Buy or Build: Acquiring an Existing Indonesian Company vs Establishing a New PT PMA

Introduction: Two Roads Into Indonesia

Indonesia is Southeast Asia’s largest economy. For Vietnamese investors, it offers a large consumer base and growing supply chains. Once you decide to enter, one question comes first: should you buy a company that already exists, or set up a new one?

This guide compares both paths in plain terms. It explains the legal steps, the costs, the risks and the situations where each option makes sense. For a wider view of entity types, see our guide to foreign company registration options in Indonesia.

What Each Path Means

Building: a new PT PMA

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a limited liability company with foreign shareholders. It is the main way for foreigners to run a business and earn revenue in Indonesia. You create it from scratch: choose a name, sign the deed of establishment, register with the Ministry of Law, and apply for a business ID through the OSS system. You can compare it with other forms in our overview of business structures for foreign investment in Indonesia.

Buying: an existing company

Most acquisitions are share deals. You buy the shares of a company that already exists. The company stays the same legal entity, so its licenses, contracts, staff and debts stay with it. A second option is an asset deal, where you buy only selected assets and leave most liabilities behind. Asset deals are cleaner, but licenses and contracts often do not transfer with the assets.

If the target is a local PT owned by Indonesians, it must become a PT PMA once a foreign party buys shares. That means updating the articles of association, the OSS data and the investment records. Ask your adviser to confirm the exact steps for your deal.

Build vs Buy: Side-by-Side View

Capital and Cost Rules

Since October 2025, the minimum issued and paid-up capital for a PT PMA is IDR 2.5 billion, under Investment Minister/BKPM Regulation No. 5 of 2025. The total investment plan must still be above IDR 10 billion, not counting land and buildings. This is usually assessed per five-digit business code and per project location, and some sectors use broader groupings. Some sectors also need more capital.

These rules matter for buyers too. Even if you buy a small local company, the PT PMA investment and capital rules still apply after conversion. Do not assume a cheap purchase price means a cheap entry. Our guide to KBLI business codes explains why the number of activities changes your investment amount.

When Buying Makes Sense

• You need to start selling fast, and the target has staff, customers and a working license.
• The target holds a permit that is slow or hard to obtain.
• You want an existing brand, supplier network or distribution channel.
• You plan to enter a market where local relationships decide success.

Buying works best when the target is small, its records are clean and the seller is willing to give strong warranties. Still, check that its activities are open to foreign ownership under the Positive Investment List.

When Building Makes Sense

• You want a clean structure with no past liabilities.
• Your business model is new, and no good target exists.
• You need to pick your own activities, location and team.
• You want to avoid disputes with sellers or minority shareholders.

Building is also simpler to plan. The steps are known: name approval, deed, tax ID, OSS registration and a bank account. See our 14-day company registration guide for the process, and our guide on opening a corporate bank account for a PT PMA for the step that follows.

How an Acquisition Works

A typical purchase follows these steps:

1. Sign a letter of intent or MoU with exclusivity and confidentiality terms.
2. Run legal, tax and financial due diligence on the target.
3. Negotiate and sign the share purchase agreement, with warranties and price protections.
4. Obtain shareholder approval at a General Meeting of Shareholders (RUPS) and any needed third-party consents.
5. Sign the notarial deed of share transfer and register the changes with the Ministry of Law.
6. Update OSS, tax and beneficial ownership records, and convert to PT PMA status if needed.
7. Check whether the deal must be notified to the competition authority (KPPU) if size thresholds are met.

Advisers report that a conversion can take roughly 25 to 40 working days across BKPM, Ministry of Law and OSS steps, though timing varies by case. Always confirm current timelines with your adviser.

Due Diligence: Where Deals Fail

Records in many Indonesian companies are thin. Some do not keep a proper share register, even though the law requires one. That is why checks must go beyond what the seller shows you.

• Legal: deed, articles, ownership chain, share register and board appointments.
• Licenses: whether the NIB and KBLI codes match what the company really does. Our guides on the [NIB](https://ezpzindonesia.com/what-is-nib-in-indonesia/) and [business licenses and permits](https://ezpzindonesia.com/business-licenses-permits-indonesia/) show what valid papers look like.
• Tax and finance: filings, unpaid taxes, bank loans and related-party deals.
• People: employment contracts, social security (BPJS), and any expatriate permits.
• Assets: land titles, liens and contracts with change-of-control clauses.

Use the findings to lower the price, hold back part of the payment, or require the seller to fix problems before closing.

Governance After Closing

After you own the shares, you must set up the board. Every PT needs at least one director and one commissioner, and a PT PMA needs at least two shareholders. At least one director must live in Indonesia. Our guide to the roles of directors and commissioners explains who does what. In an acquisition, you may need to replace board members at a shareholder meeting.

Plan Your Entry With Expert Help

Both paths can work. The right one depends on your timeline, budget, sector and risk appetite. A short review of your plan can save months and avoid expensive mistakes.

Ready to choose? Book a company establishment consultation: Get a quote from EZPZ Indonesia.

Sources and Notes: Regulatory points were checked against public legal guides on Indonesian M&A and PT PMA capital rules, including BKPM Regulation No. 5 of 2025 and Company Law No. 40 of 2007. Rule