Poseidon Bali Property

FAQ

A PT PMA (foreign investment company) is the main gateway for international investors who want to do business legally in Indonesia. On this page, we answer the most common questions about why foreigners choose to set up a PT PMA, what advantages it offers compared to other options, and how it can support your long‑term plans in Indonesia.

Use this FAQ as a first guide, then contact us for tailored advice based on your specific business model and country of origin.

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is an Indonesian limited liability company that is (partly or fully) foreign‑owned. It is the official legal vehicle for foreign investors to do business and generate revenue in Indonesia.

Because a PT PMA gives you full legal standing in Indonesia. With a PT PMA, your company can:

  • Operate legally and comply with Indonesian laws
  • Sign contracts in the company’s name
  • Issue invoices in Indonesia
  • Open corporate bank accounts
  • Apply for business licenses in your sector

Operating informally (e.g., under a personal name or using a local nominee without structure) creates legal and tax risks.

Key benefits include:

  • Full legal access to operate in Indonesia in your permitted business fields
  • Same rights and responsibilities as local PT companies (within the foreign ownership rules)
  • Ability to hire foreign staff and sponsor work & stay permits (KITAS)
  • Possibility for foreign directors and commissioners
  • Opportunity to own assets (under the company’s name, such as lease rights, equipment, vehicles)
  • Easier to build partnerships with Indonesian and international clients who prefer dealing with a legal entity

In many sectors, a PT PMA can be 100% foreign‑owned.
In other, “restricted” sectors, foreign ownership may be capped (for example 67%, 49%, etc.) and you need an Indonesian partner.
The maximum foreign ownership depends on:

  • Your business activity (KBLI code)
  • Current regulations (e.g., Positive Investment List)

Before deciding, it is important to check whether your intended business field is open, conditionally open, or closed to foreign investment.

Compared to “unofficial” nominee structures, a PT PMA provides:

  • Direct control and transparency over your shares
  • Clear legal protection under Indonesian company law
  • Recognition by banks, clients, and authorities
  • Lower risk of future disputes with nominees or hidden partners

A properly structured PT PMA is safer and more sustainable for long‑term investment.

Yes. A PT PMA can:

  • Sponsor Working KITAS and Investor KITAS for foreign shareholders, directors, and foreign employees
  • Make it easier for you and your key staff to live and work legally in Indonesia
  • Support visa applications for dependents (spouse and children), depending on the visa type

This is one of the major practical benefits for foreign investors.

Yes. A PT PMA can:

  • Open corporate bank accounts in Indonesia
  • Receive and send payments in IDR and foreign currencies (subject to regulations)
  • Access local financing or services that are typically only available to registered companies
  • Make it easier for foreign investors to send capital and repatriate dividends (according to the law and tax rules)

Having a PT PMA:

  • Shows that your business is legally established and regulated
  • Increases trust with Indonesian partners, suppliers, and government agencies
  • Gives foreign clients comfort that they are dealing with a proper legal entity in Indonesia
  • Makes it easier to participate in tenders, B2B contracts, and formal procurement processes

A PT PMA is treated as an Indonesian tax resident company. Benefits include:

  • Clear framework for corporate income tax, VAT, withholding tax, etc.
  • Access to double taxation agreements (DTA) that Indonesia has with many countries (important for cross‑border payments and dividends)
  • Ability to structure your investment and profit repatriation in a compliant and tax‑efficient way with proper planning

Note: Specific tax advantages depend on your home country, industry, and financial structure. Always consult a tax advisor.

While foreign individuals face limits, a PT PMA can usually:

  • Hold long‑term lease rights (e.g., for offices, warehouses, shops, villas used for commercial purposes)
  • Own certain usage rights (e.g., Hak Guna Bangunan (HGB), under conditions and through proper structures)

This is often the preferred way for foreign investors to secure business premises in Indonesia.

Yes. A PT PMA is designed for:

  • Long‑term investment and growth
  • Adding new business activities (with license updates)
  • Opening branches or additional locations in Indonesia
  • Bringing in new shareholders or investors in the future

It is the standard form for serious, scalable foreign investment.

A PT PMA is especially beneficial for:

  • Foreign entrepreneurs/SMEs wanting a proper local presence
  • International companies expanding to Indonesia as a subsidiary or regional office
  • Investors in sectors like services, manufacturing, trading, digital/tech, tourism, education, logistics, and more (depending on regulations)

No. Indonesian law does not allow foreign individuals to hold Hak Milik (freehold) in their own name.
However, foreigners can legally control and benefit from property in Bali through:

  • Right to Build (HGB – Hak Guna Bangunan) via a PT PMA
  • Right to Use (Hak Pakai) under certain conditions
  • Long‑term lease agreements

Some investors also use local nominee structures for freehold, but these carry legal risk and must be approached with great care and professional advice.

HGB (Right to Build) allows a company (including a foreign‑owned PT PMA) to:

  • Build and use buildings on land for a long period (initially up to 30 years, extendable)
  • Legally develop villas, hotels, guesthouses, shops, offices, warehouses, etc.
  • Hold a right that is transferable, mortgageable, and extendable under Indonesian law

For many foreign investors, HGB via a PT PMA is the most secure and compliant way to own and operate property in Bali for commercial purposes.

Key benefits for investors include:

  • Capital appreciation: Bali’s prime areas (Canggu, Seminyak, Uluwatu, Ubud, etc.) have historically shown strong long‑term price growth.
  • Rental income potential: High tourism and digital nomad demand support good occupancy and attractive yields (if properly managed and licensed).
  • Bankability: HGB held by a company can often be used as collateral and is more easily recognized by banks and institutional buyers.
  • Resale flexibility: HGB can be sold or transferred, giving you an exit strategy.

While you cannot hold Hak Milik in your own name, you can:

  • Set up a PT PMA, which can hold HGB on land and fully own the building
  • Use Hak Pakai on top of freehold for residential use (subject to your stay permit and the rules)
  • Use long‑term leases (25–30 years or more, often with extension options) to secure long‑term use and income

The right structure depends on whether your main goal is lifestyle, rental income, or pure capital gains.

Investing in Bali property offers:

  • Access to a villa or residence in one of the world’s top lifestyle and tourism destinations
  • A base for semi‑retirement, remote work, or regular holidays
  • Ability to combine personal use + rental income when you are away (with a management company)

For many foreign investors, this “lifestyle + yield” combination is a major attraction.

Yes, depending on zoning:

  • In tourism or commercial zones, HGB is commonly used for villas, guesthouses, hotels, restaurants, co‑working spaces, etc.
  • In residential zones, structures must comply with local zoning and building rules.

Always check zoning (zoning map), IMB/PBG, and permits before committing to a purchase.

Using a PT PMA to hold HGB property gives you:

  • Legal clarity and compliance with foreign ownership rules
  • Ability to operate a rental business (e.g., villa, hotel, co‑living) and issue invoices legally
  • Possibility to sponsor work and investor visas (KITAS) for owners and key staff
  • Easier reinvestment, resale, and bringing in partners or new shareholders later

For serious investors, a PT PMA is often the most robust structure.

Yes, and they depend on your home country and structure. In general:

  • Rental income and capital gains are taxable in Indonesia
  • Indonesia has double taxation agreements (DTAs) with many countries, which can reduce withholding taxes on profit repatriation
  • Holding property via a PT PMA can simplify tax reporting and make your investment more transparent and bankable

Professional tax advice is strongly recommended before you invest.

Many investors choose Bali because of:

  • Strong tourism demand and a growing year‑round visitor base
  • Attractive yields in the short‑term rental market (if managed correctly and legally)
  • Relatively low entry prices compared to other global resort destinations
  • A unique mix of lifestyle, culture, nature, and community that supports long‑term demand

However, it is crucial to invest within the legal framework and with proper due diligence.

Typical steps include:

1. Define your goal: lifestyle, rental income, development, or long‑term capital gain.

2. Choose your legal structure: PT PMA (for HGB), Hak Pakai, or long‑term lease.

3. Conduct legal and technical due diligence: land certificate, zoning, access road, permits, building quality.

4. Work with a reputable notary (PPAT), lawyer, and tax advisor.

5. Plan your exit strategy (resale, refinance, or long‑term hold).