**A local PT is Indonesia’s domestic limited-liability company, reserved for Indonesian shareholders, while a PT PMA is the foreign-investment version that lets non-Indonesians legally own equity. The headline gap is capital: a PT PMA commits to an IDR 10 billion investment plan; a local PT carries no statutory minimum.**
Both are a Perseroan Terbatas — the same corporate shell recognised under Indonesian company law. What changes everything is who is allowed onto the shareholder register. That single distinction cascades into capital rules, licensing, tax treatment, and whether a foreign founder can get a KITAS to live in Bali and run the business.
What actually separates a local PT from a PT PMA?
A local PT — often written PT PMDN, for Penanaman Modal Dalam Negeri (domestic investment) — can only carry Indonesian citizens or Indonesian-owned entities on its cap table. Bring in even one percent of foreign equity and the company is no longer a PMDN; it becomes a PT PMA (Penanaman Modal Asing), supervised by BKPM under the Ministry of Investment.
Here is the side-by-side comparison the search results rarely lay out cleanly:
| Feature | Local PT (PMDN) | PT PMA |
|---|---|---|
| Foreign ownership | Not permitted — Indonesian shareholders only | Permitted, subject to the Positive Investment List |
| Minimum investment plan | None set by statute | IDR 10 billion (excl. land and buildings) |
| Minimum paid-up capital | Decided by the founders | IDR 2.5 billion (25% of the plan) |
| Shareholders | Two or more (one allowed for a micro/small PT Perorangan) | Two or more, at least one foreign |
| Lead regulator | Ministry of Law and Human Rights plus OSS | BKPM / Ministry of Investment |
| Foreign owner’s KITAS | Cannot issue an investor KITAS | Sponsors investor and work KITAS |
| Typical setup time | Roughly one to three weeks | Six to ten weeks |
The practical read: a local PT is faster, cheaper, and lighter to run, but it is closed to foreign owners. A PT PMA is the only lawful route to foreign equity — and it pays for that access with a far heavier capital commitment and a longer build.
How much capital does each structure require?
This is where the two diverge most sharply. Since the Job Creation Law removed the old fixed minimum, a local PT has no statutory capital floor — the founders simply state an authorised capital in the deed. Government Regulation No. 7 of 2021 then classifies the company by size, based on capital excluding land and buildings:
| Business size | Capital (excl. land and buildings) |
|---|---|
| Micro | Up to IDR 1 billion |
| Small | IDR 1 billion to 5 billion |
| Medium | IDR 5 billion to 10 billion |
| Large | Above IDR 10 billion |
A PT PMA answers to a different rulebook. As of 2026, and subject to change, the standard requirement is an investment plan of IDR 10,000,000,000 — roughly USD 660,000 to 700,000 depending on the exchange rate — with minimum paid-up capital generally set at 25% of that, or IDR 2,500,000,000 (about USD 150,000 to 175,000). According to Emerhub, the IDR 2.5 billion paid-up floor is fixed by Article 26(10) of BKPM Regulation No. 5 of 2025.
Two numbers, two meanings. The IDR 10 billion is a plan — a commitment you register, not cash you hand over on day one. The IDR 2.5 billion paid-up capital, by contrast, must genuinely be injected into the company. Confusingly, the initial deposit to physically open the corporate bank account can be administratively tiny — often under USD 100, per Bali Villa Realty — which is separate from, and no substitute for, the formal capital requirement. If you want the full sequence from name reservation to capital injection, our [PT PMA company setup](/bali-pt-pma-company-setup/) guide walks each step in order.
Can either company sponsor a foreign director’s KITAS?
Only the PT PMA can hand a foreign owner a stay permit tied to the business. A PT PMA sponsors an investor KITAS for a foreign shareholder-director and work KITAS for foreign employees. The director — foreign or local — must reside in Indonesia and hold a personal NPWP tax number, and a foreign director needs a KITAS to do so legally, per Indonesia-Investments.
A local PT is not shut out of hiring foreigners entirely: it can employ foreign staff through an RPTKA work-permit plan and sponsor a work KITAS for them. What it cannot do is issue the investor KITAS, because that permit is anchored to foreign shareholding — and a foreigner cannot legally hold shares in a PMDN company. So a founder who wants both to own the company and to live in Bali on the strength of that ownership has, in reality, only one option.
What does converting a local PT into a PT PMA involve?
Founders sometimes start with a local PT — or buy into an existing one — then convert once foreign capital arrives. It is a defined process, not a loophole:
- Check the KBLI first. Confirm the company’s business-classification codes actually permit foreign ownership under the Positive Investment List. Code selection is strategy, not paperwork, and OSS-RBA has been blocking some low and medium-low risk KBLI codes for PT PMAs registered at Bali addresses.
- Amend the deed. A public notary drafts the share transfer and the amended articles admitting the foreign shareholder.
- Get ministry approval. The Ministry of Law and Human Rights legalises the amended deed.
- Update the NIB. The company’s status is switched to PMA through the OSS-RBA online single submission system, producing a fresh NIB.
- Meet the capital. Register the IDR 10 billion investment plan and top up paid-up capital toward the IDR 2.5 billion floor.
- Refresh tax and licensing. Update the corporate NPWP and PKP position and re-confirm sectoral licenses against the chosen KBLI codes.
Which structure fits which founder?
If the business will be Indonesian-owned and you simply need a clean domestic vehicle, a local PT is lighter on capital and quicker to stand up. If any foreign equity is involved — holding villa land through HGB or Hak Pakai, running a PMA-operated business, or securing a KITAS off the back of ownership — the PT PMA is the honest answer, even at IDR 10 billion.
The tempting shortcut is a nominee: a local PT where an Indonesian holds shares “on behalf of” a foreigner. Treat that as a trap. Nominee shareholder and director arrangements are risky and, under Indonesian law, effectively unenforceable — the foreign backer has no reliable legal claim to the asset they paid for. The IDR 10 billion is steep, but it buys something a nominee never can: an ownership title that stands up.
Figures here are current as of 2026 and subject to change. This is general information, not legal or tax advice — confirm your specific KBLI, capital, and permit position with licensed Indonesian counsel and a registered tax consultant before you file.