The Establishment of PMA Indonesia

PMA Indonesia is the abbreviation of Penanaman Modal Asing Indonesia. This is a sector that is
usually related with trading issue, especially with the foreign ones. There are several matters that
has to be paid attention because the PMA bear an important goal to bring great investors to
Indonesia. The economy growth in Indonesia can be improved greatly because of the establishment
of such department and from time to time, the department also provides some opportunities for the
economy in Indonesia to expand in a good way.

Under the Law No. 40/2007 which is related with Limited Liability Company, the PMA can be
established. Well, the PMA is important to establish for the company who have taken an interest to
invest in Indonesia because they will provide several information about how to make a legal conduct
of trading and investment in Indonesia. Its because there are several sectors in Indonesia that are
partially closed or fully closed for investment. In that case, the foreign investor needs to have some
connection with the local entrepreneurs in Indonesia. Itll better if they have already a good
association with the local business. Now, its important for us to know more about PMA and how it
can be a vital matter for trading and investment issue.

How the PMA Indonesia Can Be Different with KPPA Indonesia

Basically, there are two methods in developing business for foreign investors and companies in
Indonesia. It is about building PMA Indonesia or to have KPPA Indonesia. Yet, you have to pay more
attention about these two offices because they have different utilization for maintaining the foreign
companies in Indonesia. If you want to run some businesses in Indonesia by doing some direct
transaction in the local markets, then you need to build PMA.

Yet, if you want to have some surveys about the potential markets in Indonesia, then you can
proceed with establishing KPPA first. Basically, itll be safer to build KPPA because you can know
about the local markets in Indonesia. Then, you will know if you can gain some great profit from the
investment. Later, you can build the PMA if you are really sure about the things that you can gain
from the investment.

How to Build PMA Indonesia

As usual, you need to know several requirements when you want to set PMA Indonesia. You can
gather information from Badan Koordinasi Penanaman Modal or Indonesia Investment Coordinating
Board. They will lead you to some data about setting the PMA and how to make a deal related to
foreign investment in Indonesia. Though its not a compulsory matter, BKPM has given some advices
for the foreign investor to develop some connections with the local company in Indonesia because it
can avoid them from the petty matters in conducting business. The local company can teach them
about the culture of business in Indonesia because it usually has a different culture with the place
where theyre coming from. Most foreign companies also have practiced this thing because they
want to prevent the problem that they have.

In that case, the foreign companies can set many things through the local companies and the things
that they need to do is to gives several needed documents to the local companies. Because the
practice is pretty much common in Indonesia, there are several local companies in Indonesia which
have offered this kind of agreement for the foreign investors. The agreement might consist of
several costs for the establishment of the PMA Indonesia. Based on the official procedure that has
been known, the cost is usually around USD $3,000 and it takes for about 10 weeks.

There is also another case where the foreign investor can cooperate with the established PMA
Indonesia. So, they dont have to build the PMA for the beginning. This is the decision that can be
made by the investors. There are also several things that need to be noticed in regard the permits
and the documents for the PMA. The documents might need some time to be established and here
are several documents and the estimation of the days for acquiring the documents.

First document is Principle License & Business License from BKPM which needs 7 days to get. Its
important for the foreign investor to get this for making the PMA run properly. There is also Deed of
Establishment and it needs to be legalized by a Public Notary which takes 1-2 days. The third
document is Legalization of the legal status of the PMA from Ministry Law and Human Rights. The
document takes much time as it needs 10 days to be completed. There are also some other
documents that needs to be paid attention further, be sure you have those documents to complete
the establishment of the PMA.