How to Enter Indonesian Market and Open a PT PMA – Opening a business abroad presents a significant opportunity. This is because it offers the potential for higher profits and access to a broader global market. By opening a business abroad, a company can reach a wider range of new clients, increase competitiveness and innovation, and capitalize on growth opportunities. With careful preparation, opening a business abroad can become a foundation for long-term success.

The First Step in Entering a New Market

Conduct Market Research

Understand the characteristics of the Indonesian market, including competition, consumer trends, and applicable regulations.

1. Market Analysis > Identify consumers in Indonesia. e.g., demographics, behaviors, and preferences.
2. Competitor Analysis > Study competitors’ products or services, their marketing strategies, and competitive advantages.
3. Understand Customer Needs > Conduct surveys, interviews, or initial market testing to ensure your product or service is truly needed by the local market.
4. Review Market Trends > Study ongoing industry trends, consumption trends, and changes in consumer behavior in Indonesia.
5. Regulation > Studying business licensing to comply with applicable laws in Indonesia.

Choosing a Business Model

Determining the appropriate business model, such as establishing a PT PMA (Foreign Investment Company). Key sectors attracting foreign investment:

1. Manufacturing
2. Infrastructure
3. Technology
4. Energy
5. Mining
6. Transportation, Warehousing, and Telecommunications

Seek Partners for Business Development

Considering working with experienced local business partners or reliable suppliers is essential.

Product and Marketing Adjustments

Making adjustments to products, including materials, packaging, and specifications, to meet market needs. And creating strategies tailored to the target audience and market needs in Indonesia. This includes adjusting pricing, distribution channels, and marketing campaigns.

Create a Risk Mitigation Plan

Prepare a plan to address potential challenges such as policy changes or economic shifts.

The Second Step in Entering a New Market

Management Team

1. Human Resources > Recruit a core team with a strong understanding of the local market, including individuals with experience in marketing, sales, and operations.
2. Office and Operations > Prepare a strategic location/office or operational facility to support distribution and customer service.

Marketing and Promotion Strategy

Utilize marketing and promotion strategies from:

1. Digital Marketing > Through social media, content marketing, and paid advertising to build brand awareness in Indonesia.
2. Word-of-Mouth > Solicit testimonials from early customers to build trust.
3. Traditional Marketing > Promotion in mass media, local events, or collaboration with communities to reach a wider audience.

Market Testing and Product Launch

Conducting a product launch in a specific region to gauge market response and gather feedback.

Evaluation & Adaptation

Conduct regular evaluations by regularly reviewing sales performance, customer feedback, and market trends. Adjustments to changing trends and strategies are made with a flexible and adaptive approach.

Establishing PT PMA

Definition of PT PMA

Investment activities to conduct business in Indonesia carried out by foreign investors, either using foreign capital entirely or in partnership with local investors.

Open and Closed Business Sectors for PT PMA

Open Business Sectors (100% Foreign Ownership)

1. Manufacturing, such as: consumer goods, automotive, electronics, and raw materials.
2. Technology and digital, such as: video game development, e-commerce applications, and data processing.
3. Services, such as: management consulting services, business services, and several services related to tourism and the creative economy.

Open Business Sectors with Special Requirements

1. Transportation: Foreign ownership is limited, for example, to 49% for pioneer domestic sea transportation and public shipping.
2. Health: There are restrictions, such as only being allowed to establish principal clinics (specialty clinics), not primary clinics.
3. Telecommunications: Foreign ownership can reach 49-65%.
4. Mining: Has strict restrictions because it is considered strategic.
5. Trade: Openness can be limited, such as up to 33% ownership for distributors and warehouses.

Closed Business Sectors – (prohibited)

1. Production of firearms, munitions, and war equipment.
2. Chemical weapons industry.
3. Ozone-depleting chemical industry.
4. Drug cultivation and industry (including marijuana).
5. Gambling (online and offline).
6. Fishing of protected fish species (CITES Appendix I).
7. Harvesting and use of coral from the wild.
8. Certain types of alcoholic beverages.

Requirements for Establishing a PT PMA

• Founders : Minimum two people. They can be all foreign nationals, Indonesian citizens, Indonesian legal entities, or foreign legal entities.
• Management Structure : Minimum of one Director and one Commissioner
• Determining the Name of the PT PMA
• Determining the Location of the PT PMA

Document Requirements PMA

1. Copy of Passport for Foreign Nationals & KTP (Resident Identity Card) for Indonesian Citizens
2. Copy of Family Card (KK) for Indonesian Citizens
3. Copy of Personal Taxpayer Identification Number (NPWP) for Indonesian Citizens
4. Colored 3×4 cm photo of the director
5. Copy of proof of ownership or office lease contract
6. Copy of the latest year’s Land and Building Tax (PBB) according to the company’s domicile
7. Domicile Certificate from the building or shophouse manager if the location is an office building/shophouse
8. Neighborhood/Community Council (RT/RW) Certificate if the company is domiciled in a residential/rural area
9. Office Photos, Interior and Exterior

Process Flow

1. Verifying and Ordering the PT PMA Name
2. Creating the Deed of Establishment
3. Approval from the Ministry of Law and Human Rights
4. Creating the NPWP
5. Creating the NIB License and Business Permit/Other Permits (OSS)

Confused and Don’t Know How to Establish a PT PMA?

Contact Indoservice now!

Indoservice, a secretarial and licensing services consulting company firm that can assist you in establishing a company in Indonesia and business-related licensing. Trusted and experienced in Indonesia, committed to providing the best and fast service to meet your needs.

Our consultants will assist you in the process of establishing a company and obtaining permits related to your company’s business in Indonesia. Contact us now at Telp. / Chat Whats app +62877-1449-8500 or admin@indoservice.co.id.