Client Alert · Foreign Direct Investment · Corporate · Licensing · Prasetyo Law Office · Updated 14 August 2026
A limited liability company (PT) is a legal-entity form. Domestic investment (PMDN) and foreign investment (PMA) are investment classifications based on the source of capital, not two separate corporate forms.
1. Establishing the legal entity
A capital-association limited liability company is generally established by two or more parties, subject to the express statutory exceptions. The founders execute a deed containing the Articles of Association, establish the capital and corporate organs, and obtain Ministerial approval through AHU.
A shareholders’ agreement is optional and is not a statutory condition for incorporation. It may regulate governance, reserved matters, share transfers, funding, deadlock and exit, but it does not replace the deed, Articles of Association or mandatory law.
2. PMDN and PMA status
A company has PMA status where foreign capital participates in the company within the meaning of Indonesia’s investment framework. Before the structure is fixed, investors should review the business-field framework under Presidential Regulation No. 10 of 2021, as amended by Presidential Regulation No. 49 of 2021, sectoral rules and applicable licensing requirements.
A PMA business is generally classified as a large enterprise. Under Minister of Investment/BKPM Regulation No. 5 of 2025, investment generally must exceed IDR10 billion per five-digit KBLI code per project location, subject to the exceptions and calculation methods in Article 26. Minimum issued and paid-up capital is generally IDR2.5 billion per company unless sectoral rules provide otherwise.
3. KBLI and risk-based licensing
Every business, whether PMDN or PMA, must select KBLI codes that match its actual activities and assess the risk level, basic requirements, sectoral licences and relevant PB UMKU. A business-field review is not optional for PMDN; PMA requires the additional review of foreign-ownership restrictions and investment requirements.
An NIB is a business registration number and identity. For low-risk activities it may constitute business legality. For other risk levels, operational authority depends on the required Standard Certificate, Licence, verified requirements and/or Business Licensing to Support Business Activities (PB UMKU).
4. Initial documents and compliance
- shareholding structure, source of capital and beneficial owners;
- company name, purposes, KBLI, capital, directors and commissioners in the deed;
- AHU approval and shareholder-register administration;
- tax registration, NIB, risk-based and sectoral licences;
- beneficial-ownership reporting and corporate-data updates;
- LKPM reporting according to the applicable stage and business scale; and
- filing evidence of annual-report approval through SABH for capital-association limited liability companies under Minister of Law Regulation No. 49 of 2025.
Conclusion
Establishing a PT requires more than obtaining a deed and an NIB. The investment status, KBLI, ownership restrictions, capital, licences, AHU/OSS records and first-year compliance calendar should be aligned from the outset.
Primary sources: Indonesian Company Law; Government Regulation No. 28 of 2025; Presidential Regulation No. 10 of 2021 as amended by Presidential Regulation No. 49 of 2021; Minister of Investment/BKPM Regulation No. 5 of 2025; Minister of Law Regulation No. 49 of 2025.
Disclaimer: This article provides general legal information and is not a legal opinion for any specific structure or business activity.
Prasetyo Law Office
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