Good to know
Good to Know
- The minimum paid-up capital for a PT PMA dropped sharply in October 2025 (from IDR 10 billion to IDR 2.5 billion), so if you're reading older guides online, the capital figures may be outdated.
- Amed itself has no separate local business office — incorporation is entirely a national-level process; only the registered address is local to Bali.
- For dive/tourism/villa businesses common around Amed, check carefully whether your specific KBLI code falls under the hospitality/accommodation exception that includes land and buildings in the IDR 10 billion investment-plan calculation — this can change your numbers significantly.
- Using a local Indonesian friend or partner as a 'nominee' shareholder to avoid PT PMA rules is illegal and carries real legal risk — this is a common scam/informal arrangement pitched to foreigners in Bali and should be avoided.
- Paid-up capital, once deposited, is generally locked in the company account for 12 months and can't just be withdrawn — budget accordingly.
- There is no 'lightweight' legal business structure for foreigners in Indonesia — a PT PMA is the only fully legal route to own a company, and it comes with a real minimum capital commitment (paid-up capital around IDR 2.5 billion), not a token registration fee.
- A PT PMA is taxed the same way as a local Indonesian company (22% on net profit) — the extra complexity for foreign owners comes mainly from withholding tax on money sent back abroad (dividends, loan interest, royalties, management fees), not a higher domestic rate.
- Using a local friend or partner as a 'nominee' owner to skip PT PMA capital requirements is a known scam/risk pattern in Bali — the arrangement is generally unenforceable and the nominee can legally claim the business if the relationship sours.
- Rules changed in 2026 to specifically block PT PMAs from using the simplified 0.5%-of-turnover small-business tax rate, so a newly formed foreign-owned company should budget for standard corporate accounting and 22% tax from its very first year, even with modest revenue.
- Given the ongoing pace of Indonesian tax and investment regulation changes (e.g. new 2025–2026 rules on MSME eligibility and minimum tax), it's worth confirming current thresholds with a licensed Indonesian tax consultant or notary before incorporating rather than relying solely on older guides.
Capital Requirements
- Minimum Paid Up Capital
- IDR 2,500,000,000
- Total Investment Plan Threshold Per Kbli Code
- IDR 10,000,000,000
Notes
- As of October 2025, BKPM Regulation No. 5 of 2025 cut the minimum paid-up capital by 75%, from IDR 10 billion to IDR 2.5 billion.
- The paid-up capital does not need to be fully deposited at the moment of registration — a signed capital declaration letter is accepted, with the actual bank deposit made after the corporate account is opened.
- Once deposited, that paid-up capital is generally locked and cannot be withdrawn for non-business purposes for 12 months, though it can be used for operating expenses, asset purchases, or construction.
- Land and buildings are usually excluded from the IDR 10 billion investment-plan calculation, except in property development, hospitality/accommodation, agriculture, plantation, livestock, and aquaculture sectors — relevant for Amed-area villa/guesthouse or dive-resort businesses.
Typical Cost Breakdown
- Government Administrative Fees
- IDR 5,000,000
For standard sectors without special licensing; typically below this figure per multiple industry sources.
- Minimum Paid Up Capital Required
- IDR 2,500,000,000
This is company capital, not a fee — it becomes company funds usable for business operations, not sunk cost.
Registered Office Address Per Year
- Amount USD Low
- 500
- Currency Local
- IDR
- Amount USD High
- 1500
- Amount Local Low
- 7900000
- Amount Local High
- 23700000
- Note
- Recurring cost for a compliant serviced/registered office; note some reports that virtual-only offices are no longer accepted for PT PMA in Bali.
Professional Service Fees Notary And Consultant
- Amount USD Low
- 3000
- Currency Local
- IDR
- Amount USD High
- 7000
- Amount Local Low
- 47400000
- Amount Local High
- 110600000
- Note
- Commonly quoted range for notary drafting, filing, and consultant handling of the full process.
Business Tax And Structure Options
- Jurisdiction Note
- Business registration, incorporation, and corporate tax rules for foreigners are set at the national (Indonesian) level, not by the local Amed/Karangasem authority — the same framework applies whether the business is based in Amed, Ubud, or Jakarta.
Corporate Tax
- Standard Rate Percent
- 22
- Reduced Rate Conditions
- A PT PMA that lists on the Indonesian stock exchange with a minimum 40% public float can qualify for a reduced 19% rate; separately, investments between roughly IDR 1–500 billion may qualify for a 50% corporate tax reduction during the first five years, subject to sector and investment-size approval.
- VAT
- VAT is set at a statutory 12% from January 2025, though most ordinary domestic transactions carry an effective rate of around 11% due to how the taxable base is calculated. A company must register as a VAT-collecting entity (PKP) once annual taxable turnover passes roughly IDR 4.8 billion.
- Basis
- net taxable profit, not gross revenue
- Dividend Withholding
- Dividends paid out to a foreign shareholder are generally subject to a 20% withholding tax under Article 26, though this is often reduced (commonly to around 10%) under an applicable tax treaty between Indonesia and the shareholder's home country.
- Small Turnover Final Tax Regime
- A separate final-tax regime taxes gross turnover at 0.5% for small resident companies under roughly IDR 4.8 billion annual turnover, but recent regulatory changes (PP No. 20/2026) explicitly exclude PT PMA (foreign-owned companies) from using this 0.5% rate — a PT PMA must use the standard corporate pathway from day one regardless of how small its initial revenue is.
- Notes
- The standard corporate income tax rate in Indonesia is 22 percent, a figure that has applied since 2020, fixed by the Harmonisation of Tax Regulations Law from the 2022 tax year and confirmed to remain in place for 2026. A PT PMA is treated as a resident taxpayer from the moment it is incorporated, so it is taxed on this basis on both Indonesian and worldwide income, and pays the same headline rate as a locally-owned Indonesian company.
Freelancer Vs Company
- Nominee Risk
- Nominee agreements are widely flagged by legal advisors as unenforceable and risky.
- PT Pma Option
- For any foreigner who wants to actually own equity, sign contracts, hire staff, invoice locally, or hold a business-linked KITAS, the only fully legal vehicle is a PT PMA (Perseroan Terbatas Penanaman Modal Asing) — Indonesia's foreign-investment limited liability company.
- Nominee Structures
- Some foreigners historically tried to run a business informally through an Indonesian friend or partner's personal name or local PT ('nominee' arrangement) to avoid the PT PMA capital requirements.
- Sole Proprietor Freelancer Option
- Indonesia has no legal 'freelancer' or foreigner sole-proprietorship registration that lets a non-citizen invoice locally or take Indonesian-sourced income in their own name. A foreign individual working online for overseas clients while physically in Bali (e.g. on a remote-worker/B211A-type stay permit) is generally tolerated if the income is foreign-sourced and paid into a foreign account, but there is no formal 'freelance business license' pathway for a foreigner to legally sell goods/services to local or Indonesian customers as an individual.
PT Pma Capital Requirements
- Minimum Investment Plan
- IDR 10,000,000,000
- Minimum Paid Up Capital
- IDR 2,500,000,000
- Notes
- Under current BKPM rules a PT PMA generally requires a total investment plan of at least IDR 10 billion (excluding land/buildings) per business classification (KBLI), with a minimum paid-up capital of IDR 2.5 billion (25% of that) actually deposited into the company bank account after incorporation.
Setup Service Cost Range
- Low
- IDR 15,000,000
- High
- IDR 35,000,000
- Note
- This range covers typical notary/registration/professional service fees for forming the PT PMA itself — it does NOT include the separate minimum capital requirement above, which must actually be funded.
Filing And Compliance Obligations
- Audit
- Most PT PMA classes are also required to undergo an annual external audit.
- Tax ID
- A PT PMA must obtain an NPWP (tax ID number) before it can open a corporate bank account or conduct formal business.
- Annual Filing
- The annual corporate income tax return (SPT Tahunan Badan) is due by 30 April of the following fiscal year.
- Monthly Filings
- Monthly obligations include employee withholding tax (PPh 21), other withholding taxes (PPh 23/26), corporate income tax installments (PPh 25), and VAT filings if VAT-registered — payments are generally due by the 15th and filings by the 20th of the following month.
- Investment Reporting
- PT PMAs must also submit quarterly Investment Realization Reports (LKPM) to the investment board via the OSS system, due before the 10th of April, July, October, and January for the prior quarter — a 'zero report' is accepted if the business hasn't started operating yet.
- Self Assessment System
- Indonesia runs on a self-assessment system, meaning the company itself is responsible for calculating, paying, and reporting its own tax liabilities each period, and the tax office can later issue an assessment or penalty notice if filings are missed or underpaid.
Jurisdiction Note
Amed is a small village in Karangasem Regency, East Bali. There is no separate local business registry for Amed — company incorporation is a national Indonesian process (through the Ministry of Investment/BKPM, the Ministry of Law and Human Rights, and the OSS system), with the registered business/domicile address simply being located in Bali. Common Amed-area business activities (dive centers, villas, small guesthouses, restaurants) fall under standard tourism/hospitality KBLI codes.
Realistic Timeline
- Regulated Sectors
- 8 to 12 weeks for sectors requiring additional sector-specific permits (e.g., healthcare, fintech, financial services, some construction).
- Common Delay Cause
- Missing or incorrect documents at submission is the most frequently cited cause of delay.
- Standard Sectors No Special License
- Approximately 3 to 6 weeks from document preparation to NIB issuance, assuming complete documentation.
Remote Incorporation
The full process — notary coordination via Power of Attorney, OSS-RBA submission, tax registration, and bank account facilitation — can generally be completed without the foreign shareholder physically traveling to Indonesia, using a licensed local representative.
Core Incorporation Steps
Core Incorporation Steps
- 1. Choose the correct KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) business classification code(s) — this determines foreign ownership eligibility, licensing, and what the company can legally do.
- 2. Reserve the company name with the Ministry of Law and Human Rights (Kemenkumham).
- 3. Draft the Deed of Establishment (Akta Pendirian) with an Indonesian notary, covering Articles of Association, shareholder details, capital structure, and KBLI codes.
- 4. Notarize the deed and obtain legal entity approval from the Ministry of Law and Human Rights.
- 5. Register through Indonesia's Online Single Submission – Risk-Based Approach (OSS-RBA) system to obtain the NIB (Nomor Induk Berusaha / Business Identification Number), which also serves as the company's import license and other base registrations.
- 6. Register for a Tax ID (NPWP) and, once operating, VAT/PKP status if applicable.
- 7. Open a corporate bank account and deposit the paid-up capital.
- 8. Obtain any sector-specific operational licenses required for the KBLI chosen (e.g., tourism business license, health/safety permits for a dive operation).
Official Government Links
- Ministry Of Investment Bkpm
- https://www.bkpm.go.id
- Online Single Submission Oss
- https://oss.go.id
- Ministry Of Law And Human Rights Ahu
- https://ahu.go.id
Required Entity For Foreigners
- Detail
- PT PMA is the only legal structure through which a foreigner can directly own shares and legally operate a commercial business in Indonesia.
- Entity Name
- PT PMA (Perseroan Terbatas Penanaman Modal Asing) — foreign investment limited liability company
Local Partner Or Sponsor Mandate
- Detail
- Indonesia's Positive Investment List allows 100% foreign ownership in over 200 business sectors, so a local partner is not mandatory in most cases. Some sectors, however, are restricted, capped, or fully closed to foreign ownership and require a local partner or must be set up as a local Indonesian company instead. Which category applies depends on the specific KBLI (business classification) code chosen.
- General Rule
- No local Indonesian partner or shareholder is legally required for most business sectors.
- Nominee Warning
- Having an Indonesian national hold shares on a foreigner's behalf as a workaround (a 'nominee' arrangement) is explicitly illegal, can result in company dissolution, asset forfeiture, and criminal liability.
AI-generated estimateData refreshed July 2026
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Data last updated July 2026 · Verify anything important.