15 Must-Know Frequent Asked Questions About PT PMA in Bali, Lombok and Sumbawa

Introduction: The Rise of Foreign Investment in Bali, Lombok, and Sumbawa

In recent years, Indonesia has seen a sharp rise in foreign investment across various sectors, with Bali, Lombok, and Sumbawa standing out as hotspots for international business ventures. From world-renowned tourism hubs to emerging eco-luxury destinations and untapped natural resource zones, these islands offer diverse and strategic opportunities for foreign investors.

To legally establish a business with foreign ownership in Indonesia, most investors choose to set up a PT PMA, or “Perseroan Terbatas Penanaman Modal Asing” (Foreign-Owned Limited Liability Company). A PT PMA allows foreign nationals and corporations to participate directly in Indonesia’s growing economy while remaining compliant with the country’s legal framework.

Bali continues to thrive as a hub for hospitality, wellness, and creative industries, while Lombok is attracting attention for its sustainable tourism and real estate developments. Sumbawa, on the other hand, is gaining traction with investments in mining, agriculture, and infrastructure.

This article answers the most frequently asked questions about PT PMA in Bali, Lombok and Sumbawa, guiding you through the essentials of legal setup, ownership structures, sector limitations, and key compliance tips every investor should know.

What Is a PT PMA and Why Do Foreigners Need It?

A PT PMA, or Perseroan Terbatas Penanaman Modal Asing, is a foreign-owned limited liability company recognized by the Indonesian government. This legal entity allows foreigners to legally own shares and operate a business in Indonesia under Indonesian law.

Foreign investors need a PT PMA to establish a formal presence in Indonesia, as it provides the necessary legal framework to conduct business activities, comply with local regulations, and protect their investments. Without a PT PMA, foreigners cannot legally hold shares in most business sectors or benefit from the protections and rights granted to companies in Indonesia.

In summary, a PT PMA is essential for foreigners who want to invest and run a business in Indonesia, ensuring legal compliance and operational legitimacy. Understanding the importance of PT PMA helps foreign investors navigate Indonesia’s business landscape smoothly.

Can Foreigners Fully Own a PT PMA in Bali, Lombok, and Sumbawa?

Foreigners can fully own a PT PMA in Bali, Lombok, and Sumbawa, but ownership depends on the business sector. Indonesia’s Negative Investment List (DNI) regulates which sectors allow 100% foreign ownership and which have restrictions.

For example, sectors like consulting and IT services commonly permit 100% foreign ownership through a PT PMA. However, other sectors such as travel agencies or retail often have limitations, requiring local partners or caps on foreign shares.

Understanding the Negative Investment List is crucial for foreign investors to know where they can fully own a PT PMA and where restrictions apply. This ensures compliance with Indonesian regulations and smooth business operations.

What Are the Minimum Capital Requirements?

For establishing a PT PMA in Indonesia, including Bali, Lombok, and Sumbawa, the standard minimum capital requirement is IDR 10 billion. Out of this, at least IDR 2.5 billion must be paid-up capital, meaning the amount actually deposited and used by the company.

Although the full capital amount does not need to be deposited all at once, the total investment must be clearly declared in the company’s documents to comply with Indonesian regulations. Proper capital structuring is essential to avoid future legal complications and ensure smooth business operations.

Foreign investors must pay close attention to these minimum capital requirements when setting up a PT PMA, as failure to meet or properly declare the capital can lead to regulatory issues. Understanding these requirements helps maintain compliance and protects the company’s legal standing in Indonesia.

What Licenses Are Needed to Operate a PT PMA in Bali, Lombok, and Sumbawa?

To legally operate a PT PMA in Bali, Lombok, and Sumbawa, obtaining the right licenses is crucial. The first and most important license is the NIB (Business Identification Number), which is issued through Indonesia’s OSS (Online Single Submission) system. The NIB serves as the primary business license for a PT PMA and allows the company to start operations.

Depending on the sector, additional sectoral licenses may be required. For example, businesses in tourism, property, or food and beverage (F&B) industries must obtain specific permits to comply with local regulations.

Besides these, a PT PMA must secure a Domicile Letter to confirm its official address, a Tax Identification Number (NPWP) for tax purposes, and register for BPJS (social security) for employees. Ensuring all these licenses and registrations are in place is essential for smooth, legal business operations in Indonesia.

How Long Does It Take to Register a PT PMA in Bali, Lombok, and Sumbawa?

Registering a PT PMA in Bali, Lombok, and Sumbawa typically takes around 4 to 6 weeks for a complete setup. This timeframe includes obtaining the necessary approvals, business identification number (NIB), and basic licenses through the OSS system.

However, the process may take longer if the business requires complex sectoral licenses or involves land permits, which often involve additional government agencies and extended verification. Delays can also occur due to incomplete documentation or regulatory changes.

Understanding the average registration period for a PT PMA helps foreign investors plan their business launch more effectively. Early preparation and compliance with all requirements can speed up the process and avoid unnecessary delays.

What Are the Most Common Mistakes Foreigners Make?

One of the most common mistakes foreigners make is relying on local nominee structures instead of establishing a proper PT PMA. While nominee arrangements might seem easier or cheaper, they carry significant legal risks and lack the protection and legitimacy that a PT PMA provides under Indonesian law.

Another frequent error is choosing the wrong KBLI (Indonesian Standard Business Classification) code when registering the PT PMA. Selecting an incorrect business code can lead to licensing problems, fines, or even forced business closure, as the KBLI code must match the actual business activities.

Additionally, many foreigners underestimate the importance of local customs and regulations, especially the Banjar system in Bali. Not understanding Banjar rules can cause conflicts with local communities and delays in permits or operations.

Lastly, failing to hire a qualified local legal advisor is a major mistake. A professional advisor familiar with Indonesia’s legal landscape helps ensure compliance, guides proper PT PMA setup, and prevents costly mistakes.

Avoiding these pitfalls is key to successful and smooth business operations in Indonesia.

Is It Better to Set Up a PT PMA in Bali, Lombok, or Sumbawa?

Choosing where to set up a PT PMA depends largely on your business sector and goals. Bali is the most established market, offering a well-developed infrastructure and vibrant tourism industry. However, it is also more saturated and heavily regulated, which can present challenges for new PT PMA businesses.

Lombok is an emerging luxury and tourism hub, attracting increasing government incentives aimed at encouraging foreign investment. Setting up a PT PMA in Lombok allows businesses to benefit from growth opportunities while enjoying supportive local policies.

Sumbawa offers greenfield opportunities in agriculture, mining, and eco-tourism. For investors looking to enter less crowded markets with significant potential, establishing a PT PMA in Sumbawa can be a strategic choice.

Each location has unique advantages, and selecting the right place for your PT PMA depends on your industry and long-term vision.

Can I Buy Land Through My PT PMA?

A PT PMA can acquire land rights such as HGU (Hak Guna Usaha or Right to Cultivate) and HGB (Hak Guna Bangunan or Right to Build) but cannot own land under Freehold (Hak Milik). This means foreign-owned companies like PT PMA have rights to use and develop land for specific periods but do not hold full ownership.

It is essential that the land use aligns with the business activities registered under the PT PMA. For example, agricultural land rights (HGU) must be used for cultivation, while HGB is commonly used for commercial or industrial purposes. Proper alignment ensures legal compliance and prevents future disputes.

Understanding these limitations helps foreign investors plan property acquisition through their PT PMA effectively, ensuring smooth operations within Indonesian law.

What Visas Are Tied to a PT PMA?

Once a PT PMA is officially established, foreign directors or investors can apply for a KITAS visa, which allows them to live and work legally in Indonesia. This director/investor KITAS is essential for managing the company’s daily operations.

For foreign employees hired by the PT PMA, a Work KITAS is required. This visa depends on obtaining an IMTA (work permit) and an RPTKA (manpower plan) approved by the Ministry of Manpower. These documents ensure that foreign workers are legally employed and that their presence aligns with Indonesia’s labor regulations.

Additionally, the PT PMA must register for a Tax Identification Number (NPWP) and enroll employees in BPJS, Indonesia’s social security system, as part of compliance with tax and employment laws.

Understanding these visa requirements tied to a PT PMA helps ensure legal workforce management and smooth company operations.

Can I Hire Foreign Employees Through My PT PMA?

Yes, you can hire foreign employees through your PT PMA, but it must be done through the proper legal procedures. The process starts with obtaining an RPTKA (Manpower Utilization Plan), which outlines the need for hiring foreign talent. Once approved, you must apply for an IMTA (Work Permit), followed by a KITAS (Temporary Stay Permit).

Hiring is generally limited to senior or specialist roles where local expertise may be limited, such as directors, managers, consultants, or technical experts. The Indonesian government prioritizes the employment of local workers, so your PT PMA must also commit to knowledge transfer and may be required to hire local counterparts.

Following the correct process ensures compliance with labor laws and smooth onboarding of qualified international staff.

What Are the Annual Compliance Obligations?

Every PT PMA in Indonesia must meet several annual compliance obligations to remain in good legal standing. These include annual tax reporting to the tax office, which covers corporate income tax and employee-related taxes.

Additionally, companies must submit the LKPM (Investment Activity Report) to BKPM to report progress and activities related to their approved investment plan.

Other obligations include keeping employee BPJS (social security) contributions up to date, updating Tax Identification Numbers (NPWP) if necessary, and renewing business licenses through the OSS system when required. Regular compliance helps avoid penalties and ensures business continuity.

How Much Does It Cost to Maintain a PT PMA in Bali, Lombok, and Sumbawa?

Maintaining a PT PMA in Bali, Lombok, or Sumbawa typically costs between USD 3,000 and USD 10,000 per year. These expenses include legal consultations, tax reporting, and accounting services. The actual cost depends on the size of the business, the number of transactions, and sector-specific compliance requirements.

For many foreign investors, hiring an outsourcing company to handle administrative, HR, and financial functions can reduce internal overhead while ensuring full compliance. This approach offers peace of mind and allows the PT PMA to focus on core business operations without navigating complex regulations alone.

Can I Sell or Transfer My PT PMA Later?

Yes, you can sell or transfer ownership of your PT PMA. Share transfers are legally allowed but must follow proper procedures to remain valid. This includes drafting a notarial deed of share transfer, obtaining approval from BKPM (the Investment Coordinating Board), and updating all relevant company documents such as the Articles of Association and business licenses.

It’s important to ensure that the buyer meets the legal requirements for owning shares in a PT PMA, especially if they are also a foreign national or entity. Proper documentation ensures a smooth and legally compliant transition.

Final Thoughts: Should You Start a PT PMA in Bali, Lombok, or Sumbawa?

Starting a PT PMA is the safest and most legally compliant way for foreigners to do business in Indonesia. Whether you choose Bali, Lombok, or Sumbawa depends on your industry, business goals, and risk tolerance. Bali offers a mature market with strong infrastructure but higher competition. Lombok presents growing opportunities in tourism and development, while Sumbawa remains ideal for greenfield investment in sectors like agriculture and mining.

Regardless of location, the long-term success of your PT PMA depends on proper setup, compliance with Indonesian regulations, and ongoing management. Working with experienced legal and business advisors is highly recommended to avoid common pitfalls and ensure smooth operations. If you’re serious about building a lasting presence in Indonesia, a well-structured PT PMA is the right foundation.