesian regulations.

What Type of Presence do Investors Need to Set Up a Business in Indonesia?

Investors looking to engage in business in Indonesia through foreign direct investment typically have two options:

• Establish a local subsidiary as a limited liability company, a PT PMA company (Perusahaan Penanaman Modal Asing), specifically for foreign investment purposes.
• Set up a representative office (RO). According to Law No. 25 of 2007 on Investment (the “Indonesian Investment Law”), foreign investors intending to engage directly in commercial or business activities, such as providing services or selling goods in Indonesia, must establish a PMA company. 

A PMA company is a fully registered legal entity that can engage in various business activities as Indonesian regulations allow. Alternatively, investors can establish an RO, a licensed office set up by a foreign company in Indonesia. 

An RO’s activities are limited. They typically involve market research and acting as liaisons to connect its overseas headquarters with contacts in Indonesia. ROs are generally restricted from engaging in direct business activities, such as signing contracts, issuing invoices, or receiving payments.

How to Invest in Indonesia

Foreign investors seeking investment opportunities in Indonesia can consider the following phases of investment: 

What are the Factors Affecting Foreign Direct Investment (FDI)?

FDI can boost a country’s economic development by creating jobs, transferring technology, and increasing business competitiveness. Factors affecting FDI include politics, economics, and culture, both internally and externally.

Political stability, security, legal certainty, growth, inflation, interest rates, education levels, labor, culture, global economic conditions, and government policies can all impact FDI in Indonesia.

1. Political and Security Stability

Political and security stability is an important factor that can affect FDI. Foreign investors will be more interested in investing their capital in a country with good political and security stability.

2. Legal Certainty

Legal certainty is an important factor that can affect FDI. Foreign investors will be more interested in investing their capital in a country with good legal certainty.

3. Economic Growth

High economic growth is a factor that can attract foreign investors. Foreign investors will be more interested in investing their capital in a country with high economic growth.

4. Inflation Rate

A low inflation rate is a factor that can attract foreign investors. Foreign investors will be more interested in investing their capital in a country with a low inflation rate.

5. Interest Rate

A low interest rate is a factor that can attract foreign investors. Foreign investors will be more interested in investing their capital in a country with a low interest rate.

6. Education Level

A high education level is a factor that can attract foreign investors. Foreign investors will be more interested in investing their capital in a highly educated country.

7. Skilled Labor

Skilled labor is a factor that can attract foreign investors. Foreign investors will be more interested in investing their capital in a country with skilled labor.

8. Open Culture

An open culture is a factor that can attract foreign investors. Foreign investors will be more interested in investing their capital in a country with an open culture.

What is the Legal Basis for Foreign Direct Investment in Indonesia?

Law Number 25 of 2007 on Investment is the legal basis for FDI in Indonesia. This law regulates various matters related to FDI, including:

• The definition of FDI
• Types of FDI
• FDI procedures
• Investor rights and obligations
• Government policies related to FDI

Law Number 25 of 2007 on Investment has undergone several changes, namely:

• Government Regulation Number 60 of 2007 on the Implementation of Law Number 25 of 2007 on Investment
• Government Regulation Number 91 of 2015 on the Second Amendment to Government Regulation Number 60 of 2007 on the Implementation of Law Number 25 of 2007 on Investment
• Government Regulation Number 24 of 2022 on the Third Amendment to Government Regulation Number 60 of 2007 on the Implementation of Law Number 25 of 2007 on Investment
• Government Regulation No. 28 of 2025 on the Implementation of Risk-Based Business Licensing

The Indonesian government is continuously working to improve the investment climate in Indonesia, including FDI. This is done in various ways, including:

• Improving political and security stability
• Strengthening legal certainty
• Increasing economic growth
• Reducing inflation
• Reducing interest rates
• Improving the quality of education and labor
• Creating an open culture

These efforts are expected to attract more foreign investors to Indonesia.

Capital to Start a Local Company PT

For local companies called PT, the amount of capital investments influences the company’s size and whether it can employ foreign workers.

According to the latest changes laid out in the Job Creation Law, the classification of Local PT in Indonesia based on paid-up capital is as follows:

• A micro-enterprise: Up to IDR 1 billion
• A small enterprise: > IDR 1 – 5 billion
• A medium enterprise: > IDR 5 – 10 billion
• A large enterprise: more than IDR 10 billion

Due to the high capital investment requirements, only large and medium-sized enterprises allow foreign employment.

Forms of Injection of Minimum Paid-Up Capital

The minimum paid-up capital can be injected as cash into the company’s bank account or other assets. If the paid-up capital is put in with help instead of cash, the value of these assets is determined based on the current market prices.

However, the value of buildings and land is excluded from the capital unless it is a company’s primary business activity in the field.

The details of the asset payment must also be recorded in the Deed of Establishment (DOE), and the deadline for submission of the capital statement letter is 60 (sixty) days after the DOE signing. After that, the completion can be done online.

Interested in Setting up a Company in Indonesia?

InCorp Indonesia has over a decade of experience in market entry, specializing in assisting businesses in establishing their presence in Indonesia. Our team of experts ensures a seamless company registration and licensing process, guiding you to set up your operations in the country successfully.

The legal representatives from InCorp Indonesia specialize in corporate law and thus will walk you through the formation process of your company in Indonesia and the minimum capital investment.

Contact InCorp now, and we will help you with a seamless company incorporation in Indonesia. Fill out the form below to discuss your matter with our experts.