13 Steps to Setup a PMA in Bali
13 Steps to Set Up a PMA in Bali
Bali has become a hotspot for entrepreneurs and investors looking to tap into Indonesia’s booming economy. One of the most common ways to establish a business here is through a PMA (Penanaman Modal Asing), or Foreign Investment Company. Setting up a PMA in Bali can seem complex, but with the right guidance, it’s very doable. Here’s a step-by-step guide to help you navigate the process smoothly.
1. Determine Your Business Type
Before diving in, you need to decide the kind of business you want to run in Bali. Indonesia has a “Negative Investment List,” which restricts certain business sectors for foreign investment. Check to see if your business is eligible for a PMA. Common fields include hospitality, tourism, and creative services.
2. Get a Local Partner (If Required)
In some industries, you may need a local partner because of ownership restrictions. Having a trusted local business partner can also help navigate cultural and legal intricacies.
3. Decide on the Investment Amount
Indonesia’s laws require foreign investors to meet a minimum investment amount, which is usually USD 700,000, with a paid-up capital of at least USD 175,000. Make sure you’re clear on these figures before moving forward.
4. Choose Your Business Location in Bali
Once your business plan is clear, decide where in Bali you’d like to base your operations. Depending on your type of business, it could be in tourist-centric areas like Seminyak or Ubud, or perhaps somewhere more rural.
5. Prepare the Required Documents
You will need to prepare several documents to set up your PMA:
- Passports of all foreign investors
- Proof of investment
- Business plan
- Company name options (ensure it’s unique and compliant with Indonesian regulations)
- Lease or ownership documents for business premises
6. Register Your PMA Online (OSS System)
Indonesia has simplified the business registration process through its Online Single Submission (OSS) system. You’ll need to create an account and submit your application online. This platform centralizes the process, making it quicker and more efficient to get approvals.
7. Get Your Business Identification Number (NIB)
After registering your PMA through the OSS system, you will receive a Nomor Induk Berusaha (NIB), or Business Identification Number. This number is crucial as it acts as your business’s ID in Indonesia.
8. Obtain Business Licenses
Depending on the nature of your business, you may need specific licenses. For example, restaurants need food handling permits, and tourist businesses may require special tourism licenses. These licenses can also be obtained via the OSS system.
9. Set Up a Local Bank Account
Once your PMA is legally established, you need a local Indonesian bank account to manage transactions. It’s essential for paying taxes, handling payroll, and receiving payments from customers. Choose a reliable bank that offers robust services for foreign business owners.
10. Hire a Local Notary
A local notary is crucial for drafting legal documents, such as your Deed of Establishment. This notary will register the deed with the Ministry of Law and Human Rights to officially establish your PMA.
11. Pay the Required Capital
Once the company is set up, you will need to pay in your minimum required capital. This should be deposited into your newly created bank account and must be reported to the government as part of the PMA setup process.
12. Register for Tax (NPWP)
You must register for a Taxpayer Identification Number (NPWP) for both the company and any foreign directors. Indonesia has a complex tax system, so it’s often a good idea to hire a local tax consultant to ensure you’re compliant with all regulations.
13. Apply for Work Permits (KITAS)
If you or any foreign employees will be working in Bali, you’ll need to apply for a KITAS (temporary stay permit). This allows foreigners to live and work in Indonesia legally. The process is detailed and requires specific documentation, so hiring a local agent can be helpful.
