Meeting the Minimum Capital Requirements and Investment Requirements
The minimum capital requirement for foreign-owned limited liability companies (PT PMA) is IDR 10 billion (approx. USD 700,000). Lifestyle businesses are quite small so fulfilling these requirements is difficult.
There is no need to submit an investment plan, nor show the company’s bank account. However, the Indonesian government enforces the above regulations. You must prepare a capital statement letter to prove the paid-up capital. Your company will also have to file an investment activity report (LKPM) periodically to show that you are investing money.
VIVO ASIA can help you prepare and submit the capital statement letter and LKPM. We will make sure that you maintain compliance with Indonesia’s investment regulations.
Limited Percentage of Foreign Ownership
Many businesses are open to full foreign ownership. However, some business classifications (KBLI) only allow partial foreign ownership. There are many hospitality businesses with such restrictions.
The table below shows some examples of common hospitality businesses that do not allow full foreign ownership.
Business Type | Allowed Foreign Ownership |
Hotels (4 stars or less) | > 61 rooms 100% for PMA |
Travel Agency/Tour Operator | 70% (for investors from ASEAN countries) 67% (for investors from non-ASEAN countries) 100% open for PMA |
Water sports and diving tours | 70% (for investors from ASEAN countries) 51% (for investors from non-ASEAN countries) 100% open for PMA |
Wellness services/Spas | 100% open for PMA |
Regulations for Multiple Businesses Under One Company
There are regulations to note regarding multiple KBLIs under one PT PMA. For example, the minimum investment requirement of IDR 10 billion is for each KBLI. So if you have two KBLIs under your PT PMA, the minimum investment requirement is IDR 20 billion.
Additionally, there are some KBLIs that cannot be under the same PT PMA. This is the case for manufacturing and distribution KBLIs. A PT PMA cannot have both of these KBLIs.
Another thing to note is that all businesses in a PT PMA share tax reports, investment reports, and liabilities. Some people with separate businesses set up a single PT PMA together to reduce costs for registration and visas. All partners will be liable if one does not report taxes or investments correctly. All partners will also be liable if they are unable to consolidate all data on time.