If you are a foreign investor looking to do business in Indonesia, a private limited company, known locally as Perseroan Terbatas (PT), is the most common and trusted legal structure available. It gives your business a separate legal identity, limits personal financial risk, and opens doors to one of Southeast Asia’s largest and fastest-growing economies.
This guide walks you through everything you need to know: what a PT is, the two main types, how it compares to a public company, and the exact steps to register one in Indonesia.
A Closer Look at Private Limited Companies
A private limited company (PT) in Indonesia is a legal entity where each shareholder’s liability is limited to the value of their investment. That means your personal assets stay protected if the company takes on debt or faces legal issues. The PT structure is governed by Law No. 40 of 2007 on Limited Liability Companies, which was later updated by the Job Creation Law (Omnibus Law) in 2020 to streamline business requirements and attract more foreign capital.
Unlike a sole proprietorship or partnership, a PT is treated as its own legal “person.” It can own property, sign contracts, and sue or be sued, all in its own name. This separation between personal and business assets is one of the main reasons foreign investors choose this structure when entering the Indonesian market. Because of this, the PT is the preferred entity for serious, long-term business operations in Indonesia.
Types of Private Limited Companies in Indonesia
In Indonesia, there are two primary types of private limited companies, each designed for a different type of investor.
Foreign Company (PT PMA)
A PT PMA (Penanaman Modal Asing) is a foreign-owned limited liability company. It allows foreign individuals or corporations to hold shares in an Indonesian business, either partially or fully, depending on the business sector. The PT PMA is regulated by the Indonesia Investment Coordinating Board (BKPM) and must comply with the Positive Investment List, which outlines which sectors are open to foreign ownership and to what percentage.
Key facts about PT PMA:
- Allows up to 100% foreign ownership in open sectors
- Minimum paid-up capital: IDR 2.5 billion (~USD 150,000) per BKPM Regulation No. 5 of 2025
- Minimum total investment plan: IDR 10 billion (~USD 700,000), excluding land and buildings
- Must have at least 2 shareholders, 1 director, and 1 commissioner
- Can legally employ foreign nationals with valid work permits
- All registrations are processed through the OSS (Online Single Submission) system
Local Company (PT)
A local PT (also called PT PMDN, Penanaman Modal Dalam Negeri) is a private limited company fully owned by Indonesian citizens or entities. Foreigners cannot directly own shares in a local PT. This structure is best for Indonesian nationals who want to build a legally recognized business with limited liability.
Key facts about local PT:
- 100% owned by Indonesian individuals or legal entities
- No nationwide fixed investment minimum (varies by sector and license category)
- Requires a minimum of 2 Indonesian shareholders
- Simpler and faster to register compared to PT PMA
- Can operate across multiple business lines under different KBLI codes
Characteristics of a Private Limited Company (PT) vs Public Limited Company (PT Tbk)
It helps to understand how a private PT differs from a publicly listed company (PT Tbk) before deciding which structure suits your needs.
| Feature | Private Limited Company (PT) | Public Limited Company (PT Tbk) |
| Ownership | Held by private shareholders (min. 2 individuals or entities) | Shares offered to the general public via the stock exchange |
| Minimum Capital | No fixed national minimum; varies by sector and license type | Minimum IDR 30 billion in net assets required |
| Management | Board of Directors + Board of Commissioners | Same structure, but under strict OJK (Financial Services Authority) oversight |
| Share Transfer | Restricted; requires approval from other shareholders | Freely traded on the Indonesia Stock Exchange (IDX) |
| Public Disclosure | Minimal; internal reporting only | Mandatory annual reports, audited financials made public |
| Fundraising | Private equity, loans, or internal funding | Can issue shares and bonds to the general public |
| Liability | Limited to each shareholder’s paid-up capital | Limited to each shareholder’s paid-up capital |
| Examples | Most SMEs and foreign subsidiaries (PT PMA) | Telkom Indonesia, Bank BCA, Astra International |
Private and Public Limited Companies: A Comparison
Beyond general characteristics, Indonesian Company Law also sets procedural differences between private and public companies, particularly around how shareholder meetings are handled.
| Aspect | Private Limited Company (PT) | Public Limited Company (PT Tbk) |
| Number of Shareholders | Minimum 2; no strict upper ceiling for most private PTs | Minimum 300 public shareholders post-IPO |
| Location of Annual General Meeting of Shareholders (AGM) | Held at the company’s registered domicile in Indonesia | Can be held anywhere in Indonesia |
| Notice for AGM | At least 14 days before the meeting date | At least 28 days before the meeting; public announcement required through OJK-approved media |
| Chair of AGM | Appointed by shareholders or one of the Directors during the meeting | Chaired by the President of the Board of Commissioners |
Opening a Private Limited Company: Advantages and Disadvantages
Setting up a PT or PT PMA in Indonesia is a major commitment. Here is a balanced overview of what to expect.
Advantages
- Limited liability protection – Your personal assets are not at risk if the company takes on debts or faces legal disputes
- Legal credibility – A PT is a recognized legal entity that builds trust with clients, partners, and local banks
- Access to capital – You can raise funds from investors and apply for business loans under the company’s name
- Sponsorship for foreign staff – A PT PMA can legally sponsor foreign employees through the KITAS work permit system
- Permanent business structure – A PT has no set expiry date, unlike a representative office or a branch setup
- Potential tax incentives – Certain priority sectors qualify for government tax incentives and facilities
Disadvantages
- Higher upfront capital requirements – PT PMA demands significant minimum capital and total investment commitments
- Ongoing compliance obligations – Monthly tax filings, quarterly BKPM activity reports (LKPM), and licensing renewals add administrative work
- Sector restrictions apply – Some industries are partially or fully closed to foreign ownership under the Positive Investment List
- Stricter bookkeeping requirements – PT PMA owners must maintain proper financial records and file annual corporate tax returns
Here’s What You Need for Setting Up a Limited Company in Indonesia
Before starting the registration process, make sure these items are ready:
- A confirmed KBLI code (Indonesian Standard Business Classification) matching your planned business activity
- A registered business address in Indonesia, a virtual office is accepted for most business categories
- Full identification documents for all shareholders, directors, and commissioners
- Proof of investment funds or committed capital
- A local notary to draft the Deed of Establishment (Akta Pendirian) in Bahasa Indonesia
Requirements to Set Up A Private Limited Company in Indonesia
1. Minimum of Two Shareholders
Every PT in Indonesia must have at least two shareholders. For a PT PMA, shareholders can be foreign individuals or corporations. Both must be named in the Deed of Establishment, and their identities must be officially verified. For sectors fully open to foreign investment, a 100% foreign-owned PT PMA is legally possible, no local partner is required.
2. Minimum of One Director
A PT must appoint at least one director who is responsible for the company’s day-to-day management. For a PT PMA, the director can be a foreign national, provided they hold a valid KITAS (Limited Stay Permit) with the appropriate work authorization, or an Indonesian citizen. The director’s details must appear in the articles of association.
3. One Commissioner
At least one commissioner must be appointed to oversee the company’s management and provide an independent governance check on the directors. For PT PMA companies, having an Indonesian commissioner is often recommended for smoother administrative dealings, though it is not always legally mandatory depending on the sector.
4. Paid-up Capital
For a PT PMA, the minimum paid-up capital is IDR 2.5 billion (~USD 150,000) as set by BKPM Regulation No. 5 of 2025. The total investment plan must reach at least IDR 10 billion (~USD 700,000), excluding land and building costs. For a local PT, minimum capital requirements vary based on the specific business license category applied for.
How to Set Up a Private Limited Company in Indonesia
The registration process is now largely digital, handled through Indonesia’s Online Single Submission (OSS) platform. Here are the main steps:
- Choose your KBLI code, Identify the correct business sector code that matches your planned activities and determines your foreign ownership percentage cap
- Draft the Deed of Establishment, Work with a local notary to prepare and sign the articles of association in Bahasa Indonesia
- Get Ministry of Law and Human Rights (MoLHR) approval, The notary submits the Deed online through the Ministry’s system; once approved, a Ministerial Decree of Legal Entity Status is issued, giving your company official legal standing
- Register for an NPWP, Your company must obtain a Tax Identification Number (Nomor Pokok Wajib Pajak / NPWP) from the Directorate General of Taxes for all financial and compliance purposes
- Obtain your NIB, Register on the OSS system to receive your Business Identification Number (NIB), a 13-digit identifier that also functions as your import license, customs ID, and primary business license for low-risk sectors
- Secure sectoral licenses, Depending on your industry, additional permits may be required. Low-risk businesses only need the NIB; medium-risk businesses need a standard certificate; high-risk businesses require a full license
Post-Registration Process
Once your PT or PT PMA is officially registered, several follow-up actions are needed to stay compliant and operational:
- Open a corporate bank account: Every company operating in Indonesia needs a business bank account. Read the full step-by-step process in our guide on how to open a corporate bank account in Indonesia for PT PMA businesses
- Apply for Investor KITAS: If you plan to live in Indonesia and manage your PT PMA directly, you need a legal stay permit. Find out why PT PMA owners need an Investor KITAS to legally manage their operations in the country.
- File monthly tax reports: Your company must submit monthly VAT returns and payroll reports, plus an annual corporate income tax filing.
- Submit quarterly LKPM reports: PT PMA companies are required to report their investment activity to the BKPM every quarter through the OSS system.
- Manage your team’s work permits: If you hire foreign employees, they will need either an Investor KITAS or a Working KITAS. Check our full guide on
- Investor KITAS vs Working KITAS to determine which permit is right for your team.
Guide to Doing Business in Jakarta
Jakarta is Indonesia’s commercial capital and its top investment destination. In Q1 2025 alone, Jakarta attracted IDR 69.8 trillion in investment, representing 15% of the national total from both foreign and domestic sources. The city offers world-class infrastructure, a concentrated ecosystem of banking and logistics services, and access to Indonesia’s largest consumer market.
For most foreign-owned companies (PT PMA), Jakarta is the default choice for registering a business address. Notary networks, OSS regional offices, and professional service providers are readily available, which makes the registration and post-setup process faster. A virtual office in Jakarta is accepted by most government authorities for initial company registration.
Foreign investors planning to manage their PT PMA in Jakarta should also understand their residency options. Read our guide on what KITAS is and how it supports your legal residency as a business owner in Indonesia. It is also worth knowing that foreigners can open local bank accounts in Indonesia, something that is essential for managing daily business transactions once your PT PMA is active.
Setup Your Company with EZPZ Indonesia
Registering a PT PMA involves multiple legal, regulatory, and administrative layers, especially for first-time foreign investors. EZPZ Indonesia provides full end-to-end support: from selecting the right KBLI code and preparing your Deed of Establishment, to processing your Ministry approval, NPWP, NIB, and sectoral permits.
Our team handles everything in English, so you do not have to navigate Indonesian bureaucracy alone. Whether you need company incorporation, Investor KITAS processing, or business bank account assistance, we manage the entire process for you, so you can focus on growing your business.
Ready to register your company in Indonesia?
👉 Start your PT PMA registration with EZPZ Indonesia today.
Frequently Asked Questions
Can foreigners own 100% of a PT PMA?
Yes, foreigners can own 100% of a PT PMA in business sectors that are fully open to foreign investment under Indonesia’s Positive Investment List. However, certain sectors have partial ownership caps or are fully restricted to foreign investors. Always verify your chosen KBLI code before proceeding.
How much does it cost to set up a PT PMA?
The minimum paid-up capital is IDR 2.5 billion (~USD 150,000). The total investment plan must be at least IDR 10 billion (~USD 700,000), excluding land and building costs. Additional expenses include notary fees, government processing charges, and professional service fees.
How long does it take to register a PT?
A local PT typically takes 4-8 weeks to fully register, but with EZPZ Indonesia, the process only needs 14 days to be registered. A PT PMA can take 4–8 weeks, depending on document completeness, business sector complexity, and the time needed to obtain sector-specific licenses.
Do I need a local director for my PT PMA?
Not necessarily. A PT PMA can appoint a foreign director, as long as that person holds a valid KITAS with the right work authorization. However, having an Indonesian director or commissioner can simplify certain administrative and banking processes.
Can I change my business structure later?
Yes. You can restructure, for example, converting a local PT into a PT PMA or updating your business lines, but the process requires amendments to the articles of association, notary involvement, and approval from the Ministry of Law and Human Rights.
Is a private limited company the same as Ltd.?
Yes, in concept. An Indonesian PT is the local equivalent of a “Limited” (Ltd.) or “Limited Liability Company” (LLC) in other countries. The core benefit is the same: shareholder liability is capped at each person’s invested capital.
Does a private limited company have shareholders?
Yes. A PT must have at least two shareholders, who can be individuals or corporate entities. For a PT PMA, at least one shareholder must be a foreign individual or company. Shareholders own the company through shares and are entitled to receive dividends.
How long does it take to register a new company in Indonesia?
For a standard low-risk business, NIB issuance through the OSS system can take as little as 1–3 business days after the Deed of Establishment is approved. The full process, including Ministry ratification, NPWP, and NIB, typically takes 2–8 weeks in total, depending on business type and document readiness.
