Difference of PT and PMA

Many foreigners do not know the difference between the PMA and the PT because, there are many articles that mention them at all. But they are in fact different. Here we explain the difference.


PMA (Foreign Investment Company)

Most private foreign investments have been through the establishment of foreign investment companies, also referred to as 'PMA companies'. PMA stands for penanaman modal asing which means 'foreign investment'.

The areas of business in which PMA companies are allowed to operate are restricted by a so-called Negative List. Although this list has now become very short (as most areas are now open for foreign investment) recent amendments to the List have increased the number of business areas where a local shareholding is required.

Most forms of foreign investments are governed by the Foreign Capital Investment Law of 1967 which has just been replaced by Law No 25 of 2007 on Capital Investment. The government agency overseeing foreign investments in Indonesia is the Capital Investment Coordinating Board (Badan Koordinasi Penanaman Modal / "BKPM").

The BKPM still acts as the prime regulator of foreign investments into Indonesia although there has been a recent if not dramatic shift from the BKPM to its regional offices, the so-called BKPMD's, which now also fulfill an important task in dealing with certain foreign investment matters. The BKPM endeavors to provide a 'one stop service' for foreign entrepreneurs seeking to invest in Indonesia.

As mentioned, foreign investments in Indonesia are most commonly made through taking a stake in or full ownership of a PMA company. There are a few exceptions to this general rule. For example, in the banking, financial and insurance sector, foreign investments usually occur through a joint venture bank, a finance company, a venture capital company or a multi-finance company.

 

PT (Company Limited)
 

That is a shareholder for the company is 100% citizen. That is not even 1% share ownership foreigners. They are governed by the 1996 Corporation Law. PTs are managed by a Board of Directors. Non-Indonesian citizens may not be directors or foreign investment commissioners in a PT.

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