Procedure for setting up a PMA

[Toni]

Hi guys, me and my family are planning to move to Bali from Spain.
I am planning to set up a PMA there. Any idea of the requirements? It would be setting up a travel agency using contacts we have in Spain and south America. But I read the costs are quite elevated compared with the sort of business with have in mind.
Any advice would be very appreciated.
Thank you!!
Regards!!

 

[Bad_azz]

Do you have any links with Indonesia at all?
If so, maybe have a family member (Indonesian) set up the business for you & become a director/CEO (or something)
This will cut down on the initial capital investment you have to show.
If no ties to Indonesia, you will have to have a large amount of capital to show to do the required paperwork - I think you have to show at least $250,000 (a quarter of required, which is $1 million)
As this is Indonesia there are always loopholes and ways around the set requirements, knowing what to research is the important factor.

 

[Bad_azz]

This page will help you with more details.
Look at PT/PMA

Types of Companies in Indonesia of Interest to Expats

There are many forms of companies and incorporation in Indonesia. If certain conditions are met, expatriates can be involved in the creation of three types: ◦ Usaha Dagang (UD) ◦ Commanditaire vennootschap (CV) An expatriate who is married to an Indonesian citizen and who holds a KITAS/P...

www.expatindo.org

 

[Brian86]

you will have to have a large amount of capital to show to do the required paperwork - I think you have to show at least $250,000 (a quarter of required, which is $1 million)

I had heard this many times, but no explanation of how or when they ask to see that bank balance. I set up my PMA a couple years ago and have never been asked for a bank balance. You do need to submit to the investment board (BKPM) a business plan to reach 10 billion+ Rupiah and then you get your temporary business license (mine is 3 years, I think that's the norm). You must submit quarterly reports of qualified expenditures and turnover that their system keeps track of to see your progress, and when the 3 years deadline approaches they will evaluate if you have fulfilled your business plan (10 billion Rupiah). If you have fulfilled it, you get permanent business license and the reporting requirements are substantially less. If you have not fulfilled your business plan, one year extensions are often given, even multiple annual extensions (or so I hear).

(and the amounts are all in Rupiah, which with recent exchange rates is less than $740k USD total for the 10 billion rupiah)

 

[jstar]

If you want an import license for instance, you'd need the izin usaha tetap (permanent business license). So even when I understand why many wait for three years or longer and do not apply asap after they receive the initial izin prinsip, it generates a lot of overhead, leads to possible fines and creates other limitations.

 

[centurion]

There is no more Izin Prinsip for PMA, the licence is issued straight away and is permanent from the beginning.

 

[Brian86]

There is no more Izin Prinsip for PMA, the licence is issued straight away and is permanent from the beginning.

Wow, when did that change? Do you know what it means for companies still on Izin Prinsip (issued 2018)?

 

[centurion]

The new regulations were issued in mid-2018, and now all companies are registered trough OSS online system, where they get NIB and Busines licence (SIUP or some other kind).

Old Izin Prinsip(s) are valid till lapsing, but you can apply for new licence trough the new procedure straight away.

The licence trough OSS system is now permanent in most cases and is not connected to the fulfilment of the investment plan. The main change is that of licencing foreign and local companies are almost same.

 

[jstar]

But there's no change in capital statement and DOE, right?

 

[Bad_azz]

I believe the OP was asking about a travel agency, so I doubt he will need import licences.

Or are people classed as imports? hahaha, it wouldnt surprise me

Re the capital, good to know Brian86 as I was hoping others would chip in with more knowledge than me in this area.

 

[jstar]

There are other limitations such as other licenses that were not possible with the prinsip, and you also couldn't hire foreigners. (Which I've seen hired in NTT as local guides.)

 

[centurion]

The capital requirement is still minimum 2,5 bln Rp and investment plan of 10 bln Rp. LKPM reports are still required.

For tourist bureau you need a tourist business licence-TDUP, also done completely now online through OSS (at least for PMAs).

Under new regime, there are almost no more differences in employing foreigners in PMAs and PTs.

 

[legalestablishment]

Hi Toni, to set up a PT PMA, first you need to check your proposed business activities to the business classification code (KBLI), then further check the KBLI Code to negative list. If it is open for foreign investment, you can set up a PT PMA with at least 2 shareholders with the minimum capital requirements of IDR10 Billion. Alternatively, you can set up a local company using a financing arrangement with local people, I can help you with this arrangement. You can contact me by email: [email protected]