1. What exactly is PMA?
PMA (Penanaman Modal Asing/Foreign Investment), is an investment activity conducted by foreign investors in the territory of Indonesia or the Republic of Indonesia. This investment will be utilized to establish a business in Indonesia. The investment might come from a single individual or a partnership with domestic investors.
Then why is this PMA applied in Indonesia? One of the main tasks of the PMA is to increase the wellbeing of the populace. In addition, PMA might be a source of income for Indonesia's growth. This PMA will support the growth of the Indonesian economy. As more sorts of businesses emerge, foreign investment can also assist reduce unemployment.
Foreign investment is a multi-step procedure. Here are the phases of obtaining your PMA that you must understand.
- The preparation phase.
Foreign investment begins with the preparation stage. At this stage, a request is filed to BKPM on the proposed foreign investment. To BKPM, you must submit a description of the business to be conducted and the funds to be invested. At this stage, you may also submit an application for basic authorization (which will be discussed in the next section). This introductory phase usually lasts between four and seven days.
- The Construction phase.
The construction phase, also known as the realization phase, comes next. After submitting and gaining permission, you may immediately begin this step. At this time, you will establish a company or PT PMA. This phase is complicated due to the numerous duties that must be done. Additionally, quite a bit of documentation must be prepared to finish this construction phase. You must also provide facilities so that the PT PMA you establish may begin immediately. It is extremely recommended that you seek assistance or guidance from those with greater expertise to aid you through this phase.
- The Operation/Production Phase.
The next necessary stage for foreign investment is operation or production. This step may only be carried out if all paperwork has been prepared and the two prior steps have been completed. Before the production or operation phase may begin, at least 85 percent of the preparation must be completed.
At this point, you must submit an application for a permanent business license or IUT (Izin Usaha Tetap). The second-stage-prepared documentation must be submitted to BKPM. If BKPM approves, you will acquire a permanent business license and begin operations
2. Requirements for PMA Establishment in Indonesia.
The foreign investment or PMA is achieved by forming a legal entity, namely a Limited Liability Company or PT. Creating a PT is substantially comparable to creating a domestic business. Only PT PMA requires BKPM clearance, which is mentioned in a document known as the primary permit.
The primary permit is a mandatory authorization. This license is required for everyone who wants to start a business or invest. This is required for the establishment of PT PMA. Before studying the primary permit, let's analyze the full process of generating PT PMA.
Here are the documents that must be Submitted.
- Photocopy/scanned of the investor passport.
- Scanned NPWP/TIN
- Articles of Association
- Email address
- Phone number
- A picture with a red background measuring 3x4 and 4x6 inches (4 pieces each).
- Describe the management structure and fund or shareholdings of PT PMA's founders.
- Address details for PT PMA.
- A copy of the IMB or construction permit for PT PMA.
- A photocopy of the evidence of business site usage.
- Company seal
- Original power of attorney
- Detailed flowchart of the production procedure from raw materials to finished items (for the industrial sector) or Description of available activities and services (for the service business sector).
- Capital letter
In addition, you must submit an application for a basic permit. Prior to submitting an application for the creation of a PT PMA, a principal approval is necessary. Here is some of the required documentation.
- The identity of the shareholder/PIC/representative.
- Activity Plan
- Power of attorney letter (If the company's management is transferred to another party, a is required.
- cover letter and resume/CV of the PIC to the BKPM office.
If the document is complete, it will then be verified. If the document has passed validation and has been pronounced legitimate, the application will be confirmed. The primary approvals required for the formation of PT PMA will be granted.
3. PMA Procedure for Setting Up
After knowing what the requirements are, what is the process that needs to be followed to set up a PMA? Here is a short explanation of how the PMA was set up.
- Qualify
To set up a PT PMA, the first step is to make sure that all of the requirements have been met. In general, three things are needed: a deed of establishment of a PT, a decree from the Minister of Law and Human Rights about the legalization of a PT legal entity, and a company identification number, or NPWP or TIN. There are also a number of other requirements that must be met. One of them is the value and capital of investments. A Business Identification Number, or NIB, and other business permits are also needed. If you don't already have a permit, you'll need to get one before moving on to the next step.
- Put an Application Permit
You must fill out an application for a permit for the PT PMA to be set up in order to get one. BPKM will get all of the permits. There is an application form that needs to be filled out with the right information. The application process should be done with the help of people who know what they are doing. Filling out forms and sending in paperwork should be done carefully so that they don't have to be done again. If there is a guiding party, there is a better chance that the request will be granted.
- Filling Out Forms
So that the submission process goes smoothly, it is very important to check the documents and make sure they are complete. Whether you apply online or in person, you still need to make sure you have all the documents you need. There are several groups of documents that must be collected, such as documents on the legality of legal entities and the legality of domicile. The company's deed of establishment and its NPWP show that the company is a legal entity. A deed of sale and purchase, a certificate of land rights, and a lease agreement show that the position is legal. In the form of environmental management, there are also legal documents about the environment. If someone else is putting in the application as a deputy leader, don't forget to include a power of attorney.
- Verification
Verification is the next step that must be taken. All of the papers you send will be looked at one by one. If there is still something missing, the officer will let you know and send back the document so it can be filled out again From getting the documents to getting the verification results, it usually takes about a week. You do have the chance to fix mistakes, but it will take you a lot of time to do so. It's much better if the application is approved right away on the first try.
- Results of Checking
You can get one of two results when you try to verify something: rejected or granted. If the results of the check are out, you can find out if you can get permission or not. If you are accepted, you can get a business license 3 days after the results of the check. If the result of the verification says that your application was turned down, you will get a letter telling you so. You will get this letter two days after you send it in, telling you that the results of the verification are not what you expected.
- Report on investment activity (LKPM)
LKPM is a report that shows how investment development works. This report also lists any problems that entrepreneurs have had. Putting together this report must, of course, be done very carefully and in line with the rules.
4. Who can then set up this PT PMA?
Anyone can put in an application, but not all of them will be approved. Of course, you can't get permission unless you meet all the rules.
But it's important to remember that not everyone has the experience and knowledge to apply for PT PMA to be set up. So, it is very important to first learn about the rules and steps for setting up a PMA. If it's really hard, you can use services from expert to help you.
If you think it's a good idea to set up a PMA, there are a few things you should think about. Here are some things that need to be thought about before the PMA establishment procedure can be followed.
- Fields of business
Figure out what kind of business you want to start. Find out if the business can be run by someone from outside the country. Use Presidential Regulation No. 44 of 2016 as a source to learn more about this.
- Value of an Investment and Capital
The next thing to think about is how much will be spent and how much money will be given out to start PT PMA. The value of all the investments must be more than 10 billion Rupiah. The issued and paid-up capital of PT PMA, on the other hand, is at least 10 billion Rupiah (Rp. 10.000.000.000,-). Based on Perka BKPM 4/2021 article 12, paragraph 7. except for land and buildings, as shown by the first four numbers of the KBLI. Pay attention to these requirements for investment and capital so that they don't stop you from applying. BKPM can also think about how much money is available for investments and how much capital is available.
- Office location
The next thing you need to think about is where the office is. Please keep in mind that you can't just have a virtual office. BKPM thinks that PT PMA, which was started with a lot of money, should be able to work through a real office instead of a virtual one. If there isn't a place that can be used as an office, you must first find a place. Finding a place to put this office and buying it will cost money. This is why you should think about it and think about it as well as you can before you set up a PT PMA.
- Presentation
Investors who want to start PT PMA have to give a presentation to BKPM. The presentation will be given to the BKPM evaluation team. This is done so that BKPM can learn everything it needs to know about the business plans and investments that will be made.
At this stage, it's important to be ready. You can convince BKPM to give you a permit and approve your application during your presentation. At this point, you have a great chance to get a permit for the PT PMA you have set up so that it can work.
Along with the completeness of the documents that the officer will check, the outcome will also depend on how well the case is presented. During this presentation, BKPM will be able to decide more easily if a permit can be given or not.
Published By Derry Khudlori
Photo Banner By Ramdhani Arifin