General information, not legal advice. This guide sets out the general rules as I understand them. It has not yet been reviewed by an Indonesian notary, and the rules change. Before you sign or pay anything, confirm every point with your own independent notary (PPAT) or lawyer.
What a PT PMA is
A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is an Indonesian limited company that foreigners can own, wholly or in part. It is registered through the government's online licensing system (OSS) and has its own tax number, bank account and directors.
Because it is an Indonesian legal entity, a PT PMA can hold land rights that a foreign individual can't, and it can hold the business licences needed to rent villas to holiday guests legally.
How it holds property
A PT PMA can't hold freehold (Hak Milik). It holds a building right, Hak Guna Bangunan (HGB), which lets the company own buildings on the land and use the land for a long term:
- up to 30 years at first,
- an extension of up to 20 years,
- then a renewal of up to 30 years.
When freehold land is bought from an Indonesian owner, its title is converted to HGB in the company's name at the land office (BPN). The company can also lease land instead, which is common for larger plots.
HGB is a registered title, which is the main difference from a private lease: it appears on a certificate, can be mortgaged and can be sold to another qualifying buyer. See land titles explained for how HGB compares with SHM and Hak Pakai.
When a PT PMA makes sense
| Your plan | Usual structure |
|---|---|
| One villa as a holiday home, perhaps rented through a manager | Leasehold in your own name |
| Living in Lombok on a residence permit | Leasehold or Hak Pakai |
| Several villas, a boutique hotel or a retreat | PT PMA |
| Buying land to develop and sell or rent | PT PMA |
| Wanting a title you can borrow against or sell as a registered right | PT PMA with HGB |
For a single villa, the yearly cost of running a company usually outweighs the benefit. A well-written leasehold is simpler and cheaper.
What setting one up involves
Capital and investment
Indonesia sets a minimum investment for foreign-owned companies, and a minimum amount of capital that must actually be paid in. For years the investment plan had to exceed IDR 10 billion (around US$600,000) per business line and location, excluding land and buildings. The paid-up capital rule was changed in 2025. Check the current figures with a licensed consultant before you plan around them, because they decide whether a PT PMA is realistic for you at all.
Business classification and licences
The company registers the activities it will carry out using Indonesia's business classification codes (KBLI). Renting a villa to guests needs an accommodation classification, plus the risk-based licences that go with it. Some accommodation types are reserved for Indonesian or small local businesses, so the exact classification matters. A consultant should match it to what you plan to do.
Land use
The land must be zoned for the business. In South Lombok, that usually means a tourism zone in the regional spatial plan, and a land-use approval (KKPR) before building. A PT PMA doesn't fix bad zoning.
Office address
The company needs a registered address. Rules on virtual offices have tightened in Bali; ask whether the same applies in West Nusa Tenggara when you set up.
Running costs and tax
- Accounting and tax filings: monthly tax reports, even when they show nothing, and an annual corporate return.
- Investment reports: regular activity reports (LKPM) through the licensing system. Companies that stop reporting risk losing their licences.
- Corporate income tax: the standard rate is 22% of profit. Rental income from land and buildings can fall under a separate final tax instead; your accountant will tell you which applies.
- Annual land and building tax (PBB) on the property.
- Directors and visas: a foreign director working in Indonesia needs the right stay permit.
- Getting money out: profits reach you as dividends, which are taxed on the way out at a rate that depends on your country's tax treaty.
Ask any consultant for a written quote covering a full year of compliance, not just the setup fee.
PT PMA instead of a nominee
A PT PMA is the legal alternative to a nominee. If someone suggests putting land in an Indonesian person's name with a side agreement giving you control, don't. Those arrangements are void under Indonesian law. A company you own, holding HGB in its own name, gives you a registered title instead of a promise. See property scams and red flags.
Questions to ask a consultant
- What are the current minimum investment and paid-up capital rules for my plan?
- Which business classification (KBLI) fits a rental villa, and is it open to foreign ownership?
- Is the land zoned for that business, and who obtains the land-use approval?
- What will a full year of accounting, reporting and licences cost?
- How will the land title be converted to HGB, and when is the HGB term counted from?
- How do I take profits out, and what tax is withheld?
- What does it cost to close the company if I sell?
This guide is general information, not legal or tax advice. Company and investment rules in Indonesia change often. Use a licensed consultant, notary and accountant.
Common questions
What is a PT PMA?
An Indonesian limited company with foreign shareholders. It can hold a building right (HGB) over land and run a licensed business, such as renting villas to guests, in its own name.
Do I need a PT PMA to buy a villa in Lombok?
Usually not. Most overseas buyers of a single holiday or rental villa use a leasehold in their own name. A PT PMA suits people running a hospitality business, holding several properties or developing land.
How long does HGB title last?
HGB is granted for up to 30 years, can be extended for up to 20 years and then renewed for up to 30 more, as long as the company still qualifies and the land is used as permitted.
Is a PT PMA expensive to run?
It has real ongoing costs: an accountant, monthly and annual tax reports, licence and investment reporting, and a registered office. Budget for these every year, even when the villa earns nothing.