Setting up a company in Bali can be an exciting step for foreign entrepreneurs looking to tap into Indonesia’s growing market. However, understanding the legal framework is crucial to ensure compliance with local regulations. Here’s a comprehensive guide on setting up a foreign-owned company (PT PMA) in Bali and how it differs from a local PT company.
Understanding Business Entities in Indonesia
When registering a company in Indonesia, you’ll generally encounter two main business structures:
Local PT (Perseroan Terbatas) – A company structure available only to Indonesian citizens.
PT PMA (Penanaman Modal Asing) – A foreign-owned company that allows overseas investors to conduct business in Indonesia legally.
For foreign entrepreneurs, setting up a PT PMA is the best option as it allows full legal ownership under certain business classifications.
Key Differences Between Local PT and PT PMA
Feature | Local PT | PT PMA |
---|---|---|
Ownership | 100% Indonesian | Foreigners can own up to 100% (depending on industry regulations) |
Business Scope | Domestic trade | Domestic & international trade |
Capital Requirement | Lower | Minimum IDR 10 billion (~USD 700,000) |
Licensing Process | Simpler | Requires additional investment approvals |
Market Access | Limited to the local market | Can engage in export, import, and trade globally |
Steps to Establish a PT PMA in Bali
1. Choose Your Business Classification
Indonesia has a Negative Investment List (DNI) that regulates foreign ownership in certain industries. Some sectors allow full foreign ownership, while others require a local partner.
2. Determine the Required Capital
To set up a PT PMA, you need a minimum investment of IDR 10 billion (around USD 700,000). However, only IDR 2.5 billion (USD 175,000) needs to be deposited as paid-up capital.
3. Company Name Registration
The company name must consist of at least three words and be approved by Indonesia’s Ministry of Law and Human Rights.
4. Obtain the Deed of Establishment & Legal Documents
This includes:
Deed of Establishment (prepared by a local notary)
Approval from the Ministry of Law and Human Rights
NPWP (Taxpayer Identification Number)
Business Identification Number (NIB)
5. Acquire Business Licenses
Depending on your industry, you may need additional licenses such as:
Operational and Commercial License
Sectoral Business Permits
Domicile Letter from local authorities
6. Open a Corporate Bank Account
Once your company is legally registered, you can open a business bank account to facilitate transactions.
7. Hire Employees and Process Work Permits
Foreign directors or employees need a KITAS (Temporary Stay Permit) and an IMTA (Work Permit) to work legally in Indonesia.
Why Set Up a PT PMA in Bali?
Bali is not just a top tourist destination—it’s also an emerging hub for business and investment. A PT PMA allows foreign investors to tap into Indonesia’s booming economy, whether in hospitality, tourism, e-commerce, or real estate.
Need Assistance with Company Registration?
- Setting up a business in a foreign country can be complex, but Bali Expat Legal Services makes the process smooth and hassle-free. From company registration to obtaining the necessary permits, our experienced team will guide you every step of the way.
📩 Contact us today to start your business journey in Bali!