What Is the Minimum Paid-up Capital for a Foreign Company in Indonesia? (BKPM Reg 5/2025 Explained)

Regulation effective October 2, 2025, reviewed June 15, 2026.

If you are asking what is the minimum paid-up capital for a foreign company in Indonesia, the short answer changed significantly in late 2025. The Minister of Investment and Downstreaming/Head of BKPM issued Regulation No. 5 of 2025 (Peraturan Menteri Investasi dan Hilirisasi/Kepala BKPM Nomor 5 Tahun 2025), which lowered the minimum paid-up capital for a foreign-owned limited liability company (PT PMA) to IDR 2,500,000,000 (approximately USD 155,000 at mid-2026 rates). This marks a substantial reduction from the previous benchmark and is part of Indonesia’s broader push toward risk-based business licensing through the Online Single Submission (OSS) platform. However, the headline figure of IDR 2.

5 billion only tells part of the story, sectoral minimum investment thresholds, proof-of-funds requirements and Positive Investment List restrictions can all push the real capital commitment higher.

Minimum Paid-Up Capital Under BKPM Reg 5/2025

BKPM Regulation 5/2025, formally titled Pedoman dan Tata Cara Penyelenggaraan Perizinan Berusaha Berbasis Risiko dan Fasilitas Penanaman Modal melalui Sistem Perizinan Berusaha Terintegrasi Secara Elektronik (Online Single Submission), was promulgated on October 2, 2025. It consolidates and replaces several earlier ministerial regulations, including BKPM Regulation No. 4 of 2021 and BKPM Regulation No. 3 of 2021, which previously governed PT PMA capital requirements.

Under BKPM Regulation 5/2025, the minimum paid-up capital that must be deposited at incorporation for a PT PMA is IDR 2,500,000,000 (two billion five hundred million rupiah). This amount must be evidenced in the company’s bank account at the time of establishment and declared through the OSS system. The regulation is indexed in Indonesia’s official statute registry, the Peraturan BPK portal, confirming its legal force.

The reduction from the earlier threshold represents a deliberate policy shift. As noted by the UNCTAD Investment Policy Monitor, Indonesia lowered this requirement specifically to reduce barriers to entry for foreign-owned limited liability companies and to align paid-up capital rules with the risk-based licensing framework introduced under the Job Creation Law (Undang-Undang Cipta Kerja). Industry observers expect the lower PT PMA minimum capital to attract more small-to-medium foreign investors who were previously deterred by the higher capital lock-up.

Key Statutory Reference

The full 698-page text of BKPM Regulation 5/2025 is available as a PDF on the BKPM’s legal documentation portal (JDIH). For the provisions dealing specifically with paid-up capital requirements for PT PMA entities, the regulation stipulates that capital must be deposited in a company bank account and declared to the OSS system as part of the Indonesia company registration process. This represents the definitive legal source for the IDR 2.5 billion figure.

Quick Example: Paid-Up Capital vs Total Investment

To illustrate how the paid-up capital figure interacts with total investment planning, consider two scenarios. In many business activities, a general rule requires that paid-up capital represent at least 25 percent of the company’s total planned investment value. This means:

This means the IDR 2.5 billion figure is a floor, not a ceiling. Wherever 25 percent of the declared total investment exceeds that floor, the higher amount governs paid-up capital in Indonesia.

How Paid-Up Capital Relates to Minimum Investment and Sector Caps

A common source of confusion for foreign investors is the distinction between paid-up capital and minimum investment value. These are related but legally separate concepts, and BKPM Regulation 5/2025 did not eliminate sectoral minimum investment thresholds.

Paid-up capital is the amount of share capital actually deposited in the company’s bank account at the time of incorporation. Under BKPM Regulation 5/2025, the floor for PT PMA entities is IDR 2.5 billion.

Minimum investment value (also referred to as total investment value or nilai investasi) is the total capital commitment, including paid-up share capital, loan capital, retained earnings and other planned expenditure, that a company declares for its business activities. For many activities, the minimum total investment remains at IDR 10 billion or higher, depending on the specific KBLI (Indonesian Standard Industrial Classification) code selected during OSS registration.

Crucially, when a sector or specific KBLI code mandates a minimum total investment that exceeds IDR 10 billion, the paid-up capital requirement scales upward proportionally. The practical effect is that the IDR 2.5 billion paid-up threshold applies only to the simplest formation scenarios.

Investors should verify their intended business activity codes against the Positive Investment List (Daftar Positif Investasi) before committing to a capital structure. Some regulated sectors, telecommunications, banking, insurance, mining and certain energy activities, carry significantly higher capital requirements that override the general paid-up capital floor.

Proof of Funds and Bank Evidence: What OSS and BKPM Expect

Meeting the minimum paid-up capital for a foreign company in Indonesia is not simply a matter of declaring a number on a form. BKPM and the OSS platform require documentary proof that the declared capital has been physically deposited. Understanding what qualifies as acceptable evidence is essential for a smooth registration process.

Acceptable Proof-of-Funds Documents

The following documents are typically required or accepted as proof that paid-up capital has been deposited:

• Bank deposit slip or transaction confirmation. A receipt from the Indonesian bank where the company’s account has been opened, showing the deposit of the declared paid-up capital amount in IDR.
• Bank confirmation letter. An official letter on the bank’s letterhead confirming the account holder’s name (the PT PMA), the account number, the amount deposited, the transaction reference number and the date of deposit.
• Notary confirmation of capital deposit. When the incorporation deed is executed before a notary, the notary may include a statement confirming that capital has been deposited, or a separate notarial certificate may be prepared.
• Bank statement showing capital retention. Some practitioners report that certain licensing agencies or sectors require evidence that the deposited funds remain in the company account for a specified period after incorporation.

Documentary Standards for Foreign-Sourced Funds

When capital is remitted from overseas, additional requirements apply:

• Currency. The paid-up capital must be declared and deposited in Indonesian rupiah (IDR). Conversion from foreign currency must be completed before or at the time of deposit.
• Translation. Any supporting documents in a language other than Bahasa Indonesia may need to be accompanied by a sworn translation.
• Legalisation or apostille. If overseas bank documents are submitted to support the source of funds, consular legalisation or apostille may be required depending on the issuing country.

Common Red Flags

BKPM and licensing authorities may scrutinise the capital deposit more carefully in certain situations. Third-party loans used as the source of paid-up capital without proper documentation, in-kind asset contributions without independent valuation reports, and circular fund flows that suggest capital was not genuinely committed are all areas that can trigger delays or rejection during Indonesia company registration.

Step-by-Step: Setting Up a PT PMA in OSS With IDR 2.5 Billion Paid-Up Capital

The incorporation of a PT PMA under BKPM Regulation 5/2025 follows the risk-based business licensing framework processed through the OSS (Online Single Submission) system. Below is a practical, numbered checklist for investors and their legal advisors.

1. Pre-check the Positive Investment List and select KBLI codes. Before any filing, verify that your intended business activity is open to foreign investment at the desired ownership level. Identify the correct KBLI (Standard Industrial Classification) code. This step is critical because each KBLI code can carry its own minimum investment threshold. Selecting multiple codes may trigger cumulative capital requirements that push the required paid-up capital above IDR 2.5 billion.
2. Reserve the company name. Submit a company name reservation through the Ministry of Law and Human Rights’ legal entity administration system (AHU Online). The name must comply with Indonesian naming rules, it must be in Bahasa Indonesia, consist of at least three words and not duplicate an existing registered entity.
3. Draft articles of association and founders’ resolutions. Engage an Indonesian notary to prepare the deed of establishment (akta pendirian). The articles must specify the company’s authorised capital, issued capital and paid-up capital. Under BKPM Regulation 5/2025, the paid-up capital declared here must be at least IDR 2,500,000,000 for a PT PMA.
4. Open a corporate bank account and deposit paid-up capital. Open a bank account in the PT PMA’s name at an Indonesian commercial bank. Transfer the declared paid-up capital, at minimum IDR 2.5 billion, and obtain documentary evidence (deposit slip, bank confirmation letter).
5. Notarise the deed of establishment with bank proof. The notary executes the deed of establishment. The bank proof of deposit is attached or referenced in the notarial deed to confirm that paid-up capital has been committed.
6. File via the OSS system. Log in to the OSS-RBA (Risk-Based Approach) platform. Complete the company data fields, including the KBLI codes, capital declarations (authorised, issued and paid-up), shareholder details and ownership percentages. Upload the required attachments, bank proof, notarial deed and identification documents. Apply for the relevant business licence: a Business Identification Number (NIB) and, depending on the risk classification of the activity, any additional sectoral licences.
7. Obtain Tax ID (NPWP), company registration (AHU) and operational licences. Upon successful OSS filing, the system generates a NIB which functions as both the company registration certificate and the basic import identification. A tax identification number (NPWP) is issued concurrently. For medium-risk and high-risk activities, sectoral operational licences or standards certificates must be obtained from the relevant technical ministries.
8. Post-incorporation compliance. After establishment, the PT PMA must file an Investment Activity Report (LKPM) with BKPM on a regular basis, maintain its paid-up capital and comply with ongoing licensing conditions. Failure to maintain capital or submit required reports can result in licence suspension.

Key OSS Form Fields to Check

• Business activity (KBLI). Choose precisely, incorrect or overly broad KBLI codes can trigger unexpected sector-specific capital or licensing requirements.
• Paid-up capital field. Enter the exact amount in IDR and attach bank proof. The OSS system validates this figure against the minimum threshold.
• Shareholder nationality and ownership percentage. Foreign shareholders must be accurately declared. The system cross-references ownership percentages against the Positive Investment List to confirm eligibility.

Practical Costs and Timeline for PT PMA Incorporation

Beyond the paid-up capital itself, investors frequently ask how much does it cost to set up a company in Indonesia. The following table provides estimated ranges for a standard Jakarta-based PT PMA incorporation:

The typical timeline for a straightforward PT PMA incorporation, from name reservation through OSS NIB issuance, is two to eight weeks. The wide range reflects variations in bank processing times, notary availability and whether sector-specific operational licences are needed. Highly regulated sectors such as mining, financial services or telecommunications can add several additional weeks or months to the licensing phase.

Risk Notes, Higher Sector Minimums and Structuring Options

BKPM Regulation 5/2025 does not mean that every foreign investor can enter Indonesia with only IDR 2.5 billion. Several scenarios push the real capital commitment significantly higher:

• Sectoral minimum investment thresholds. Activities in manufacturing, energy, telecommunications and financial services frequently require total investment well above IDR 10 billion, with paid-up capital scaling proportionally.
• Regulated activities and additional capital requirements. Certain licences, including those issued by the Financial Services Authority (OJK) or the Ministry of Energy and Mineral Resources, impose their own minimum capital requirements that override the BKPM general rule.
• Operational funding adequacy. Even where the legal minimum is met, licensing agencies may assess whether the declared capital is sufficient to fund the business activity described in the application. An unrealistically low capital figure relative to the business plan can trigger scrutiny or rejection.
• Foreign ownership limits. The Positive Investment List restricts or caps foreign ownership in certain sectors. Where a local partner is required, structuring the capital split between foreign and domestic shareholders adds complexity and may affect the total capital needed.

For investors evaluating their options, the main structuring alternatives include: establishing a PT PMA with staged capital increases (paid-up capital at the IDR 2.5 billion floor with a plan to increase as operations scale); opening a representative office (which does not require paid-up share capital but cannot generate revenue in Indonesia); registering a branch of a foreign company (limited to specific sectors such as oil and gas or banking); or entering into a joint venture with a local Indonesian partner to share capital obligations and navigate ownership restrictions. Industry observers note that staggered capital increases are becoming increasingly common as a way to satisfy initial BKPM requirements while preserving cash flow flexibility.

The likely practical effect of BKPM Regulation 5/2025 will be to widen the pool of eligible foreign investors, particularly for service-sector and technology businesses with lower upfront capital needs. Early indications suggest that the lower threshold is already encouraging more enquiries from small and mid-sized foreign enterprises exploring Indonesia company registration for the first time.

Conclusion

The minimum paid-up capital for a foreign company in Indonesia is now IDR 2,500,000,000 under BKPM Regulation 5/2025, a meaningful reduction that lowers the entry barrier for PT PMA formation. However, this figure is a floor, sectoral minimum investment thresholds, KBLI-specific requirements, proof-of-funds standards and foreign ownership limits all remain in force and can push actual capital commitments higher. Investors should verify their specific KBLI codes against the Positive Investment List, prepare robust bank documentation and engage qualified Indonesian corporate counsel before filing through the OSS platform. For tailored guidance on paid-up capital structuring and OSS compliance, consult a qualified Indonesian corporate lawyer.

Sources

1. BKPM JDIH, Peraturan Menteri Investasi/Kepala BKPM No. 5 Tahun 2025 (full text PDF)
2. Peraturan BPK, Statute Registry Entry for BKPM Reg 5/2025
3. UNCTAD Investment Policy Monitor, Indonesia lowers paid-up capital requirement
4. PwC, Investing in Indonesia (guide)
5. Hukumonline, Peraturan Menteri Investasi No. 5 Tahun 2025
6. Kusuma Law Firm, BKPM Regulation No. 5 of 2025 Analysis
7. HHP Law Firm, Legal Alert: BKPM Regulation 5/2025