Establish Your PT PMA in Indonesia with Lower Capital and Strong Compliance

Entering the Indonesian market can now begin with a paid up capital of only IDR 2.5 billion, without compromising the quality of investment planning and regulatory compliance.

XPND supports you throughout the entire process, from establishing a Foreign Investment Limited Liability Company (PT PMA) and managing capital lock up, to structuring your investor visa strategy.

Indonesia 2025 to 2026: Lower Entry, Stronger Oversight

New regulations under:

• Government Regulation (PP) No. 28 of 2025
• Investment Coordinating Board (BKPM) Regulation No. 5 of 2025

have reshaped how Indonesia receives foreign investment.

The government has reduced the minimum paid up capital for establishing a PT PMA to IDR 2.5 billion, while at the same time:

• Strengthening supervision of investment realization
• Integrating OSS data with tax authorities, immigration, and the Ministry of Law and Human Rights
• Implementing automatic administrative sanctions for non compliance

For mid sized foreign investors and startups, this creates both opportunities and challenges:

• Lower entry barrier: Initial capital requirements are more affordable
• Stronger quality control: Weak planning may result in suspended licenses, issues in LKPM reporting, and delays in visa processing

In this landscape, establishing a PT PMA is no longer just about obtaining a deed and a Business Identification Number (NIB). Capital structure, investment planning, and compliance strategy must be designed as one integrated framework from the beginning.

PT PMA Paid Up Capital Reduced to IDR 2.5 Billion

The reduction of the minimum paid up capital from IDR 10 billion to IDR 2.5 billion opens opportunities for investor profiles that were previously unable to enter the Indonesian market, including:

• Foreign small and medium sized enterprises (SMEs)
• Technology startups
• Professional service businesses that operate with an asset light model

With this new framework, a PT PMA can be established with:

• A more realistic capital commitment in the early stage
• Greater flexibility in cash flow management
• Strategic alignment with Golden Visa and Investor KITAS residency schemes

To avoid misinterpretation among management and shareholders, the difference between paid up capital and investment value must be clearly understood.

Difference Between IDR 2.5 Billion Paid Up Capital and Investment Value Above IDR 10 Billion

The 2025 regulations introduce a Dual Layer Capital framework for PT PMA:

• Paid Up Capital: A requirement for company establishment
• Investment Value: A commitment to total investment realization

Comparison Table: Paid Up Capital and Investment Value

Component	Paid Up Capital	Investment Value
Minimum value	IDR 2.5 billion	More than IDR 10 billion per 5 digit KBLI classification
Main function	Requirement for establishing a PT PMA	Total project expenditure commitment until commercial operation
Form	Funds deposited into the company’s bank account	Capital expenditure and operational expenditure
Time of fulfillment	At or shortly after incorporation	Gradually, in line with the business plan, usually within 1 to 3 years
Role in OSS	Basis for validating NIB effectiveness	Basis for evaluating investment realization and LKPM reporting

Book Your Capital Structure Consultation

How The Capital Structure Works in Practice

Operationally, the mechanism works as follows:

• IDR 2.5 billion is deposited as the initial paid-up capital to establish the PT PMA
• The remaining commitment toward an investment value of more than IDR 10 billion does not need to be deposited in cash at the start

It is fulfilled gradually through real business expenditures, including:

• Salaries for management and professional staff
• Office lease and operational facilities
• Equipment and IT systems
• Software licences and professional services
• Pre operational and marketing activities

This structure allows investors to maintain a healthy cash flow, as long as expenditures are recorded and reported through the Investment Activity Report (LKPM).

Implementation of the 12 Month Lock Up Period

Under the current regulation, the paid up capital of IDR 2.5 billion is subject to a lock up period of 12 months from the date of deposit.

This policy prevents situations where capital is deposited only for licensing purposes and then immediately withdrawn by shareholders.

This means:

• The capital may not be transferred back to shareholders
• It may not be withdrawn without a legitimate business reason
• It must remain under the company’s control during the first 12 months

However, lock up does not mean that the funds are frozen.

The funds may be used to support genuine business activity, as long as every transaction is traceable and aligns with future LKPM reporting.

Permitted examples include:

• Operational expenses such as salaries, rent, and utilities
• Purchase of equipment and working assets
• Legal, tax, and professional advisory fees
• Development of facilities or initial infrastructure

Activities that may breach compliance include:

• Returning funds to shareholders
• Transferring funds to personal accounts without operational justification
• Transactions that cannot be reasonably explained in company records

All transactions will later connect to investment realization and LKPM reporting, which makes early planning of capital utilization essential.

To ensure investors feel confident about fund usability, XPND will guide you on how to properly utilize this capital for operational and strategic expenses, so your cash flow remains active while fully compliant with the lock-up requirements.

Golden Visa and Investor KITAS

Reforms in the investment regime are aligned with updates to Indonesia’s immigration framework, enabling PT PMA establishment to be directly connected to:

• The Golden Visa program, which provides a stay permit of 5 to 10 years for qualifying investors.
• The Investor KITAS program, which serves as an efficient residency option for shareholders who actively serve as directors or commissioners.

Both pathways are influenced by:

• The size and structure of share ownership
• The level of committed and realized investment
• The company’s compliance record in OSS and LKPM

Faster Licensing Certainty: Automatic Approval Mechanism

Government Regulation No. 28 of 2025 strengthens the Fiktif Positif, or deemed approval mechanism, which enables automatic approval of licence applications that require verification by technical agencies. The objective is to provide time certainty for investors, particularly in sectors with medium and high risk classifications.

In practice, each licence application submitted through OSS now has a processing time limit (Service Level Agreement or SLA) set by regulation. For example, certain licences must be processed within five working days.

If, by the end of that period:

• The technical agency has not provided a decision, and
• no formal rejection has been issued with stated reasons

then the licence will be automatically issued by the OSS system.

Licences issued through this mechanism remain legally valid and may be used by the company.

For investors, this significantly reduces uncertainty and delays that previously occurred due to manual administrative procedures.

However, it is important to note that:

• Even if a licence is issued automatically
• The submitted documents and data may still be audited after the licence becomes effective

Why XPND

Under the current regulatory environment, establishing a PT PMA is no longer a simple administrative process. Capital structure, business classification, OSS workflow, and investor residency planning are interlinked and must be designed from the beginning.

XPND acts as a strategic partner, guiding clients through a structured end to end process across four phases.

Phase 1: Pre Incorporation and Structural Design

We ensure that the legal and financial foundations of the company are prepared correctly before execution of the deed.

XPND provides:

• Business model analysis and selection of precise 5 digit KBLI codes.
• Mitigation of risks from incorrect KBLI selection that may increase capital requirements or restrict import access.
• Design of an efficient capital structure using IDR 2.5 billion of paid up capital.
• Preparation of the Investment Plan declaration in OSS, including capital expenditure, working capital, and operational facilities, structured to meet the > IDR 10 Billion investment threshold while remaining realistic and reportable in LKPM.

The objective is to ensure the company enters Indonesia with a capital structure that is safe for cash flow while still meeting investment realization standards required by regulators.

Phase 2: Legal Execution and OSS Integration

Once the structure is confirmed, we execute legal processes in alignment with government systems. Unlike common assumptions, the NIB is not issued immediately, and several prerequisite validations must be completed first.

This phase includes:

• Company Establishment
  Coordination of the deed of establishment and approval by the Ministry of Law and Human Rights.
• Tax Registration (NPWP)
  Issuance of the company’s NPWP prior to licensing integration.
• PKKPR Spatial Utilization Verification
  Before NIB issuance, we prioritize the Spatial Utilization Approval (PKKPR).

Through this stage, the OSS system verifies the company’s business location against the national digital zoning and spatial planning map. This is one of the most frequent bottlenecks where applications fail due to incorrect zoning selection.

XPND verifies zoning eligibility before clients sign a lease or secure office premises, helping avoid rejection risk and relocation costs.

Only after the location is confirmed as compliant through PKKPR does the NIB get issued and activated in OSS.

We explicitly align NPWP, PKKPR, and NIB issuance into a single coordinated workflow so the company enters the OSS ecosystem cleanly and without future licensing conflicts.

Phase 3: Licence Acceleration and Investor Immigration

In the early operational phase, our objective is to accelerate business activation while maintaining full compliance.

XPND supports clients by:

• Monitoring OSS licence processing and managing the deemed approval mechanism when required
• Preparing investment documentation for Investor KITAS or Golden Visa applications
• Ensuring that proof of capital and ownership structures remain consistent across OSS data and investment reports

This approach aligns business licensing and investor residency processing within one coordinated workflow.

Phase 4: Ongoing Compliance and Good Standing Status

Once the company becomes operational, the focus shifts to sustainable compliance.

Our services include:

• Quarterly submission of the Investment Activity Report (LKPM), recording progressive investment realization based on the figures declared in the OSS Investment Plan.
• Corporate secretarial support and General Meeting of Shareholders documentation.
• Tax compliance coordination to maintain corporate credibility before regulators.

This ensures that your PT PMA not only becomes successfully established, but also grows in a secure, transparent, and compliant position within Indonesia’s regulatory ecosystem.