What Is a PMA Company and Why Do Foreign Buyers Use One?

A PMA (Penanaman Modal Asing) is a legally incorporated foreign-owned company in Indonesia. Under Indonesian investment law, a PMA can hold Hak Guna Bangunan (HGB) — a building use right — over land that it uses for business purposes. For foreign property investors, this structure enables legal ownership of villa, hotel, or commercial property in Bali without the need for an Indonesian nominee partner.

The key advantage of the PMA route is that it provides genuine, legally enforceable property rights. Unlike nominee arrangements — where an Indonesian individual holds title on behalf of a foreigner — a PMA structure is compliant with Indonesian investment law and does not expose the buyer to the risks of nominee ownership.

Steps to Set Up a PMA for Property in Bali

  • Step 1 — Company establishment: Register the PMA with Indonesia's Online Single Submission (OSS) system and obtain NIB (Business Identification Number). Typically takes 2–4 weeks.
  • Step 2 — Business classification: Select the appropriate KBLI (business classification) code — commonly 55110 (hotel/villa accommodation) for rental properties.
  • Step 3 — Minimum investment: Indonesian investment law requires a minimum stated investment of IDR 10 billion per business location for a PMA, though actual paid-up capital requirements are lower.
  • Step 4 — HGB title: With an active PMA, the company can apply for Hak Guna Bangunan over the purchased land, granting the right to build and use for up to 30 years (extendable).

Costs and Considerations

PMA establishment costs in Bali typically range from IDR 30–70 million, depending on the services used and any legal support required. Annual compliance costs (audit, tax reporting, company maintenance) run IDR 15–40 million per year. Despite these costs, the PMA route is considered the gold-standard ownership structure for foreign investors in Bali who intend to operate a commercial property. Anara Property can introduce you to reputable PMA consultants and notaries in Bali. Contact us to get started.