Indonesia reshaped its foreign investment framework through Minister of Investment Regulation (Permeninvest) No. 5 of 2025, effective 2 October 2025. The regulation reduced the PT PMA minimum capital (paid-up capital for a foreign-owned company) from IDR 10 billion to IDR 2.5 billion. Government Regulation (PP) No. 28 of 2025 on Risk-Based Business Licensing, which governs the OSS-RBA framework, came into force alongside it. Together, these two regulations form the legal foundation for PT PMA establishment in 2026.

The reform does more than ease entry. It changes how investors allocate resources, plan growth, and choose sectors, while Indonesia keeps tight regulatory discipline through OSS-RBA and periodic investment reporting. It does not, however, remove the obligation to plan a total investment of at least IDR 10 billion per business activity. Understanding how these two figures interact with licensing and visa eligibility is essential before registration begins.

Understanding the Three Capital Figures

One of the most common points of confusion is the difference between paid-up capital, authorised capital, and the total investment plan. These are three separate figures with distinct legal meanings.

The IDR 10 billion figure that often appears in other guides refers to the total investment plan, not the paid-up capital. Investors who confuse the two may over-capitalise unnecessarily, or under-plan and face compliance issues later.

Key Provisions of the New PT PMA Capital Requirement

Under Permeninvest No. 5 of 2025 and PP No. 28 of 2025, the revised PT PMA capital requirement includes the following:

• Minimum paid-up capital: IDR 2,500,000,000 (approximately USD 150,000) per company.
• Total investment plan: More than IDR 10 billion per business activity (KBLI code), per project location, excluding land and building value.
• Per-KBLI application: Each KBLI code carries its own IDR 10 billion plan. A company with two unrelated KBLI codes must plan for at least IDR 20 billion in total investment.
• Capital lock-in: Paid-up capital must remain in the company account for at least 12 months, unless used for verified operational purposes such as payroll, rent, or equipment purchases supported by invoices or contracts.
• Non-cash contributions: Paid-up capital may be contributed as non-cash assets (machinery, equipment, or intellectual property) if an independent appraiser certifies the valuation and it is documented in the Deed of Establishment. Land and buildings are excluded unless real estate is the primary business activity.
• Deposit timing: A capital statement letter (pernyataan modal) from shareholders is accepted at the Deed of Establishment stage. The actual cash deposit into a corporate Indonesian bank account happens after incorporation, once the NPWP (tax ID) is obtained.

Multi-KBLI planning note: If your business involves two or more distinct activities (for example, trading and manufacturing), each KBLI code needs its own IDR 10 billion investment plan. Selecting KBLI codes without a clear strategy can significantly raise your investment commitment and affect licensing timelines. See also: New KBLI OSS Regulations 2026.

Why Indonesia Lowered the Capital Threshold

The previous PT PMA minimum capital of IDR 10 billion was often cited as a disproportionate barrier, particularly for service businesses, digital companies, and SMEs with lower physical investment. The reduction reflects several policy goals:

• Attracting mid-scale and startup investors who previously found entry too costly.
• Aligning with ASEAN peers such as Vietnam and Thailand, where paid-in capital requirements are closer to USD 80,000 to 100,000.
• Encouraging productive capital deployment, so funds flow into operations and workforce development rather than sitting dormant in bank accounts.
• Advancing broader reform under the Job Creation Law, CEPA trade agreements, and the OSS-RBA risk-based licensing system.

According to the Ministry of Investment (BKPM), the reform balances investment inclusivity with legal discipline, keeping the market open while maintaining structured oversight through OSS-RBA and the LKPM reporting system.

Key Benefits for Foreign Investors

Lower entry barriers. With a PT PMA minimum capital of IDR 2.5 billion, investors can start at a smaller scale, test the market, and expand as confidence grows. This opens Indonesia to more foreign SMEs, consulting firms, tech startups, and service providers.

Greater flexibility and capital efficiency. Companies no longer need to immobilise large sums. Paid-up capital can fund operations, marketing, and local hiring, provided the use is documented and reported through the OSS-RBA system. Funding can also be structured through shareholder loans, reinvested earnings, and phased capital deployment.

Regional competitiveness. Indonesia now sits closer to ASEAN capital norms, narrowing the entry gap with regional peers. The comparison below reflects 2026 enforcement realities, including stricter application of the physical office requirement in Indonesia.

Local economic impact. The reform is expected to drive more project-based foreign investment, supporting job creation, skills development, and technology transfer through foreign-local partnerships.

Easier diversification and reinvestment. Existing PT PMA holders can restructure capital and add new business lines or cities without heavy liquidity pressure, provided each new KBLI code is backed by its own IDR 10 billion investment plan. This can speed up reinvestment cycles and support long-term FDI growth.

Capital rules and visa eligibility are not the same. A PT PMA with IDR 2.5 billion paid-up capital does not automatically qualify the founding investor for a 2-year Investor KITAS (Index 313/314). The personal share value held by the individual investor must still reach IDR 10 billion. Investors who fall short will typically apply for a Work KITAS in a Director or Commissioner role instead. Plan capital structure and visa strategy together.

Sectors That Benefit Most

The lower threshold opens opportunities in industries previously constrained by Indonesia’s high capital requirements.

Technology, Startups, and Digital Services

Smaller tech companies and digital service providers can now establish a foreign-owned company without a large upfront commitment. Under the reduced PT PMA minimum capital, startups can test the Indonesian market before full-scale expansion, deploy capital progressively against business milestones, and form local and regional partnerships more easily. SaaS firms, fintech startups, and digital consultancies benefit most, since they thrive on innovation rather than heavy infrastructure.

Food & Beverage and Retail Franchises

For food service activities, the investment plan is measured per business category (KBLI) per city, not per individual outlet. A restaurant chain or franchise group can therefore open multiple branches in one city under a single plan, rather than meeting the IDR 10 billion threshold for every location. This suits international franchises entering Indonesia, local-foreign partnerships seeking multi-outlet scalability, and investors testing regional markets before a national rollout. Combined with the lower PT PMA minimum capital, the sector is likely to attract more entrants from Singapore, Malaysia, and Thailand. Note that small-scale retail remains restricted for foreign ownership, so verify eligibility first.

Property, Hospitality, and Tourism

Tourism and property are regaining momentum, and the lower paid-up requirement eases the cash burden for resort and villa developers, boutique hotel and sustainable tourism operators, and long-term real estate investors. Land and building value is generally excluded from the total investment plan, with an exception where real estate is the primary business activity. The capital lock-in also does not apply to companies engaged in property construction and management. Confirm how your project will be classified before structuring capital.

Agriculture, Plantation, and Aquaculture

These capital-intensive sectors benefit from the lower paid-up threshold and from the option to contribute appraised machinery and equipment as non-cash capital. This encourages joint ventures in agritech and sustainable farming, investment in downstream food processing and export logistics, and plantation or fishery expansion using modern technology, with structured reporting keeping the activity accountable.

Manufacturing and Construction

Manufacturers and construction firms can run related activities under one PT PMA, such as multiple related product lines, design-build or EPC services, or renewable energy and EV facilities. Since each KBLI code still needs its own investment plan, choosing codes deliberately is what keeps one entity efficient rather than expensive.

Compliance Obligations Under the New Rules

A lower PT PMA minimum capital does not mean lighter oversight. Obligations under Permeninvest No. 5 of 2025 and PP No. 28 of 2025 are detailed and actively enforced. BKPM pairs flexibility with strict discipline so that capital translates into real economic activity.

Investment Realization Reporting (LKPM)

Foreign companies must file quarterly and annual reports (LKPM) through OSS-RBA, disclosing how funds are used and how the IDR 10 billion commitment is progressing for each KBLI code. PTSP offices in several regions have begun visiting PT PMA companies to verify LKPM compliance, and this is expected to intensify. See also: LKPM Report: A Complete Guide.

Capital Lock-In

The IDR 2.5 billion paid-up capital must stay in the company account for at least 12 months unless used for legitimate, documented operational purposes. This does not apply to PT PMA companies engaged in property construction and management. Read more: Why Compliant Paid Up Capital Is Key.

Physical Office Requirement

As of 2026, BKPM and PTSP enforcement is tightening. PT PMA companies in high-risk sectors and certain consultancy classifications now need a physical office with a verified building permit (PBG), as virtual offices are no longer universally accepted. Confirm your sector’s requirements before committing to an office arrangement.

Consequences of Non-Compliance

BKPM enforces the rules through digital monitoring and cross-referenced reporting. If capital realization or financial documents do not match OSS and LKPM data, or if you fail to align with the PT PMA capital requirement, consequences may include:

• Written warnings (up to four, each with a 30-day interval)
• Temporary suspension of business activity or business licences through OSS
• Administrative fines
• Enforcement action by authorised non-police officers
• Revocation of business licences, import or tax facilities, or investment incentives
• Possible deregistration of companies deemed inactive or non-compliant
• Banking scrutiny from OJK or Bank Indonesia if capital movements look inconsistent
• Audit exposure where declared investment differs from actual fund use

Sanctions may be applied sequentially or directly, depending on severity. The government’s stance is clear: the IDR 2.5 billion minimum exists to facilitate genuine investment, not speculative registration.

The Risk of “Briefcase Companies”

Some investors may set up companies only to hold assets or licences without real operations. Permeninvest No. 5 of 2025 is also designed to activate dormant PT PMA companies, and monitoring and capital injection obligations apply to existing holders, not just new registrations. Misuse can lead to reclassification or revocation by BKPM, reputational damage and possible blacklisting from future licensing, and complications in tax audits and financial reviews.

To stay protected, make sure the Deed of Establishment, Capital Statement Letter, and Articles of Association are up to date, reflect the new PT PMA capital requirement, and are validated by a notary and the relevant authorities.

Points to Weigh Before You Commit

• The IDR 10 billion total investment plan per KBLI code remains one of the higher thresholds in ASEAN, and may be hard to justify for less capital-intensive businesses.
• Some sectors (such as logistics, distribution, media, and small-scale retail) remain restricted or capped for foreign ownership regardless of the capital reform. Verify ownership limits before committing.
• As more small and medium foreign entities enter, scrutiny of substance requirements and LKPM accuracy is expected to increase.

How to Register a PT PMA Under the 2026 Rules

Registration runs through the Online Single Submission (OSS-RBA) system, and the typical end-to-end timeline is four to six weeks. See the full PT PMA registration requirements for detail.

1. Company name reservation. Reserve a unique three-word Indonesian company name through the Kemenkumham online system.
2. Deed of Establishment. A notary drafts the bilingual (Indonesian and English) deed covering shareholder details, KBLI codes, investment plan value, and the capital statement letter. No deposit is needed yet.
3. Legal entity ratification. The Ministry of Law and Human Rights (Kemenkumham) approves the company as a legal entity.
4. Tax ID (NPWP) registration. Register with the Directorate General of Taxes.
5. Business Identification Number (NIB). Obtained through OSS-RBA, the NIB serves as the primary business licence, and sector-specific permits link to it.
6. Sector-specific licences. Depending on your KBLI codes, further permits may be needed from relevant ministries or agencies.
7. Bank account and capital deposit. Once the NPWP is issued, open a corporate bank account and deposit the IDR 2.5 billion. The 12-month lock-in starts here.

Document checklist

• Passport copies of all shareholders, directors, and commissioners
• Proof of address for all foreign individuals involved
• Proposed company name (three words, in Bahasa Indonesia)
• Selected KBLI codes for each planned activity
• Total investment plan value per KBLI code (excluding land and buildings)
• Authorised, issued, and paid-up capital figures
• Registered office address in Indonesia (virtual or physical, depending on sector)
• Power of attorney if a representative handles registration (recommended)

Strategic Takeaways for Investors

• Start lean, scale responsibly. Use the lower entry cost to test the market before large-scale investment.
• Choose KBLI codes deliberately. Each code adds its own IDR 10 billion investment plan.
• Document every transaction. Keep financial statements, OSS entries, and LKPM submissions consistent.
• Plan visa and capital together. Paid-up capital alone does not secure an Investor KITAS.
• Plan long-term compliance. Treat reporting as an ongoing investment in your credibility and eligibility for incentives.

Indonesia’s PT PMA minimum capital reform is a significant step toward a more open, efficient, and competitive economy, but it raises the bar for operational discipline. The key to success is smart entry and consistent reporting.

Build Your PT PMA on a Compliant Foundation

Company registration in Indonesia is about designing a foundation that aligns your capital, KBLI codes, and long-term visa requirements from day one. Business Hub Asia supports foreign investors from corporate structuring through to operational readiness, including company registration, HR establishment, payroll outsourcing, tax consulting, LKPM reporting, and investor work permit management.

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