A wholly-owned foreign company in Indonesia (known as a Penanaman Modal Asing, or PMA), is an ideal way for entrepreneurs to control an Indonesian company and make strategic management decisions. The following information will help you determine whether an Indonesian PMA is the optimum corporate structure to fulfill your business objectives:
Advantages of an Indonesian PMA
- A PMA can be 100% foreign-owned and controlled, with key management decisions taken by the foreign investor, not an Indonesian shareholder;
- There are no restrictions on where an Indonesian PMA can operate in Indonesia;
- Healy Consultants can obtain a 60-year business license for your Indonesian foreign company;
- Healy Consultants can open global corporate bank accounts to support your business;
- Healy Consultants can obtain work permits for expatriate staff to support the Indonesian company.
Disadvantages of an Indonesian PMA
- An Indonesia PMA is required to sell a share of at least 5% of the company to an Indonesian citizen entity within 15 years of commercial start up. However, a PMA set up with an initial 95% foreign ownership is not obliged to sell any shares;
- An Indonesia company requires a minimum of two shareholders, one director and one commissioner whose details appear on a public register. Corporate shareholders are permitted;
- The shareholder structure may be restricted to a prescribed minority foreign ownership dependent upon the business sector or activity the company intends to engage in;
- An Indonesian PMA requires a minimum issued share capital of US$100,000 to obtain approval by the BKPM Indonesia Investment Coordination Board;
- An Indonesia company often lacks the local market knowledge and network of contacts compared to working directly with an Indonesian partner;
- The approval process for a PMA is lengthy, and involves close liaison with the Indonesia Investment Coordination Board;
- Depending upon its intend area of activity, an Indonesian foreign representative office may be required to obtain a multiplicity of operating licenses from different government departments, thus adding time and cost to the engagement.
Healy Consultants fees for an Indonesian PMA
Healy Consultants’ fees to establish an Indonesia PMA start at US$16,150 in Year One and US$4,950 from Year Two onwards, depending on corporate structure and range of professional services required.
Healy Consultants fees to act as nominee director to support your Indonesian PMA amount to US$5,950 per annum (together with a one time refundable deposit of US$2,450). When closing down your Indonesia company, our de-registration / liquidation fees amount to US$3,450.
View the complete guide to Indonesia company incorporation.