PT PMA: The Company Structure Every Serious Foreign Buyer in Lombok Should Understand
A PT PMA lets a foreign-owned Indonesian company hold HGB title — the closest thing to freehold available to international capital. Here is how it works, what it costs, and when it makes sense.
The short answer: A PT PMA is a foreign-owned Indonesian company that can hold HGB title (Hak Guna Bangunan) — a registered, bankable, 30-year renewable land title. It costs €3,000–8,000 to set up and €1,000–2,000/year to maintain. It makes financial sense for investors buying two or more assets, holding for 15+ years, or operating a rental business at scale. For a single villa with a 25-year horizon, clean leasehold is simpler and cheaper.
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What a PT PMA actually is
PT PMA stands for Perseroan Terbatas Penanaman Modal Asing — literally, a limited liability company with foreign investment. It is an Indonesian legal entity incorporated under Law No. 40/2007 (Company Law) and regulated by the BKPM (now part of BKPM/OSS system) under GR 5/2021.
The key property-law advantage: a PT PMA can hold HGB title (Hak Guna Bangunan) on its balance sheet. HGB is a registered title that appears in the BPN national land registry in the company's name. It is fundamentally different from leasehold:
| | Leasehold (Hak Sewa) | PT PMA (HGB) | |--|---------------------|--------------| | Registered at BPN | ❌ Contractual only | ✅ Registered title | | Bank collateral | ❌ | ✅ | | Duration | 45–55yr (contract) | 30+20+30yr (registered) | | Multiple assets | One deed per property | Same company holds all | | Resale mechanism | Lease transfer + AJB | Share transfer | | Annual compliance | None | €1,000–2,000/yr |
How to set one up: step by step
The process moves through three Indonesian institutions: the OSS system (BKPM), a PPAT notary, and the Ministry of Law and Human Rights. Budget 4–8 weeks from start to deed in hand.
Step 1: Choose your business classification (KBLI code)
Every Indonesian company must declare its business activities using KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) codes. For property investment:
- 55194 — Other accommodation not elsewhere classified (covers villa rental)
- 68100 — Real estate owned or leased
- 68200 — Real estate on a fee or contract basis (if you're managing third-party properties)
Choosing the wrong KBLI creates compliance problems later. If your villa earns Airbnb income, you need an accommodation code, not a pure real estate code.
Step 2: Prepare your foreign shareholder documents
- Valid passport (all pages, not just the photo page)
- Proof of address from your home country (bank statement or utility bill, no older than 3 months)
- Apostille or notarised translation if required by the notary's jurisdiction
- Tax identification number from your home country
Step 3: Engage a PPAT notary and a BKPM agent
These are two separate professionals:
- PPAT notary: drafts and executes the deed of establishment (akta pendirian), articles of association, and eventual HGB title documents
- BKPM agent: handles the OSS submission, investment approval (NIB), and regulatory filings
Many law firms in Bali and Lombok offer combined notary+BKPM services. Budget Rp 15–35M (€900–2,100) for their combined fees, excluding government charges.
Step 4: OSS registration and NIB
Submit through the OSS (Online Single Submission) platform at oss.go.id. You receive a NIB (Nomor Induk Berusaha — business registration number) immediately in most cases. The NIB is your company's primary identifier for all subsequent filings.
BKPM investment approval follows (typically 3–5 business days for hospitality/real estate classifications if the KBLI is clean).
Step 5: Ministry of Law registration
The notary submits the company deed to the Ministry of Law and Human Rights (Kemenkumham) for legal entity status. Processing time: 5–10 business days. You receive a SK (Surat Keputusan) — the official Ministry decree recognising your company.
Step 6: Capital deposit and bank account
Open a corporate bank account in the company's name (Bank BCA, BNI, Mandiri, and several international banks operating in Indonesia accept PT PMA accounts). Deposit the minimum paid-in capital:
- Nominal capital: Rp 10 billion (≈€600K) — this is a statutory minimum, not money you spend
- Paid-in capital: 25% of nominal = Rp 2.5 billion (≈€155K) — must be held in the company account
This Rp 2.5B sits in the company bank account and becomes part of your property purchase capital. You are not burning €155K — you are placing it in a company that will then buy the property.
Step 7: NPWP tax registration
Register the company for a tax identification number (NPWP) at the local tax office. Required for all subsequent invoicing and VAT obligations. Processing: 1–3 business days.
Total timeline: 4–8 weeks if documents arrive complete. The main delays are apostille preparation in the home country (1–3 weeks) and Ministry of Law queue times.
Full cost breakdown
Setup costs (one-time)
| Item | Typical range | |------|-------------| | PPAT notary fee (deed + articles) | Rp 5–15M (€300–900) | | BKPM/OSS agent fee | Rp 8–20M (€500–1,200) | | Ministry of Law registration | Rp 1–5M (€60–300) | | Bank account opening fee | Rp 500K–2M (€30–120) | | NPWP and SIUP registration | Rp 1–3M (€60–180) | | Apostille/translation (home country) | €200–600 | | Total setup | €1,150–3,300 | | + Minimum paid-in capital (sits in account) | Rp 2.5B (≈€155K) |
The minimum capital is not a cost — it is working capital inside the company that funds the property purchase. For a €255K villa, you deposit €155K, the company borrows nothing, and uses €100K from the remaining share capital contribution.
Annual ongoing costs
| Item | Typical annual cost | |------|-------------------| | Tax compliance (PPh Badan, VAT filing) | €600–1,200 | | LKPM investment activity report (quarterly, BKPM) | Included in accountant fee | | Annual financial statement | €300–600 | | Annual General Meeting + minutes | Rp 1–3M (€60–180) | | Bank account maintenance | Rp 500K–2M (€30–120) | | Total ongoing | €990–2,100/yr |
10-year cost comparison: PT PMA vs leasehold
For a single €255K villa:
| | Leasehold | PT PMA | |--|-----------|--------| | Setup cost | €18,000–24,000 (7–9% transaction tax) | €155K capital + €2,000–4,000 fees | | Annual operating cost | €0 | €1,000–2,100 | | 10-year total compliance cost | €0 | €10,000–21,000 | | Bank collateral available | ❌ | ✅ | | Title security | Contractual | Registered | | Resale flexibility | Lease transfer | Share transfer (faster) | | Effective total cost advantage | Leasehold cheaper by ~€10K–20K over 10yr | PT PMA wins on security and collateral |
Breakeven point: If you buy a second asset, the incremental PT PMA cost for the additional HGB title is approximately €1,500–3,000 (new BPN registration only — no new company needed). At two assets, PT PMA is already competitive with the cumulative leasehold transaction costs.
When PT PMA makes sense
Yes — use PT PMA if:
- You are buying two or more assets (the company holds all of them; incremental cost per asset is low)
- You plan to hold for 15+ years (HGB renewal is smoother than a leasehold extension negotiation)
- You operate a rental business at scale and need VAT invoicing and deductible expenses
- You want bank financing now or later (only HGB title is accepted as collateral by Indonesian banks)
- The specific parcel is only available on HGB terms (common in KEK Mandalika)
- You have an exit plan that benefits from share transfer (faster, lower buyer transaction cost)
No — stay with leasehold if:
- Single asset, personal use or single rental, budget under €250K
- No intention to borrow against the asset
- No appetite for annual Indonesian tax compliance
- Horizon under 10 years
- Developer has clean SHM-backed leasehold documentation
The five mistakes foreign investors make when setting up a PT PMA
1. Wrong KBLI code The permitted business activities must precisely match the actual use. A company registered under real estate trading codes (68100) may face compliance questions if it earns income from short-stay rental under accommodation codes (55194). Fix it before the BPN registration, not after.
2. Undercapitalising on paper Some agents offer to file with artificially low nominal capital to minimise the appearance of the capital deposit. BKPM cross-references your paid-in capital against investment value. A company nominally capitalised at Rp 1B trying to hold a Rp 4B property attracts scrutiny. File correctly.
3. Using the developer's recommended notary A notary recommended by the developer has a pre-existing relationship with the developer. Use an independent PPAT notary for the company establishment — especially for the HGB title transfer, where your interests and the developer's may diverge on title condition, permit status, or encumbrances.
4. Forgetting the LKPM filing Every PT PMA must file a quarterly LKPM (Laporan Kegiatan Penanaman Modal — investment activity report) with BKPM via the OSS system. Missing these filings results in warnings and eventually company suspension. Most accountants handle it automatically — confirm it is in their scope before signing.
5. Not calendaring the HGB renewal HGB title expires. The first renewal (30→50yr) requires a BPN application, and the clock matters. Calendar the renewal process 24 months before expiry — BPN processing can take 6–18 months in busy land offices, and a lapsed HGB is a negotiating problem you do not want.
The resale mechanism: why share transfer matters
When you own property through a PT PMA and decide to sell, you have two options:
Option A — Title transfer: The company sells the HGB title and the land to the buyer. This is treated as an asset sale. The company pays 2.5% income tax on the gross sale value. The buyer pays BPHTB (5% acquisition duty on value above NJOP).
Option B — Share transfer: You sell your shares in the PT PMA to the buyer. The HGB title stays in the company's name — no BPN re-registration required. The buyer acquires the company and with it the property. Tax treatment: capital gains tax on the share gain (typically 20% of profit for foreign sellers); the buyer pays no BPHTB.
For buyers entering a PT PMA, a share purchase is administratively faster and cheaper. This makes PT PMA-held properties appealing to the buyer pool — a meaningful resale advantage over leasehold.
Frequently asked questions
Can I be the sole foreign shareholder?
In most hospitality and real estate KBLI classifications, yes — 100% foreign ownership is permitted under the current Positive Investment List (updated 2021). Some sectors retain a minimum Indonesian equity requirement; verify the specific code before filing.
Can one PT PMA own multiple properties across different zones?
Yes. This is one of its principal advantages. The same company can hold HGB titles in Kuta, Selong Belanak, and Tanjung Aan simultaneously. Each property gets its own BPN entry, but the corporate structure overhead is shared.
Does the minimum capital have to come from abroad?
The paid-in capital must be deposited in an Indonesian corporate bank account. It can come from abroad via wire transfer or from funds already in Indonesia. There is no specific rule requiring the source to be foreign — but for BKPM reporting, you should document the capital injection clearly.
Can a PT PMA get a bank loan against the property?
Yes — this is one of the HGB title's key advantages. Indonesian banks (BCA, BNI, Mandiri, CIMB Niaga) and some international lenders will lend against HGB-titled property held by a PT PMA. Typical LTV: 60–70% of appraisal value. This is not available to leasehold holders.
What happens if I stop filing LKPM reports?
BKPM issues an administrative warning (SP1) after a missed quarter, followed by SP2 and eventual company suspension if filings continue to be missed. Suspension freezes the company's ability to transact — including selling the property. Hire an accountant who handles this automatically.
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