For years, the biggest obstacle to doing business legally in Indonesia was not the paperwork — it was the price of entry. A foreigner who wanted to own a company, build a villa, or run a rental operation faced a minimum paid-up capital of IDR 10 billion (around USD 620,000) sitting in the bank. In late 2025 that changed. Indonesia cut the requirement by 75%, and 2026 is the first full year investors can take advantage of it.
The Headline Change: Capital Cut by 75%
Under Minister of Investment / BKPM Regulation No. 5 of 2025, effective 2 October 2025, the minimum paid-up (issued) capital for a foreign-owned company — a PT PMA (Penanaman Modal Asing) — dropped from IDR 10 billion to IDR 2.5 billion per company (roughly USD 155,000). It is the single most investor-friendly move Indonesia has made in years, and it brings the cost of a compliant structure within reach of mid-sized investors who were previously locked out.
There is one nuance that trips almost everyone up, so read this twice: the investment plan is not the same as paid-up capital. The total planned investment must still exceed IDR 10 billion per five-digit KBLI business code, per project location (excluding land and buildings). What changed is how much actually has to be deposited as share capital at the start — now IDR 2.5 billion, and not even all of it on day one.
The practical reality: You do not need to wire IDR 2.5 billion on the day you incorporate. A capital statement (declaration) letter is accepted at registration, and the actual deposit is made after your corporate bank account is open. The IDR 10 billion "investment plan" is a planned figure that includes everything you intend to invest over time — equipment, build cost, working capital — not cash you must hand over up front.
What a PT PMA Is — and Why You Need One
A PT PMA is a limited-liability company that may be partly or wholly owned by foreigners. It is the only legal vehicle through which a non-Indonesian can run a business, hold the right land titles (such as Hak Pakai or Hak Guna Bangunan), and operate a villa or rental business in their own name. It is what stands between you and the single most dangerous shortcut in Bali: the nominee arrangement, where property is held under an Indonesian's name on your behalf. Nominee structures are explicitly illegal, increasingly enforced, and leave you with zero legal recourse if the relationship sours.
The Positive Investment List: Most Sectors Are Now Open
Since the Omnibus Law (Job Creation Law) reforms, Indonesia replaced the old "Negative Investment List" with a Positive Investment List (Presidential Regulation 10/2021, amended by 49/2021). The logic flipped: instead of listing what foreigners cannot do, the law now assumes every sector is 100% open to foreign ownership unless it is specifically restricted.
A few caps and closures remain — for example, private broadcasting is capped at 20% and wholesale of alcoholic beverages at 49%, while a short list of defence and security activities stays fully closed. It is worth checking which business types are now off-limits to foreigners in Bali before you commit to a sector. Importantly, despite frequent rumours, Indonesia did not issue a brand-new investment list in 2025; the year's updates focused on licensing mechanics and risk-based supervision, not ownership limits.
Your KBLI Code Decides Everything
Before you draft a single document, you map your business to the right KBLI (Indonesian Standard Industrial Classification) code. This five-digit code determines your licensing path in the OSS system, your foreign-ownership eligibility, your minimum-capital calculation, and your sector compliance obligations. Choose it carefully — a villa rental business (e.g. KBLI 55130 for short-stay accommodation, or 68111 for real estate owned/leased) is licensed very differently from a consulting firm. The wrong code is the most common, and most expensive, mistake.
How to Register in 2026: The OSS-RBA Process
Company licensing runs through the OSS-RBA system (Online Single Submission, Risk-Based Approach), which grades each activity by risk level — low, medium-low, medium-high, or high — and assigns the corresponding licences. The core output is your NIB (Nomor Induk Berusaha / Business Identification Number). The path looks like this:
- Confirm your KBLI code(s) and foreign-ownership eligibility.
- Sign the Deed of Establishment before an Indonesian notary.
- Obtain legal-entity approval (SK) from the Ministry of Law (Kemenkumham).
- Register for a tax ID (NPWP) for the company.
- Issue the NIB through OSS, plus any risk-based business licences.
- Open a corporate bank account and complete the capital deposit.
Structurally, a PT PMA needs a minimum of two shareholders, one director, and one commissioner. If you are weighing up the wider effort involved, our guide to the five hurdles of starting a business in Indonesia walks through what to expect beyond registration. Foreign nationals can serve as director or commissioner, provided they hold a valid stay-and-work permit (KITAS).
| Requirement | Before Oct 2025 | From Oct 2025 |
|---|---|---|
| Min. paid-up capital | IDR 10 billion | IDR 2.5 billion (~USD 155k) |
| Investment plan | > IDR 10B / KBLI / location | Unchanged |
| Foreign ownership | Positive List (up to 100%) | Unchanged |
| Min. shareholders | 2 | 2 |
| Licensing | OSS-RBA + NIB | OSS-RBA + NIB |
Residency: Investor KITAS & the Golden Visa
Owning a PT PMA can also unlock the right to live in Indonesia. Common 2026 routes include:
- Investor KITAS (as director/commissioner): available with a reduced share threshold of around IDR 1 billion (~USD 62k).
- Investor KITAS (passive shareholder): from roughly IDR 1.25 billion in PT PMA shares, without an active management role.
- Golden Visa (founder route, E28C): longer-term residency for larger commitments — broadly USD 2.5 million for 5 years or USD 5 million for 10 years.
The Taxes You Will Actually Pay
Once trading, the headline rates are straightforward: corporate income tax of 22%, and VAT (PPN) of 11–12% on most goods and services. Filing is now done through Coretax, the tax authority's digital system rolled out in 2025. Property-rental income and capital gains carry their own treatment, so budget for a local accountant from day one rather than as an afterthought.
What This Means for Property Investors in Bali
For anyone planning to own and rent villas in Bali, the 75% capital cut is genuinely good news. The compliant structure that protects your asset — a PT PMA holding the correct land title and the correct KBLI licence — is now meaningfully cheaper to set up. The legal route, which used to be the expensive option versus a risky nominee, is closer than ever to being the obvious one. The case for doing it properly has never been stronger.
Thinking of setting up a PT PMA?
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💬 Book Free ConsultationThis article is general information for foreign investors, not legal, tax or immigration advice. Regulations, thresholds and exchange rates change; figures above are approximate and current as of mid-2026. Always confirm your specific situation with a licensed Indonesian notary, lawyer or tax advisor before acting.
Sources: Minister of Investment / BKPM Regulation No. 5 of 2025; Presidential Regulation 10/2021 (amended 49/2021); OSS-RBA (Government Regulation 5/2021); PwC Indonesia Tax Summaries 2026.