Entering the Indonesian market in 2026 has become strategically more accessible, yet legally more nuanced. The enactment of the Ministry of Investment/Head of BKPM Regulation Number 5 of 2025 (Permen Investasi No. 5 Tahun 2025) has reshaped the landscape for foreign direct investment.
A common question we receive at Legalinfo Lawyers from foreign investors is: “Is it true that we no longer need to deposit IDR 10 Billion upfront to start a PT PMA?”
The answer is Yes, but with critical conditions. There is a significant legal distinction between Paid-Up Capital (required for the Deed of Incorporation) and Investment Value (required for the OSS Business License). Failing to understand this distinction can lead to administrative sanctions or the revocation of your Business Identification Number (NIB).
Here is a legal breakdown of the new capital requirements for 2026.
1. The Good News: Lower Paid-Up Capital (IDR 2.5 Billion)
Historically, the barrier to entry for foreign investors was high, requiring a substantial immediate cash injection. However, under the 2025/2026 regime, the government has relaxed the initial incorporation requirement.
According to Article 26 Paragraph (10) of BKPM Regulation No. 5 of 2025:
“The minimum capital requirement for PMA… is a placed/paid-up capital of at least IDR 2,500,000,000.00 (two billion five hundred million Rupiah) or its equivalent in US Dollars per limited liability company.”
What this means for you: When you sign the Deed of Incorporation (Akta Pendirian) before a Notary, you are legally required to prove a capital injection of only IDR 2.5 Billion into the company’s bank account. This significantly eases the initial cash flow burden for new market entrants.
2. The Critical Constraint: Investment Value (> IDR 10 Billion)
While the “entry ticket” (Paid-Up Capital) has become cheaper, the “commitment value” remains high. Indonesia maintains its policy of attracting only high-quality investments (classifying PMA as Large Enterprises).
Referencing Article 26 Paragraph (2) of the same regulation, a PT PMA must:
“…have a total investment value greater than IDR 10,000,000,000.00 (ten billion Rupiah), excluding land and buildings, per 5 (five) digit KBLI business line per project location.”
The Legal Strategy: You cannot simply deposit IDR 2.5 Billion and stop there. In the OSS RBA System, you must submit an investment plan totaling more than IDR 10 Billion.
The Gap: The difference between your Paid-Up Capital (IDR 2.5 Billion) and the Investment Value (IDR 10 Billion+) can be fulfilled through future capital expenditure (Capex), working capital, or retained earnings over a specific period.
Compliance: This commitment must be realized and reported quarterly in the Investment Activity Report (LKPM).
3. The “Lock-Up” Period for Capital (Article 27)
To prevent “fly-by-night” operations or mere administrative compliance, the new regulation imposes strict financial discipline regarding the deposited capital.
Article 27 states that the paid-up capital:
“…cannot be transferred out of the business entity’s account for a minimum period of 12 (twelve) months.”
Implication: Investors are prohibited from withdrawing the IDR 2.5 Billion immediately after the Deed is ratified. The funds must remain in the corporate account and be utilized strictly for genuine business operations (e.g., office rental, employee salaries, purchasing equipment). This provision is designed to ensure the company has sufficient runway for its first year of operations.
4. Special Exceptions for Property & Plantation Sectors
For investors targeting specific sectors, the regulation offers a significant advantage regarding the calculation of Investment Value.
Under Article 26 Paragraph (5), the exclusion of “land and buildings” from the IDR 10 Billion calculation does not apply to:
Property and Industrial Estates;
Accommodation (Hotels/Resorts);
Recreation Parks;
Agriculture, Plantation, Livestock, and Fisheries.
If your business falls into these categories, your expenditure on buying land or constructing buildings counts towards the IDR 10 Billion requirement, making compliance much easier.
Conclusion
Setting up a PT PMA in 2026 offers greater flexibility at the start, but demands higher accountability in execution. The reduction of the initial paid-up capital to IDR 2.5 Billion is a welcome change, provided you have a clear roadmap to fulfill the remaining investment commitment.
