We have helped hundreds of clients to set up a business in Bali. This, along with getting an investor or working visa, allows our clients to live and work in Bali, Indonesia, long term. Today we explain the key benefits of a setting up a PT PMA (Foreign Investment LLC). We will also detail the steps, approximate costs and timescale for the process.
PT PMA Overview:
- Full foreign ownership is possible, making this the ideal model for foreign investors who want full legal control of their business operating in Indonesia
- Shareholders, directors and commissioners can all be foreigners - you need to have at least 2 shareholders, 1 director and 1 commissioner. There can be up to 3 people for each position, which later can be called as Board of Directors and Board of Commissioners
- Your PT PMA can provide direct sponsorship, ie KITAS or Business Visa, to foreign workers and business partners
- Allows for properties and assets to be owned/leased to the company
- Highly demanding investment capacity requirement (at least IDR 10B) and you need to inject a paid-up capital/working capital of IDR 2,500,000,000 to the bank account of the company once the company is established. This can be over the course of several years.
- It will take around 2.5 to 3 months to set up the company until it has ALL the licenses.
The PT PMA Company set up process can be split into 3 parts:
1. Set up PT PMA
These are the steps required for the initial set up of your company. This stage needs to be complete before we can apply for your Kitas with your company as the sponsor. Below we have detailed the documents we need from you.
Numbers 1-4 are for your business address. If you will be delivering services at various locations, you will need a correspondence office address as your administrative office. (We have a partnership with a Virtual Office space you can rent.)
- Rent agreement
- Land certificate
- Receipt of payment building and land tax the last 3 months (PBB)
- Building permit (IMB)
- Copy passport shareholder (full pages)
- Copy ID and tax register number of local shareholder (if any)
- Overseas and Indonesia address of each investor
- Company name (3 variations in case they are not available)
- Company address
- Line of business (we will discuss your options with you in person)
- The share of capital for each investor (total capital min. US $ 1.000.000 and issued capital min. US $250.000)
- Position of each investor in the company (Director, Commissioner)
This process takes 21 days and at the end of it, you will have the following documents.
- Article of Association (Deed of Incorporation from a notary)
- Ministry of Justice Approval (SK Kemenkumham)
We will also make the application on the OSS system for the following documents. But, they will not be effective until we complete the necessary steps in step 3.
- Business License Number NIB
- Business Operational License (Ijin Usaha)
- Ijin Lokasi (local permit)
- Ijin Linkungan (environmental effect document)
- Domicile Letter (SKTU)
- Registration of Tax ID (NPWP)
Step 1 costs IDR 25,000,000 for low-risk business
or IDR 35,000,000 for medium-risk business
This cost can be split between the company investors.
2. Apply for Visas (Investor Kitas or Working Kitas)
At this stage, we can apply for the visas for foreigners to live and work in Indonesia. The most cost-effective and straightforward visa to obtain is an Investor Visa. This is valid for 2 years and costs IDR 17,500,000. The process to obtain an Investor Kitas takes 21 days. With an Investor Kitas, you cannot work in Bali, Indonesia. You would however be able to run your company, making decisions on staff and processes.
The other option is to obtain a Working Visa. Unless your company is entertainment-based, this visa will be valid for 1 year and allow you to earn money in Indonesia. A Working Kitas takes 28 days to process and each one costs IDR 13,500,000. You also need to pay USD 1,200 for tax.
Step 2 costs IDR 17,500,000 per person
We may be able to offer a discount on additional visas applied for under the same company.
3. Complete Company Set Up
We need to complete this stage before you will be able to renew your Visas - so in 1 year for those with a Working Kitas, or 2 years for those with an Investor Kitas. The key documents involved are:
- SPPL or UKL depending on business type
- NIB - Effective
- Business Operational License (Ijin Usaha) - Effective
- Ijin Lokasi (local permit) - Effective
- Ijin Linkungan (environmental effect document) - Effective
The requirements of this stage vary dramatically depending on the type of business you are setting up. A consultancy firm that works mostly online will cost a lot less than a large hotel or restaurant.
Step 3 costs at least IDR 20,000,000.
Example Company Set Up
For a business such as a marketing agency, with 5 investors, the initial cost per person would be IDR 22.5 million (USD 1,600.) This would get the business set up and 2-year investor visas for the 5 investors.
Step 1: IDR 25 m / 5 people + Step 2: IDR 17.5m
Over the course of the two years, step 3 will have to be completed. For this example, with 5 investors, this would cost another IDR 4m per investor. Without completing step 3 you will not be able to renew your visas when they expire after 2 years.
Operating a PMA - Important Information
Company Tax in Bali
For every company in Indonesia, it is mandatory to report the annual tax. The general income tax rate is around 12.5-25% of the net profit if the company’s gross revenue is above IDR 4.8 billion. A flat rate of 25% is applied when the yearly revenue of the company is above IDR 50 billion. If the company’s gross income is below IDR 4.8 billion, the final income tax rate is 0.5% of the monthly gross income.
PMA Investment Reports
Additionally, to paying taxes, you will need to do a quarterly investment report. This report usually contains the profit and loss statement of your company, information on the number of employees, etc. This report is important as the government will see that your company is up and running instead of being a dormant company. Failing to provide such a report will attract the authorities to run an audit of your company.
Business classification for PT PMA
Every company in Indonesia needs to be registered under at least one business classification. The business classifications are determined by the activities you are planning to do. Based on the Presidential Decree No. 36 Year 2010, not all the business classifications are open 100% for foreign ownership. There are some other classifications that are closed for foreign ownership and require you to have a local partner to incorporate a company.
For example, the business classifications that are still open 100% for foreign ownership are real estate, villa accommodation, business consulting, restaurant or cafe, and trading for export/import among others. On the other hand, business classifications such as retail and beauty salons are closed for foreign ownership.
If you would like to learn more about setting up a company in Bali, get in touch with us today. You can do so by sending an email to info@visaagencybali.com, by messaging our Facebook page or sending a message on WhatsApp:
+6281338277350 (Claudia)
+628191562006 (Gede Darsana)
+6281338704627 (Agus)
+628123813470 (Gede Arya)
