Foreign companies in Indonesia operate through a locally incorporated PT PMA (foreign-investment limited liability company) whenever they want to earn revenue. Representative offices such as a KPPA or KP3A may only carry out non-commercial work. A PT PMA currently needs at least IDR 2.5 billion of paid-up capital and planned investment above IDR 10 billion per business line per location.
What counts as a foreign company in Indonesia?
A foreign company in Indonesia is a business whose shares are wholly or partly held by foreign individuals or entities; regulators classify its activity as foreign direct investment (PMA).
Article 5(2) of Law No. 25 of 2007 on Investment requires foreign investment to take the form of a limited liability company established under Indonesian law and domiciled in Indonesia. The current BKPM regulation repeats that rule: a domestic company (PMDN) becomes a PMA company once part or all of its shares pass to a foreign party, which then drives minimum capital, permitted business lines and reporting.
Which well-known foreign companies operate in Indonesia?
Examples include Unilever Indonesia, HM Sampoerna, Bank Danamon, Astra International and Toyota Motor Manufacturing Indonesia, each operating through an Indonesian PT controlled by a foreign group.
Public facts from official company or group websites; not a ranking, and none is presented as a JCSS Indonesia client.
| Company in Indonesia | Entity form | Controlling shareholder / group | Group home country |
|---|---|---|---|
| PT Unilever Indonesia Tbk | Listed, IDX: UNVR | Unilever Indonesia Holding B.V. (Unilever) | United Kingdom |
| PT HM Sampoerna Tbk | Listed, IDX: HMSP | PT Philip Morris Indonesia (Philip Morris International) | United States |
| PT Multi Bintang Indonesia Tbk | Listed, IDX: MLBI | Heineken group | Netherlands |
| PT Indocement Tunggal Prakarsa Tbk | Listed, IDX: INTP | Heidelberg Materials AG | Germany |
| PT Bank Danamon Indonesia Tbk | Listed bank, IDX: BDMN | MUFG Bank, Ltd. | Japan |
| PT Bank OCBC NISP Tbk | Listed bank, IDX: NISP | OCBC Overseas Investments Pte. Ltd. | Singapore |
| PT Astra International Tbk | Listed, IDX: ASII | Jardine Cycle & Carriage Limited | Singapore |
| PT Vale Indonesia Tbk | Listed, IDX: INCO | Jointly controlled by MIND ID and Vale Canada Limited | Indonesia and Canada |
| PT Toyota Motor Manufacturing Indonesia | Private PT PMA | Toyota Motor Corporation | Japan |
| PT Nestlé Indonesia | Private PT PMA | Nestlé S.A. | Switzerland |
| PT Samsung Electronics Indonesia | Private PT PMA, plant in Cikarang | Samsung Electronics | South Korea |
The pattern is consistent: a foreign group owns an Indonesian PT, listed or private; Vale Indonesia adds joint control with a state-owned holding company. For cross-border groups, see our Indonesian article on multinational companies in Indonesia.
Which legal forms can a foreign company use?
A foreign company can use a PT PMA for commercial activity, or a representative office (KPPA, KP3A or a sector-specific office) for non-commercial activity. Its presence may also create a permanent establishment (BUT) for tax.
| Form | Legal status | May it earn income in Indonesia? | Typical use |
|---|---|---|---|
| PT PMA | Indonesian legal entity | Yes, within its KBLI codes and licences | Manufacturing, trading, services |
| KPPA | Extension of the foreign parent | No | Supervision, liaison, preparing a PT PMA |
| KP3A | Representative of a foreign trading company; needs NIB and SIUP3A via OSS | Limited, under Ministry of Trade rules | Marketing representation |
| BUT (permanent establishment) | Tax concept, not a corporate form | Taxed like a company | Foreign contractors with a fixed presence |
Article 270 of Minister of Investment and Downstreaming/Head of BKPM Regulation No. 5 of 2025 limits a KPPA to supervising, liaising and coordinating for its parent or affiliates, or preparing a PT PMA. It must sit in an office building in a provincial capital, must not seek Indonesian-source income, and its head must reside in Indonesia. A KP3A also needs a SIUP3A issued through OSS (Article 271). See our guide to the representative office in Indonesia.
A BUT is a tax category: the Directorate General of Taxes treats a permanent establishment like a corporate taxpayer, so even project-based foreign specialists warrant a treaty review.
What is the minimum capital for a PT PMA in 2026?
A PT PMA needs paid-up capital of at least IDR 2.5 billion and investment above IDR 10 billion per five-digit KBLI per location, excluding land and buildings.
These rules come from Minister of Investment and Downstreaming/Head of BKPM Regulation No. 5 of 2025, promulgated on 2 October 2025, which revoked BKPM Regulations No. 3, 4 and 5 of 2021.
| Requirement | Position as of October 2026 | Basis |
|---|---|---|
| Minimum issued/paid-up capital | IDR 2.5 billion per PT | Art. 26(10) |
| Minimum investment value | Above IDR 10 billion per 5-digit KBLI per location, excluding land and buildings | Art. 26(2) |
| Calculation exceptions | Wholesale trade and construction per first 4 KBLI digits; food and beverage services per first 2 digits per location | Art. 26(3) |
| Capital lock-in | Stays in the company account for at least 12 months, except for assets, construction or operations | Art. 27(1) |
| Investment activity report (LKPM) | Quarterly, by the 15th of the following month, for medium and large businesses | Art. 286 |
Property, accommodation and agricultural activities count land and buildings. Foreign ownership limits follow Presidential Regulation No. 10 of 2021 as amended by Presidential Regulation No. 49 of 2021.
How do you set up a PT PMA through OSS?
Sign a notarial deed, obtain Ministry of Law approval, then register on the risk-based OSS system for a business identification number (NIB) and any risk-based licences.
Licensing runs under Government Regulation No. 28 of 2025, which replaced Regulation No. 5 of 2021 on 5 June 2025.
- Check the business line. Choose the KBLI code and confirm it is open to foreign investment. KBLI 2025 was issued by BPS Regulation No. 7 of 2025, and the government has confirmed the transition needs no new licences.
- Legalise shareholder documents, by apostille or through an Indonesian mission.
- Sign the deed of establishment before a notary and obtain approval through the Ministry of Law's AHU system.
- Register on OSS for the NIB, filling in activity data carefully; see our OSS business activity description guide.
- Meet risk-based licensing. Low-risk activities need only the NIB; medium- and high-risk activities need a standard certificate or licence. Our guide to the company registration number in Indonesia explains how the NIB relates to other identifiers.
- Pay in capital and activate tax obligations: corporate tax ID in Coretax, bank account and BPJS.
- File the LKPM every quarter.
When should a foreign company choose a PT PMA over a representative office?
Choose a PT PMA if you will sell, manufacture or invoice in Indonesia; choose a representative office if you are still testing the market and will not transact.
Many groups start with a KPPA and incorporate once the model is clear, provided the office never signs sales contracts or bills customers. For structuring, incorporation and early compliance, see our PT PMA setup service for foreign investors.
Frequently asked questions
Can a foreign company open a direct branch in Indonesia?
Generally not. The Investment Law requires foreign investment to take the form of a limited liability company established under Indonesian law. A foreign company wanting a presence without a PT can only open a representative office, such as a KPPA or KP3A, which may not seek income in Indonesia.
What is the minimum paid-up capital for a PT PMA now?
Under Minister of Investment and Downstreaming/Head of BKPM Regulation No. 5 of 2025, a PT PMA needs issued and paid-up capital of at least IDR 2.5 billion. Its investment plan must exceed IDR 10 billion per five-digit KBLI per project location, excluding land and buildings.
What is the difference between a PT PMA and a KPPA?
A PT PMA is an Indonesian legal entity that may trade within its KBLI codes and licences. A KPPA is an extension of the foreign parent acting as supervisor, liaison, coordinator or preparer of a future PT PMA. It may not earn income, buy or sell commercially, or help manage Indonesian companies.
Do foreign companies in Indonesia have to use KBLI 2025?
KBLI 2025 was issued through BPS Regulation No. 7 of 2025 and is being applied in risk-based licensing. A joint circular of the Ministry of Investment and Downstreaming/BKPM, the Ministry of Law and BPS confirms that businesses do not need new licences. BPS has published a KBLI 2020 conversion table.
Can a foreign company without a PT still be taxed in Indonesia?
Yes. If a foreign company carries on business through a fixed place, staff or a project in Indonesia, its presence may be a permanent establishment (BUT). A BUT is taxed like a corporate taxpayer and must meet Indonesian tax obligations. Whether one exists depends on the facts and on the tax treaty between Indonesia and the company's home country.
General information only, not legal or tax advice for your specific facts. Regulations change; confirm the current position with JCSS Indonesia before acting.