Indonesia has announced a significant policy update affecting the establishment of foreign-owned companies (PT PMA). The Indonesia Investment Coordinating Board (BKPM) has issued Regulation No. 5 of 2025, which reduces the minimum paid-up capital requirement for PT PMA from IDR 10 billion to IDR 2.5 billion.
This change has a substantial impact on entrepreneurs planning to establish a company in Bali or other regions of Indonesia. A full PT PMA setup guide is available at flado.id/ptpma, and the Russian version can be found at https://flado.id/ptpma.
Minimum Capital Reduced to IDR 2.5 Billion
According to BKPM Regulation No. 5/2025:
• the minimum paid-up capital is now IDR 2.5 billion
• the government aims to attract more foreign investors, including SMEs
• entry barriers for new investors are reduced
• capital structuring and investment reporting requirements have been made more flexible
This marks a strategic move to strengthen Indonesia’s competitiveness as an investment destination.
What This Means for Foreign Investors
The updated capital requirements make Indonesia more accessible for those who want to:
• start a new business
• test a business model before committing large investments
• scale gradually with lower initial obligations
However, before registering a company, most investors go through a discovery and research phase. Indonesia provides several visa options specifically designed for this purpose.
Visa Instruments for Entrepreneurs and Investors
These visa types allow foreign investors to stay legally in Indonesia, explore the market, conduct meetings, and prepare for the incorporation of a PT PMA.
In practice, the visa stage is often the first and most important priority for new investors.
C12 Entrepreneur Visa: 180 Days + Extension Up to 360 Days
The C12 visa is ideal for business exploration and feasibility studies. It enables investors to:
• analyze market opportunities
• build partnerships
• attend meetings and negotiations
• develop a launch strategy
Validity:
• initial stay: 180 days
• extension: an additional 180 days
• total possible stay: up to 360 days
This makes C12 one of the most flexible options for early-stage business research.
D12 Pre-Investment Visa: 1–2 Year Multiple-Entry Visa
The D12 visa is suitable for investors who are:
• preparing to establish a PT PMA
• conducting long-term market research
• forming local business relationships
• assessing vendors, locations, and opportunities
Validity:
• available as a 1-year or 2-year multiple-entry visa
• each stay is allowed for up to 180 days with the possibility to extend for another 180 days
• offers significantly more flexibility than C12 due to multiple entries
Transitioning From Research to Company Establishment
Once the research phase under C12 or D12 is complete, the investor typically proceeds with the registration of a PT PMA. After incorporation, two long-term stay permits become relevant:
- Investor KITAS E28A
- Working KITAS E23
Each serves a different purpose.
Investor KITAS E28A — For Business Owners and Shareholders
Investor KITAS allows foreign investors to:
• reside long-term in Indonesia
• oversee their company’s development
• participate in high-level management as shareholders
Important: Investor KITAS does not provide the right to perform work or receive a salary in Indonesia.
Work inside the company may be performed only by:
• Indonesian citizens
• foreign nationals holding a valid Working KITAS E23
Investor KITAS is ideal for company owners who do not need to execute day-to-day operational tasks themselves.
Working KITAS E23 — The Only KITAS Allowing Legal Employment
Foreign nationals who plan to work in Indonesia must obtain a Working KITAS E23.
Key features:
• can be issued for director or specialist roles
• available for 6 months, 1 year, or 2 years
• grants the right to legally work and receive income
• required for any kind of foreign employment
This is the only KITAS category that provides full legal work authorization for foreigners in Indonesia.
Temporary Hiring: C18 Work Trial Visa
When a company needs to bring a specialist or trainee for a short period, the C18 Work Trial Visa is available.
Characteristics:
• validity: 90 days
• extensions: not allowed
• suitable for temporary workers, trainees, and trial-period assignments
This visa is often used when evaluating a candidate before applying for a full Working KITAS.
Conclusion
Lowering the minimum paid-up capital to IDR 2.5 billion is a major step toward making Indonesia more accessible to foreign entrepreneurs. Investors now have a clearer, easier path:
• explore Indonesia through C12, D12 or C18
• register a PT PMA when ready
• choose between Investor KITAS E28A or Working KITAS E23 depending on their role
Flado supports investors through every stage — from selecting the right visa to establishing a PT PMA and issuing KITAS permits.
More details: https://flado.id/ptpma