Minimum Capital for a Foreign-Owned Company in Indonesia: Updates, Requirements, and Practical Guide

Planning to start a foreign-owned business in Indonesia? You'll need more than just a strategic vision — understanding the financial prerequisites, especially the paid-up capital, is key. In this article, we examine the latest regulatory changes, sector-specific exemptions, and provide practical advice on how to establish a foreign-owned company — PT PMA.

Capital Requirements When Registering a PT PMA

IDR 10 Billion — The Mandated Minimum

According to BKPM Regulation No. 4/2021 and supporting regulations, any company with foreign ownership in Indonesia registered as a PT PMA (Perseroan Terbatas Penanaman Modal Asing) must declare a minimum paid-up capital of IDR 10 billion.

As of December 2025, this is equivalent to approximately USD 640,000–670,000, depending on the exchange rate. This capital threshold signals investors’ serious intentions and helps prevent the registration of shell or non-resident entities.

Previously, the regulations allowed for lower capital requirements. However, since 2021, the minimum threshold has been raised to promote long-term capital inflows into Indonesia’s real economy.

Initial Deposit: Minimum 25% of Declared Capital

At the application stage, investors must inject at least 25% of the declared capital — that is, no less than IDR 2.5 billion (around USD 160,000–170,000, subject to currency rates). This contribution must be verified through official documentary proof — such as a bank statement or confirmation of funds in the company's corporate account.

Without proof of this contribution, the company cannot obtain a NIB (Nomor Induk Berusaha) — a unique business registration number required to operate legally.

Be Aware of Industry-Based Exceptions

Although the general minimum capital requirement is IDR 10 billion, sector-specific and business-type exemptions do exist. Micro, Small and Medium Enterprises (MSMEs) with limited foreign ownership or located in designated special economic zones may face different requirements. However, these cases are rare and must be confirmed and approved directly by BKPM.

Online PT PMA Registration via OSS Platform

Since 2018, Indonesia has streamlined the registration process for foreign-owned businesses through the OSS (Online Single Submission) portal — a centralized digital platform that facilitates remote business licensing.

In-Person Presence Not Formally Required

You can register your business remotely without setting foot in Indonesia. However, it is essential to assign a representative within Indonesia — typically through a legal power of attorney or by engaging a licensed service provider (such as a Notary PPAT or corporate legal consultancy).

Required Documents for PT PMA Registration:

• Company Articles of Association (Akte Pendirian), notarized;
• Ownership structure showing foreign shareholders;
• Proof of minimum capital deposit (25% of declared capital);
• Registered business address in Indonesia;
• Business plan (mandatory in regulated sectors like energy, pharmaceuticals, finance, etc.).

Errors or incomplete documentation may lead to application rejection and delays in the registration process.

Tips for Foreign Investors

1. Financial Planning — Before Starting Registration

Identify funding sources in advance. You may be required to demonstrate not just the capital injection but also the source of funds — particularly if your investment exceeds USD 1 million or triggers foreign exchange reporting obligations.

2. Hire Experienced Legal Counsel

While online registration is available, accurate legal documentation remains critical. Errors in the articles of incorporation, shareholder disputes, or inconsistencies in ownership structure are leading causes of rejection. Work with attorneys who specialize in Indonesian commercial and investment law.

3. Structure Shareholding Smartly

A minimum of two shareholders is required to form a PT PMA. At least one must be a foreign individual or legal entity. All shareholders must sign an agreement that outlines their investment commitments and level of management involvement.

What Costs Exist Beyond Paid-Up Capital?

The minimum paid-up capital is only part of your total setup costs. Make sure to factor in the following mandatory expenses:

• Notarial and registration services: typically ranging from IDR 10 million to IDR 30 million
• Legal business address: rental or virtual office services — from IDR 5 million per year
• Industry-specific licenses: costs vary based on sector (e.g., trade, finance, healthcare)
• Accounting and tax advisory services: strongly recommended on an ongoing basis to remain compliant with Indonesian tax and audit laws

These items are not included in the paid-up capital but are nonetheless essential for operational readiness.

Common Mistakes to Avoid

• Failing to verify foreign exchange rates and miscalculating required capital
• Using unlicensed agents for OSS registrations
• Incomplete shareholder structure — especially for legal entities lacking in-country representation
• Overlooking sectoral restrictions — some activities fall under the “Negative Investment List”

Conclusion

The IDR 10 billion capital requirement isn't a mere technical hurdle — it's a vital benchmark that separates committed investors from attempts to set up shell companies. Since 2021, this policy has been actively enforced, illustrating Indonesia's commitment to attracting long-term, direct investments into its domestic market.

If you're considering setting up a business overseas, including in Indonesia, assess your financial capability, review the relevant regulations (starting with BKPM Regulation No. 4/2021), and consult with local legal experts. Thorough preparation and transparency are key to successful registration.

FAQs

Can I register a PT PMA with less than the minimum capital?

No. In the vast majority of cases, the minimum paid-up capital for a PT PMA is IDR 10 billion. Exceptions apply only to specialized sectors or MSMEs under special provisions, and must be officially approved by BKPM.

Can the initial capital be used for operational expenses?

Yes, once the 25% capital deposit is verified and the company is officially registered, funds can be used for standard operations: office rent, salaries, equipment purchases, etc. It is crucial, however, to maintain proper bookkeeping and keep supporting documents for audits by tax authorities or BKPM.

Is a bank account required before registration is complete?

No. A corporate bank account can only be opened after the NIB number is issued. Only then can paid-up capital be deposited, and the company gain access to banking, contracting with local vendors, and other operations.

How long does company registration take?

It depends on the completeness and accuracy of submitted documents. On average, it takes 7 to 21 working days, assuming there are no issues flagged by the OSS system or local authorities.

Which bank should I choose for company accounts?

All major Indonesian banks are open to PT PMAs: BCA, Mandiri, CIMB Niaga, HSBC Indonesia, among others. We recommend choosing a bank with experience handling foreign corporate clients and English-language support services.