No. PT PMDN is strictly for Indonesian nationals and entities.
Thinking of starting a business in Indonesia? You’ve likely heard of two major business entity types: PT PMA (Foreign Investment Company) and PT PMDN (Domestic Investment Company). But what’s the real difference between them? Which one suits your business goals, budget, and structure? In this comprehensive guide, we break down everything you need to know from a legal, practical, and strategic perspective — under the Indonesian legal framework.
Key Takeaways
PT PMA stands for Perseroan Terbatas Penanaman Modal Asing. It is a limited liability company established by foreign individuals or entities for conducting business in Indonesia.
Legal basis: Law No. 25 of 2007 on Capital Investment, along with Government Regulation No. 5 of 2021 and the Positive Investment List (PR 10/2021).
PT PMDN stands for Perseroan Terbatas Penanaman Modal Dalam Negeri. It is a domestically owned limited liability company, formed exclusively by Indonesian nationals or entities.
Legal basis: Law No. 40 of 2007 on Limited Liability Company and Law No. 25 of 2007.
| Aspect | PT PMA | PT PMDN |
| Ownership | Foreign (≥1%) | 100% Indonesian |
| Joint Ventures | Allowed | Not applicable |
PT PMA: IDR 10 billion minimum with IDR 2.5 billion paid-up.
PT PMDN: As per business scale; no fixed national requirement.
BKPM (Indonesia Investment Coordinating Board)
Foreign investment must be registered and approved by BKPM, which evaluates business sectors, shareholding, and compliance.
OSS (Online Single Submission) System
Both PT PMA and PT PMDN must be registered through the OSS system, introduced by Government Regulation No. 5 of 2021.
Both entities are subject to Indonesia’s standard corporate income tax (22%). However:
PT PMA must comply with international tax treaties (P3B) and face higher compliance checks from the tax office (KPP Badan and KPP PMA).
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Each foreign worker must obtain a Work Permit (IMTA) and a KITAS (limited stay permit). PT PMDN generally cannot employ expatriates unless special exceptions apply.
As a law firm that has advised hundreds of clients, both foreign and local, we often get asked:
“Can I register a PT PMA just to get KITAS?”
Technically yes — but regulations demand real capital injection and operational intent. Regulators now monitor fake or inactive PMA companies closely. You need proper guidance to avoid red flags and stay compliant.
We help our clients structure, document, and register both PT PMA and PT PMDN in a legally sound and tax-efficient manner.
Setting up a business in Indonesia is a smart move — but you need to understand the legal identity you’re adopting. PT PMA offers access to foreign investors, while PT PMDN is reserved for domestic players. Choose the right vehicle, comply with the law, and make your investment worthwhile.
Contact Kusuma & Partners Law Firm today — your trusted legal partner for company setup, licensing, and corporate compliance in Indonesia.
“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”
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