PT PMA Capital Versus Investment Plan Explained

There are two numbers in Indonesian foreign investment licensing that look similar, are quoted in the same currency, and are constantly treated as one thing. Confusing them is the most common reason a PT PMA application stalls in review, and the confusion usually survives until someone at the licensing office points it out.

One is paid up capital, currently a minimum of IDR 2.5 billion. The other is the investment plan value, still above IDR 10 billion. They measure different things, they are counted on different bases, and both apply at the same time.

This article sets out what each figure actually is, how they are counted, what happens when they are mixed up, and the retention rule that changed what paid up capital means in practice. Arfadia is a digital agency, not a licensing consultant. This is orientation so you can ask a notary or licensed adviser sharper questions.

The short version

Paid up capital is money that has actually arrived in the company's bank account, deposited by shareholders. It is counted per company. The current minimum is IDR 2.5 billion under Ministry of Investment and BKPM Regulation No. 5 of 2025, effective 2 October 2025, reduced from IDR 10 billion.

Investment plan value is the total planned project spend, covering assets and working capital, excluding land and buildings. It is counted per five digit KBLI code, per project location. The threshold remains above IDR 10 billion, and the 2025 reform did not change it.

Why the per KBLI, per location detail matters more than the number

This is the part that catches out companies planning more than one activity, and it is rarely spelled out.

The investment plan threshold applies per five digit KBLI code, per project location. A company operating a single activity from a single office faces one threshold above IDR 10 billion. A company operating three distinct activities across two locations is not facing the same figure, because the requirement multiplies with the combination.

The practical consequence appears at the moment of drafting rather than at the moment of paying. A founder who has planned a business around three revenue lines discovers that structuring them as three KBLI codes changes the investment plan arithmetic substantially, and that a narrower initial scope with codes added later may be the more workable route.

That is a structuring decision, and it has to be made before documents are drafted rather than after.

What happens when the two are mixed up

The failure is quiet. Nothing is rejected outright, because on the face of it the application is complete. What happens is that the figures do not reconcile against each other, the file goes into review, and it stays there.

Three versions of the mistake recur.

The rule that changed what paid up capital means

Before October 2025, paid up capital functioned as a gate. You cleared it once and the question closed. Article 27 paragraphs 1 and 2 of Regulation No. 5 of 2025 changed that.

Paid up capital cannot be moved out of the company account for at least twelve months from the date it is deposited, except for asset purchases, construction or operational needs. The applicant declares this through a self declaration in the OSS system as part of the licensing submission.

Read the exceptions carefully, because they are broad. Asset purchases, construction and operational needs cover almost everything a genuinely operating business spends money on. The rule does not freeze the capital. It stops the capital from leaving the business.

The practice it targets is well known: capital deposited shortly before the notarial deed is signed, held just long enough to satisfy the requirement, then withdrawn once the licence is issued. Before this regulation the retention obligation was not set out explicitly.

Where the retention rule connects to reporting

The lock on its own would be a mild measure. What gives it force is the reporting obligation at the other end.

Investment realisation is monitored through the periodic LKPM report, the investment activity report every PT PMA must file. A company that deposits the minimum, files nothing meaningful, and shows no movement toward its cumulative investment plan risks having its business identification number suspended in the OSS system.

That is the consequence that matters, and it is not a fine. The NIB is the identifier other licences hang from and the number counterparties check. A suspended NIB can leave a company fully incorporated, fully capitalised at the minimum, and administratively unable to operate.

What this means for cash planning

The reframe is simple and it changes the budget line. IDR 2.5 billion deposited into an Indonesian entity is not a refundable deposit that can be recovered once the licence arrives. It is first year working capital for that entity, and spending it on the business is the point rather than a problem.

A plan that treats the capital as a compliance cost, sitting in an account and waiting to come back, will need revising. A plan that treats it as the opening balance of an operating company is aligned with how the regulation now works.

Where the two figures meet in practice: the bank

On paper these are two lines in an application. In practice they converge at one point, and it is the step foreign investors consistently underestimate.

Paid up capital has to be genuinely deposited, which means a corporate bank account has to exist before the capital requirement can be satisfied. Corporate account opening in Indonesia is frequently the slowest single step in the whole sequence, often slower than the licensing itself, and it commonly requires a director to attend in person. Banks apply their own onboarding checks, and those checks are not coordinated with the licensing timeline.

That creates a dependency chain worth mapping before committing to a launch date. The KBLI code determines the licensing pathway. The licensing pathway produces the documents the bank asks for. The bank account enables the capital deposit. The capital deposit completes the licensing requirement. And the investment plan declared at the start is what LKPM reporting is measured against for years afterwards.

Each link is straightforward on its own. What produces a four month process instead of a four week one is discovering the chain in the wrong order, usually when a director realises they need to fly to Jakarta for an appointment that could have been scheduled six weeks earlier.

A note on what these figures do not tell you

Both numbers are entry requirements. Neither is a statement about what running the business will actually cost.

The investment plan is a declaration of intent covering assets and working capital. It is not a budget anyone has validated, and it is not a floor on what the business will need. Companies routinely declare a plan that satisfies the threshold and then find that operating in the market requires a different figure entirely, in either direction.

This matters because the plan is what LKPM reporting is measured against. A plan set unrealistically high creates a reporting obligation that becomes harder to satisfy each period. A plan set at the bare minimum leaves no headroom if the business expands into an additional KBLI code later. Neither problem appears at licensing. Both appear about a year in.

One thing that has not changed at all

Using a locally owned PT with a nominee shareholder to hold what is in substance foreign ownership remains prohibited under Article 10 paragraph 1 of Law No. 25 of 2007 on Investment.

Worth restating in an article about capital thresholds, because the workaround is sometimes pitched as a way to avoid them entirely. It is not a grey area, and the arrangement leaves the foreign party without enforceable ownership, which is usually where the cost actually lands.

The lowered threshold makes the lawful route materially more accessible than it was, which removes most of whatever commercial logic the workaround previously had.

What to check before drafting anything

Three questions, in order. Which five digit KBLI codes does the business actually operate under, and from how many locations. What does the Positive Investment List say about foreign ownership for each of those specific codes. And is the capital being planned as a deposit to be recovered, or as first year working capital to be spent.

Getting those three settled before a notary drafts anything is what separates a four week licensing process from a four month one.

Frequently Asked Questions

What is the difference between paid up capital and investment plan value?

Paid up capital is equity actually deposited into the company bank account by shareholders, counted per company, with a current minimum of IDR 2.5 billion. Investment plan value is total planned project spend covering assets and working capital, excluding land and buildings, counted per five digit KBLI code per project location, with a threshold above IDR 10 billion. Both apply at the same time and they measure different things.

Did the 2025 reform change both figures?

No. Ministry of Investment and BKPM Regulation No. 5 of 2025, effective 2 October 2025, reduced minimum paid up capital from IDR 10 billion to IDR 2.5 billion per company. The investment plan threshold remains above IDR 10 billion per KBLI code per project location and was not changed.

How is the investment plan counted for a company with several activities?

Per five digit KBLI code, per project location. A company operating several distinct activities across more than one site is not facing a single threshold, because the requirement is counted on that combination. This is why the code and site structure should be settled before documents are drafted.

Can paid up capital be withdrawn once the licence is issued?

Not freely. Article 27 paragraphs 1 and 2 of Regulation No. 5 of 2025 require that paid up capital remains in the company account for at least twelve months from deposit, except for asset purchases, construction or operational needs, declared through a self declaration in the OSS system. The exceptions cover ordinary business spending, so the rule stops the money leaving the business rather than freezing it.

What happens if investment realisation shows no progress?

Realisation is monitored through the periodic LKPM investment activity report. A company that deposits the minimum and shows no movement toward its cumulative investment plan risks having its business identification number suspended in the OSS system, which can leave it incorporated and capitalised but administratively unable to operate.

Is a nominee arrangement a way around the capital thresholds?

No. Using a locally owned PT with a nominee shareholder to hold what is in substance foreign ownership is prohibited under Article 10 paragraph 1 of Law No. 25 of 2007 on Investment. The arrangement also leaves the foreign party without enforceable ownership. The lowered capital threshold has made the lawful route considerably more accessible.

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