Stages of Setting Up a PMA Company in Indonesia: Registration, Licenses, and Ministry of Manpower Approvals
How to Establish a PMA Company in Indonesia: Registration, Licenses, and Employment Permits
Setting up a PMA (Penanaman Modal Asing) — a company with foreign capital in Indonesia — requires compliance with clearly defined legal procedures. This type of business entity allows foreign investors to officially operate commercial activities in the country. This article walks you through the key steps to launch a PMA company, from registration to securing the necessary licenses and employment permits.
1. Registering a PMA Company in Indonesia
Registering a foreign investment company begins with preparing the deed of establishment and obtaining legal entity status. It’s important to comply with local requirements regarding the company name, capital structure, and business address.
Choosing a Company Name
When selecting a name, the following rules apply:
- The name must consist of at least three coherent words.
- It must be unique within the AHU system (Ministry of Law and Human Rights).
- Misleading or unethical terminology is prohibited.
Preparation of the Deed of Establishment
The company is incorporated through a notarial deed (Akta Pendirian) written in Indonesian. Minimum requirements for management structure and founders include:
- At least one Director and one Commissioner.
- A minimum of two shareholders (individuals or legal entities).
- The deed must be signed and notarized by an Indonesian notary.
Registered Business Address
The company address must be located in a commercially zoned area in accordance with local zoning regulations. Residential addresses are only permitted for certain microbusinesses registered through the OSS system.
Minimum Investment Requirements
According to current regulations from BKPM (Indonesia Investment Coordinating Board), opening a PMA company requires:
- A minimum investment plan of IDR 10 billion (~USD 650,000), including working capital.
- A minimum paid-up capital of IDR 2.5 billion.
These amounts also influence eligibility to hire foreign employees and access certain licenses.
2. Obtaining Business Licenses via the OSS System
After registering the company, it must obtain a NIB and other sector-specific permits, including environmental and customs licenses (if applicable).
NIB — Nomor Induk Berusaha (Business Identification Number)
The NIB is issued online via OSS (Online Single Submission) and serves multiple functions:
- Main business registration number — comparable to a Tax ID and BPJS employer number.
- Import-export license for international trade.
- Registration with customs and national statistics bureau.
Without an NIB, the company cannot open a corporate bank account, sign contracts, or hire employees.
Environmental Permits
Whether an environmental license is required depends on the business’s environmental impact. The permits are issued by the Ministry of Environment and Forestry (KLHK).
Three main types of documents exist:
| Permit Type | Required For |
|---|---|
| SPPL (Surat Pernyataan Pengelolaan Lingkungan) | Microbusinesses with minimal or zero environmental impact |
| UKL/UPL (Environmental Management & Monitoring) | Moderate impact (e.g., offices, cafes, hotels) |
| AMDAL (Environmental Impact Assessment) | High-impact sectors, major construction projects, and factories |
Each case requires a tailored environmental assessment and evaluation of impact levels.
3. Obtaining Permits from the Ministry of Manpower
To legally hire employees, including foreign professionals, companies must register and obtain approvals from the Ministry of Manpower (Kemnaker).
The correct terminology is employment permit processing, not “recognition by the ministry.”
1. Preparation
The company must:
- Register with BPJS Ketenagakerjaan (national social security agency).
- Provide an organizational chart and details of workforce numbers.
- Draft employment contracts and internal regulations in line with Law No. 13/2003 and the Omnibus Law (UU Cipta Kerja).
2. SIOLK Registration and Permits for Foreign Employees
To process employment permits, documents must be submitted via the SIOLK system (Sistem Informasi Online Layanan Ketenagakerjaan).
If the company plans to hire foreign professionals, the following documents are required:
- RPTKA — Foreign Manpower Utilization Plan.
- IMTA — Work Permit.
Only after these documents are obtained can the KITAS (Limited Stay Permit/Work Visa) be issued based on the employment contract.
Conclusion: Tips for Foreign Investors
Launching a foreign-owned business in Indonesia through a PMA company is a structured legal process consisting of several phases:
- Corporate documentation and registration in the AHU system.
- Obtaining NIB, environmental approvals, and industry-specific licenses via OSS.
- BPJS registration and securing rights to employ foreign workers through the Ministry of Manpower.
However, depending on the industry, additional permits may be required from relevant local authorities (e.g., for healthcare, telecommunications, or education). Risk assessment, zoning verification, and early consultation with local legal experts can help reduce delays and streamline integration into Indonesia’s economy.
Practical Tip: Most successful foreign-led projects in Indonesia benefit from engaging licensed consulting firms. These firms ensure regulatory compliance and expedite interactions with government agencies.
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