Regulation to Build PT PMA in Indonesia -Establishment of a company in Indonesia can be done through foreign investment. Requirements for establishing a company are regulated in Law number 25/2007. Broadly speaking the Act contains the terms and procedures undertaken to make Investment. This investment activity is an activity undertaken by foreign investors to run business in Indonesia.
In making this investment can be done by using fully foreign capital or part of domestic capital. Foreign investors may be foreign nationals, foreign companies or foreign government agencies. And foreign companies must follow regulation to build PT PMA in Indonesia.
Foreign Investor Requirement
Foreign investors can be able to establish a company in Indonesia is regulated in Law number 40/2007, which speaks about Limited Liability Companies and various regulations for its implementation. Foreign Investment Company or often also called an investment company is usually abbreviated to “PT PMA” in Bahasa Indonesia. Many regulations must be adhered to this PT PMA establishment. Here are the rules to keep in mind:
- Business fields not included in the Negative List of Investment, are entirely open to foreign investment. This is exceptional there are other rules that mention it. For an explanation of the list of open and closed business fields in the investment field is contained in Presidential Regulation number 39/2014.
- A very important regulation for foreign investors to check the restrictions on PMA under the Negative List of Investment is the Regulation of the Head of the Central Bureau of Statistics number 57/2009.
- There is a regulation of the head of the Indonesian Investment Coordinating Board number 12/2013 which contains the guidelines and procedures for licensing and other modifications related to the Investment. This regulation also explains the standard in regulation to build PT PMA in Indonesia.
- The Limited Liability Company Law regulates the general requirements of a limited liability company and applies to PT PMA as well. This law regulates the requirements for establishment of PMA which is not regulated in BKPM.
Foreign Investor License Document
The regulation to build PT PMA in Indonesia and the necessary licensing or establishment documents for foreign investors to establish a company in the form of investment in Indonesia are as follows:
- Principal Permit from BKPM and Business License from BKPM.
- Company Registration License from the agency for integrated licensing services.
- Ministerial Decree on legalization of status of legal entity of PT PMA from related ministries.
- Domicile Certificate, compulsory employment report and welfare report.
- Taxpayer ID number “NPWP”, Deed or letter of Establishment of PT PMA, and description of Taxable Person for VAT purposes.
How to Establish a PT with Deregulation
- Submit a company name, provide payment for name bookings, issue permits on the use of a company name using a single service system. The length of the process of filing this company name is two business days.
- Obtain a corporate deed of notary with the time it takes one business day.
- Approval of legal entity establishment, issuance of permit for establishment of legal entity, payment of PNBP, and legalization of legal entity.
- Applying for SIUP, TDP, and health insurance for labor.
- Register a company in the Department of Labor with the time it takes one business day.
- Submission of employment health insurance list that can be done online.
- Obtain the taxpayer’s principal number and Enhancement Number of Taxable Entrepreneur.
Foreign Investment Period, Transfer Right and Repatriation
Any foreign investment permit is stipulated in the validity period not exceeding thirty years. Furthermore, the following provisions shall be stipulated:
- The Foreign Capital Company must open its own foreign capital.
- To determine the amount of foreign capital then the amount shall be reduced by the amounts by which the repatriation has been transferred.
- Each year the company is obliged to convey to the Government an overview of its foreign capital. Furthermore, concerning the right of transfer, fixed to a foreign capital enterprise, shall be granted the right of transfer in the foreign currency of the capital at the prevailing exchange rate for the gain derived by the capital after being subtracted by taxes and other payment obligations.
In addition, it also includes other costs specified further, namely; depreciation of fixed-equipment equipment, costs associated with foreign workers employed in Indonesia, and compensation in the case of nationalization. Implementation of the transfer is further determined by the Government.
It would be fair if a company using foreign capital is not allowed to repatriate its capital to transfer depreciation as long as it still obtains taxation and other levies. It should be pointed out that the transfer of foreign capital gains can be made as long as the company obtains taxation and other levies. All investors must comply with Regulation to build PT PMA in Indonesia.