PT PMA Explained: How Foreigners Can Own Property in Bali

If you’re serious about investing in Bali property, you’ve probably heard the term “PT PMA.” It’s the most legally secure way for foreigners to control property in Indonesia — but it’s not for everyone.

Here’s everything you need to know.

What Is a PT PMA?

PT PMA stands for Perseroan Terbatas Penanaman Modal Asing — an Indonesian limited liability company with foreign ownership. Unlike a local PT (which requires Indonesian shareholders), a PT PMA can be 100% foreign-owned.

The company holds Hak Pakai (Right to Use) title over land, registered at BPN (the National Land Agency). You own the company; the company holds the property right. This gives you the strongest legal position available to a foreign investor in Indonesia.

How It Works

1. Establish the PT PMA — Register an Indonesian company with foreign ownership through the OSS (Online Single Submission) system
2. Meet capital requirements — Minimum paid-up capital of IDR 10 billion (~$113K USD)
3. Convert land title — The freehold (SHM) land title is converted to Hak Pakai, registered in the company’s name at BPN
4. Operate — The company can hold property, earn rental income, and conduct business

The Hak Pakai title is valid for 30 years, extendable by 20 years, then renewable for another 20 years — giving you up to 70 years of registered property rights.

PT PMA Requirements

Requirement	Detail
Minimum capital	IDR 10 billion (~$113K USD) paid-up
Shareholders	Minimum 2 (can be foreign individuals or entities)
Directors	Minimum 1 director + 1 commissioner
Local director	At least 1 Indonesian director (can be hired)
Business classification	Must match KBLI code for intended activity
Registered address	Physical office address in Indonesia
Tax registration	NPWP (company tax number) required

Important: The IDR 10 billion minimum capital is the amount that must be deposited. This capital is used for the property purchase and business operations — it’s not a fee that disappears.

Setup Cost and Timeline

Our in-house legal team handles the full PT PMA setup:

Item	Cost	Timeline
PT PMA company setup	IDR 25,000,000 (~$1,067 USD)	14 working days
Notary fees	Included	—
OSS registration	Included	—
NPWP (tax number)	Included	—
Bank account opening	Included	—
Hak Pakai title conversion	Separate (varies)	2–3 months

Total setup time from start to having a fully operational company with a bank account: approximately 3–4 weeks.

PT PMA vs Leasehold: Which Should You Choose?

This is the most common question we get from foreign buyers. Here’s the comparison:

Factor	Leasehold	PT PMA
Setup cost	Low (legal fees only)	~$1,067 USD + $113K capital
Legal protection	Notarised contract	Registered title at BPN
Duration	25–30 years + extension	Up to 70 years (30+20+20)
Registered at BPN	No	Yes
Commercial use	Limited	Full commercial rights
Multiple properties	Separate lease each	One company, many properties
Annual compliance	Minimal	Company reporting required
Rental business	Needs Pondok Wisata licence	Included in business scope
Resale	Transfer lease	Transfer company shares
Best for	Single villa, personal use	Investors, multiple properties

Choose Leasehold If:

• You’re buying one villa for personal use or rental
• Your budget is under $200K USD
• You want a simple, low-maintenance structure
• You plan to hold for 10–20 years

Choose PT PMA If:

• You’re investing $200K+ USD
• You want the strongest legal protection available
• You plan to own multiple properties
• You want to run a commercial rental operation
• You want registered title (not just a contract)
• You’re building a long-term portfolio in Bali

Annual Compliance

A PT PMA is a real company, and it requires annual maintenance:

• Annual tax returns — Corporate income tax (22%) on net profit
• Monthly tax reporting — VAT (if applicable), employee tax
• Annual financial statements — Required by law
• LKPM report — Investment activity report to BKPM (quarterly)
• OSS compliance — Maintain business licences

Budget approximately IDR 15–25 million/year (~$630–$1,067 USD) for accounting and compliance services. This is a real ongoing cost — don’t overlook it.

Common Misconceptions

”I need IDR 10 billion just sitting in a bank account”

Not exactly. The capital requirement is paid-up capital — it’s used for operations, including the property purchase. If you’re buying a $200K USD villa through a PT PMA, the purchase price itself counts toward your capital investment.

”PT PMA gives me freehold ownership”

No. PT PMA gives you Hak Pakai (Right to Use), which is registered at BPN but is not freehold (Hak Milik). Only Indonesian citizens can hold Hak Milik. However, Hak Pakai through PT PMA is the strongest title available to foreigners — it’s registered, transferable, and lasts up to 70 years.

”I can use PT PMA for any business”

PT PMA must operate within its registered KBLI (business classification) code. If you set it up for property investment and rental, you can’t suddenly use it to run a restaurant without updating the classification. Make sure your initial setup covers all intended activities.

”Setting up a PT PMA is complicated”

With the right legal partner, it’s straightforward. The process is well-established, and experienced lawyers handle it regularly. The complexity is in the ongoing compliance, not the setup.

The Process: Step by Step

1. Consultation — Discuss your investment goals to confirm PT PMA is the right structure
2. Document preparation — Provide passports, proof of address, and investment details
3. Company registration — Lawyer registers the PT PMA through OSS
4. Bank account — Open a corporate bank account and deposit capital
5. Property acquisition — Identify property, conduct due diligence
6. Title conversion — SHM converted to Hak Pakai in company name at BPN
7. Completion — Property is registered under your PT PMA

Total timeline from start to owning property: typically 2–3 months.

Tax Implications for Foreign Owners

As a PT PMA owner, you face tax obligations in both Indonesia and your home country:

Indonesian tax:

• Corporate income tax: 22% on net profit
• Rental income tax: 10% final tax on gross rental revenue
• Land and building tax (PBB): Annual, relatively small

Home-country tax:

• Most countries require you to declare worldwide income, including PT PMA dividends
• Indonesia has double tax treaties with 70+ countries to prevent double taxation
• Capital gains tax typically applies on disposal of company shares
• No main residence exemption for overseas property in most jurisdictions

Example for Australian buyers: The Australia-Indonesia Double Tax Treaty (1992) allows a Foreign Income Tax Offset (FITO) for Indonesian tax paid. See our Tax Guide for details.

Work with a tax advisor experienced in cross-border property investments.

Is PT PMA Worth It?

For a single $133K USD villa that you’ll use as a holiday home, probably not. The setup cost, capital requirement, and annual compliance make leasehold the simpler choice.

For a $333K+ USD investment portfolio, multiple properties, or a commercial rental operation, PT PMA is almost always worth it. The registered title, commercial rights, and up to 70-year duration provide security that leasehold cannot match.

The decision comes down to: How serious is your investment, and how long is your time horizon?

Next Steps

If you’re considering a PT PMA for your Bali investment:

1. Read our complete legal guide for all ownership options
2. Review the due diligence checklist — documents required regardless of structure
3. Understand your tax obligations
4. Contact us for a free consultation — we’ll assess whether PT PMA or leasehold is right for your situation

Our in-house legal team handles the entire PT PMA process. From company setup to property registration, you’ll have expert support at every step.