What is PT PMA in Bali? A Complete Guide for Foreign Investors

Ever thought about starting a business in Bali but unsure how to do it legally? Don’t worry, you’re not alone! Bali is a top destination for foreign entrepreneurs and international investors seeking company establishment opportunities. Many foreign investors are eager to invest in Bali, and PT PMA in Bali is the perfect route to turn that business dream into reality. With a PT PMA, you can run a business in Bali legally and profitably. Bali, being a hotspot for tourism and real estate, offers tons of business opportunities, especially in hospitality, restaurants, and property.

But what exactly is PT PMA, and why is it so important for foreign investors? PT PMA stands for Perseroan Terbatas Penanaman Modal Asing, which is a type of foreign investment company and a form of foreign direct investment (FDI) in Indonesia. This legal structure is also referred to as ‘terbatas penanaman modal asing’ in Indonesian regulations. If you’re still unsure, this article will walk you through everything you need to know about PT PMA in Bali, from what it is, its benefits, the steps to set it up, and the challenges you might face. For anyone looking to start a business or invest in Bali, this guide will help make the process much easier!

What is PT PMA in Bali?

PT PMA is a type of business entity that allows foreign investors to own a business or property in Indonesia, including Bali. PT PMA in Indonesia is the primary legal structure for foreign investors to establish a company in Indonesia. So, if you’re a foreigner (WNA) and want to start a business in Bali, PT PMA is the way to go. By setting up PT PMA, you can own up to 100% of the shares, depending on the sector you choose. The best part is that it’s all legally recognized under Indonesian law. PT PMA is the only legal way for foreigners to conduct business and earn commercial income in Indonesia.

When it comes to ownership and legal recognition, PT PMA is one of several legal entities available for foreign investment, but it is the only one that allows full foreign ownership in many sectors.

Why Bali? Bali isn’t just known for its beautiful beaches and tourism; it’s also an investment hotspot that continues to grow. The island is a magnet for investors looking to put their money into high-potential sectors. For example, in 2024, Bali’s tourism sector accounted for around 59.2% of all foreign investment in Indonesia. This shows how much potential Bali holds for businesses related to tourism, such as managing villas, restaurants, and tourism services, which attract many visitors each year.

Bali is a booming tourist hub, and with regulations like Law No. 25 of 2007 on Investment and the Omnibus Law (Cipta Kerja 2020), it’s even more attractive to foreign investors. These regulations open up great opportunities for foreign investments, particularly in sectors like tourism, property, and restaurants.

Benefits of PT PMA in Bali for Foreign Investors

Bali, as an international tourist destination, offers huge opportunities for foreign investors. One of the best ways to do business legally in Bali is by setting up a PT PMA. Here are some of the main benefits you can enjoy when owning a PT PMA in Bali:

• Legal Business OwnershipWith PT PMA, you can legally own a business and property in Bali. For example, if you plan to build a villa or hotel, you can obtain Hak Guna Bangunan (HGB) for land up to 80 years. This allows you to run your business long-term without worrying about land ownership or permits.
• Access to a Large MarketBali is a global tourism center, and this sector contributes a large portion of the region’s income. With PT PMA in Bali, you can directly access a vast market for businesses like restaurants, spas, tour agencies, or other tourism-related businesses. You won’t need to rely on local partners to run your business; PT PMA gives you full control over your operations.
• Flexible Business OwnershipPT PMA allows foreign investors to establish their own company in Bali, giving you the option to own 100% of the shares in your company, especially in sectors that are open to foreign investment like tourism, property, and restaurants.
• Simplified Licensing ProcessThe Indonesian government, through the Online Single Submission (OSS) system, has made it easier to apply for business permits. All the licenses you need can be processed online, making the process faster and more transparent.
• Investor Visa (KITAS)With PT PMA, you can apply for a KITAS Investor, which allows you to stay longer in Bali. This visa provides a convenient way for you to live and work in Bali while managing your business.

Legal Framework for PT PMA in Bali

The legal framework for establishing a PT PMA in Bali is built on a robust foundation of Indonesian laws and regulations, designed to protect both foreign investors and the local economy. The Indonesian Investment Coordinating Board (BKPM) plays a central role in overseeing foreign investment companies, ensuring that all business activities comply with national standards. Under the Limited Liability Company Law, a PT PMA is recognized as a legal entity, granting foreign investors the right to participate in a wide range of business sectors, subject to the Negative Investment List. This list outlines which industries are open to foreign ownership and which are restricted, so it’s essential to review it before choosing your business sector.

To legally operate as a foreign-owned company, you must meet the minimum paid-up capital requirements, which vary depending on your chosen business sector. These capital requirements are in place to ensure that foreign investment in Bali is substantial and sustainable. By adhering to these regulations, foreign investors can enjoy better legal security and a stable environment for their business activities. The legal framework for PT PMA in Bali is designed to encourage responsible foreign investment while safeguarding the interests of both investors and the Indonesian economy.

Steps to Set Up PT PMA in Bali

Setting up a PT PMA in Bali isn’t as difficult as it seems, as long as you follow the right steps. Bali is an attractive investment location, especially for tourism and property businesses. However, the legal entity setup and company registration process can be a complex process, so professional assistance is recommended. If you plan to start a business in Bali, here’s a complete guide to help everything go smoothly:

1. Choose the Right Business Sector

The first step is to choose a business sector that aligns with the Positive Investment List issued by the government. Sectors like tourism and property are fully open to foreign investors and offer many opportunities. However, other sectors like small retail may have restrictions, so be sure to pick a sector that allows 100% foreign ownership if that’s your goal.

2. Pick a Unique Company Name

After deciding on your business sector, the next step is to choose a company name. Your PT PMA company name must be unique and consist of at least three words. It also needs to be approved by the Ministry of Law and Human Rights. Make sure the name you choose isn’t already taken by another company.

3. Determine the Minimum Capital

To set up PT PMA in Bali, you need to meet a minimum capital requirement of about IDR 10 billion (around USD 700,000), with a minimum 25% deposit, which is around IDR 2.5 billion. This capital must be deposited into the company’s bank account before moving forward with the setup process. This ensures that your company has the necessary financial foundation to operate. Investors must provide 100% of the paid-up capital for a PT PMA as required by the BKPM.

4. Set Up the Company Structure

Your PT PMA in Bali must have at least two shareholders, which can be either foreign or local. Additionally, you’ll need to appoint a director and commissioner. This structure is required to meet legal requirements in Indonesia. The director of a PT PMA has to be an individual who is responsible for declaring the tax of the company. Make sure you choose the right people for these positions to ensure smooth business operations.

5. Process the Legal Documents

Once your company structure is in place, the next step is to process the necessary legal documents. This includes creating an Incorporation Deed through a notary, registering your company via the OSS system to get your Business Identification Number (NIB), and applying for your company’s Tax Identification Number (NPWP). If your business is in tourism or property, make sure you also obtain any specific permits required for your industry. To set up a PT PMA, foreign investors must register the company with the Indonesian Investment Coordinating Board (BKPM).

6. Open a Company Bank Account

To proceed, you’ll need to open a company bank account in Indonesia. This account will be used to deposit the company’s capital and handle daily business transactions. Each quarter, the company has to report its investment report to the BKPM, known as LKPM.

7. Obtain Additional Permits

If you plan to operate a property business or other types of businesses that require additional permits (such as environmental or location permits), make sure these permits are processed and approved. Certain types of businesses in Bali, especially larger property ventures, require special permits before you can begin operations. A PT PMA must comply with foreign ownership and investment laws, zoning regulations, and building codes.

Read more: Understanding the Types of Indonesian Visas You Need to Know!

Challenges in Setting Up PT PMA in Bali

While PT PMA in Bali offers great potential, there are some challenges you should be aware of before starting. Here are a few key things to keep in mind:

• Large Capital Requirement
  One of the main challenges is the large initial capital needed. To establish PT PMA, you’ll need a minimum of IDR 10 billion per shareholder. This might be a barrier for investors with limited funds, especially if you’re just starting out. Make sure you’re prepared with enough capital to meet this requirement.
• Complicated Bureaucracy
  The administrative process in Indonesia, especially for applying for permits through the OSS system, can take time and be confusing for foreign investors. The process for obtaining permits like NIB, Incorporation Deed, and other business licenses can be tricky, especially if you’re unfamiliar with the regulatory system. Without the help of an experienced consultant, this process can be a challenge.
• Risk of “Ghost” PT PMA
  Recently, some PT PMA companies have been used just to obtain KITAS (temporary residence permit) without running an active business. The government is tightening regulations around these companies, and those not operating a legitimate business could face penalties or be shut down. Make sure your business is genuinely running to avoid legal trouble.
• Changing Regulations
  Regulations regarding foreign investment in Indonesia, such as the Positive Investment List, can change frequently. Revisions could restrict certain sectors for foreign investors, affecting your business. Stay updated on regulatory changes to ensure you’re always in compliance.
• Corporate Income Tax
  PT PMAs are subject to corporate income tax of 22% on business profits. This is an important factor to consider when planning your financial strategy.

Investment Tips through PT PMA in Bali

Investing in Bali through PT PMA can be very profitable, but it requires careful planning. Here are some tips to make sure your business runs smoothly:

• Consult with an Expert
  Before you start, it’s essential to consult with a trusted legal expert. Setting up a PT PMA in Bali involves many regulations that can be confusing for foreign investors. Bali Premium Trip is a great option, we specialize in helping foreign investors set up businesses in Bali. With professional help, you can avoid mistakes and ensure your business operates according to the rules.
• Focus on Profitable Sectors
  Bali has highly profitable sectors like tourism and property. These sectors continue to grow, thanks to the high number of tourists visiting each year. To maximize your profits, focus on businesses related to these sectors, such as villas, hotels, restaurants, or spas. Bali’s large market makes these sectors highly promising.
• Meet the Minimum Capital Requirement
  To set up PT PMA in Bali, you need to meet the IDR 10 billion minimum capital requirement. This is an essential requirement to ensure your company is legally registered and ready to operate. Be sure to prepare enough funds to avoid any delays in the process.
• Build a Local Network
  Building a solid local network is essential for success in Bali. A local partner who understands the market can help you run your business more efficiently. They will provide insights into local trends and assist you in navigating regulations and meeting the needs of the local market.
• Choose a Strategic Location
  Location is key to business success in Bali. Choose areas near major tourist spots, such as Badung, Gianyar, and Denpasar, as they have easy access to a large international market, boosting the chances of your business succeeding.

Read more: e-Visa Indonesia: Everything You Need to Know Before Applying

Plan Your Business Investment in Bali with Bali Premium Trip!

Setting up PT PMA in Bali is the perfect solution for foreign investors looking to tap into the booming tourism and property markets in Bali. With clear steps and expert guidance, you can start a business in Bali legally and profitably. Bali offers huge potential, and PT PMA in Bali is the ideal route to take advantage of it.

To run your business smoothly, it’s important to work with experienced consultants who understand Bali’s legal landscape. Bali Premium Trip is the perfect partner for your business journey. We offer complete services by Corporate and Invesment law in Bali, from consulting on PT PMA setup, sector selection, and document management, to helping with OSS permits and coordination with BKPM or notaries. We also assist with KITAS Investor applications and offer advice on the best business locations in Bali.

So what are you waiting for? Contact Bali Premium Trip today and start your business investment in Bali! Let us guide you through the process of setting up PT PMA in Bali with ease and confidence.