Minimum Capital Requirements in Indonesia for a Foreign-Owned Company (PT PMA)

What is the minimum capital to register a company in Indonesia? Does it all have to be paid up immediately upon incorporating a PT PMA company?

These are some of the most frequent questions foreign investors ask when considering opening a foreign-owned company (PT PMA) in Indonesia.

What is considered a foreign company in Indonesia?

First, let’s establish what a foreign company in Indonesia is.

Limited liability companies registered in Indonesia, regardless of capital structure, are called PT-s (perusahaan terbatas). If the PT company has any foreign ownership, it’s called a PT PMA, an LLC company with foreign ownership.

This is an important distinction. Having some local shareholders does not lower your company’s capital requirements unless it’s a 100% locally-owned company.

New Capital Requirements for PT PMA as of October 2025

The BPKM regulation Number 5 of 2025 has significantly reformed the financial requirements for foreign-owned companies (PT PMA). This new regulation effectively reduces the paid up capital requirement to IDR 2.5 billion from the previous IDR 10 billion.

Furthermore, it establishes a clear two-part structure that separates the total investment value from the minimum paid-up capital.

1. Minimum Total Investment Value: > Rp 10 Billion

According to Article 26, paragraph (2), a Foreign Investment Company (PT PMA) must have a total investment plan of more than Rp 10 billion (~ USD 600,000).

This amount excludes the value of land and buildings for most business sectors.

In a key exception to this general rule, the following business sectors are allowed to include the value of land and buildings as part of their >IDR 10 billion total investment plan:

• Property development (including construction, sales, and/or rental).
• Short-term and long-term accommodation services.
• Agriculture.
• Plantations.
• Livestock farming.
• Aquaculture.

2. Minimum Paid-Up Capital: Rp 2.5 Billion (~ USD 150,000)

The minimum paid up capital is the portion of the total investment that must be deposited into the company’s bank account.

According to Article 26, paragraph (10) of BKPM No 5 of 2025, The minimum paid-up capital for a PT PMA is at least Rp 2.5 billion (~ USD 150,000). This paid-up capital is considered a part of the Rp 10 billion total investment plan.

As per Article 27 of the regulation, the paid-up capital cannot be transferred out of the company’s bank account for a minimum of 12 months from the date of deposit. However, these funds can be used during this period for business purposes, including:

• Purchasing assets.
• Constructing buildings.
• Covering the operational needs of the business.

This is a significant change from the previous minimum capital requirement of IDR 10 billion, which was implemented in 2021.

The new rule is enforced through a self-declaration made in the Online Single Submission (OSS) system , and any violation will result in administrative sanctions.

Existing PT PMAs with IDR 10 billion in paid-up capital can apply for a capital structure amendment under the new regulation, reducing the requirement to IDR 2.5 billion. Contact Emerhub’s experts to initiate your capital amendment application.

Sector-Specific Investment Rules

The Regulation No 5 of 2025 also outlines important exceptions for how the minimum total investment value is treated in specific sectors.

While the investment is generally calculated per 5-digit KBLI code, it is applied more broadly for the following service industries:

• Wholesale Trade: The >Rp 10 billion investment is calculated per the first 4 digits of the KBLI code.
• Food and Beverage Services: The >Rp 10 billion investment is calculated per the first 2 digits of the KBLI code, per one location point (regency/city).
• Construction Services: The >Rp 10 billion investment is calculated per the first 4 digits of the KBLI code.

This exception allows companies in these specific service sectors to operate more flexibly, covering a wider range of related activities under a single, large investment commitment.

Capital requirements for different business classifications (KBLI) in Indonesia

There are industries where, by law, the minimum required capital is higher than 10 Billion IDR. Such as:

• Financial services
• Logistics and freight forwarding
• Construction
• Other capital-intensive industries

Reach out to Emerhub to find out the exact specifications for your business.

Changing the capital of the PT PMA company

Two common situations for changing capital are converting a locally owned company into a PT PMA (or vice versa) or increasing the capital of an existing company.

A. Converting a local company into a PT PMA

Before you start changing the company’s capital structure, be sure to know its current amount of paid-up capital and its business classification (KBLI).

You change the capital by issuing new shares. According to the law, you must offer the shares to the current shareholders first.

Then, a General Meeting Of Shareholders (GMS) needs to decide on the issuance of new paid-up capital and the allocation of shares. The GMS can also change the company’s business classification if needed.

You will also need to call a General Meeting of Shareholders if the capital amount stays the same but the company gets (partially) acquired by new shareholders.

B. Increasing capital of an existing PT PMA

The process is the same as for local companies – you add new shares, offer them first to existing shareholders, and then call a General Meeting of Shareholders.

Ways to reduce capital requirements of a PT PMA

While Indonesia may have higher capital requirements for foreign companies than many other countries, the size of the capital should not be seen as a cost. You will be able to invest that money into your local operations.

However, there are some situations where we recommend companies not to incorporate a PT PMA company, such as:

• You only need a company to hire employees
• You don’t want to put up that much capital because you want to test the market first
• You are planning to engage local partners only to reduce the capital requirements or get around foreign ownership restrictions.

If your primary reason for incorporating a company in Indonesia is to hire employees, using an employer of record is easier and less costly. That frees you from meeting the capital requirements and minimizes the local bureaucracy. Check out Employer of Record Service in Indonesia with RecruitGo for more information.

Lowering minimum capital requirements by using a Special Purpose Vehicle (SPV)

The primary reasons to set up a Special Purpose Vehicle is to either meet the local ownership threshold (for specific industries) or to lower the minimum capital.

However, smaller companies are sometimes taken aback by the capital requirements and decide to establish the company using a local nominee shareholder instead.

This is understandable, especially if you plan a lifestyle business that won’t generate significant revenue in the foreseeable future. But understand the risks of doing so as the local shareholder has complete control over your company and can leave you with nothing.

It happens often, especially if the local nominee is a family member or friend (or they deceive and their relatives inherit the business). It’s also not uncommon that the company becomes successful, and the local partner decides to reap the benefits without you.

Therefore, we only recommend using professional service providers and set up proper Special Purpose Vehicles where your assets are protected through a series of contracts.

You can book a free consultation with Emerhub experts to discuss your business needs. We will reach out to explain your options and handle the process on your behalf.