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19

New Minimum Requirements of Paid-Up Capital & Investment for Foreign Direct Investment (PMA)

On April 1st, 2021, the Investment Coordinating Board (“BKPM”) had issued regulation No. 4 of 2021 concerning Guidelines and Procedures for Risk-Based Licensing and Investment Facilities (“BKPM Regulation 4/2021”) following the changing approach related to licensing from a commitment-based system to risk-based system, as stipulated in Law No. 11 of 2020 concerning Job Creation. Though the above-mentioned regulation is mainly about government services on licensing issuance, it also covers other government services related to Investment Facilities and their requirements. Two of the amended provisions are regarding minimum requirements for investment and issued/paid-up capital of several types of businesses, including those which are operated by foreign direct investment companies (“PMA”).

Article 12 section (7) of BKPM Regulation 4/2021 has stated explicitly that the minimum issued/paid-up capital for PMA, other than the required minimum investment (which will be mentioned below), is at least Rp.10.000.000.000,00 (ten billion Rupiah) unless stipulated otherwise by the Indonesian positive laws. The amendment mentioned above is a drastic shift from the present regulation that required only a minimum total of  Rp.2.500.000.000,00 (two billion and five hundred million Rupiah) as issued/paid-up capital, or 25% of the minimum required authorized capital for PMA.

The said regulation further stipulates that the amount of investment required for every five-digit code of Indonesia Standard Industrial Classification / KBLI (outside lands and buildings) is more than Rp.10.000.000.000,00 (ten billion Rupiah) excluding a few business sectors in which the minimum requirements are regulated separately in Article 12 section (5). The specialized requirements are as follows:

Business Sectors Minimum Investment  
Wholesale Trade > Rp.10.000.000.000,00 (ten billion Rupiah) outside lands and buildings for every 4 first-digit code of KBLI
Food & Beverage Services > Rp.10.000.000.000,00 (ten billion Rupiah) outside lands and buildings for every 2 first-digit code of KBLI
Construction Services (consultation services, construction works, or integrated construction works) > Rp.10.000.000.000,00 (ten billion Rupiah) in one project outside lands and buildings for every 4 first-digit code of KBLI
Industry services that produce several different products categorized in different five digit-code KBLI in 1 line of production > Rp.10.000.000.000,00 (ten billion Rupiah) outside lands and buildings
Property Construction and Business with property unit types including:
a.      A whole building or integrated residential complex; > Rp.10.000.000.000,00 (ten billion Rupiah) including lands and buildings
b.      A unit not as a whole building or integrated residential complex > Rp.10.000.000.000,00 (ten billion Rupiah) outside lands and buildings
The legal entities exempted from the said condition as mentioned in Article 13 juncto Article 9 section (1) alphabet c and d, section (3) and (4) of BKPM Regulation 4/2021 are:
  • Representative Offices, defined as an Indonesian person or a person of foreign nationalities or a business entity which is a representation of a foreign entrepreneur who has obtained approval of office establishment in the territory of the Republic of Indonesia.
  • Foreign Business Entities, defined as any foreign business entity incorporated outside of the Republic of Indonesia’s territory and is conducting business and/or activities in specified sectors.
BKPM Regulation 4/2021 will be effective from June 2, 2021, and is a non-retroactive regulation. This means that such requirements will apply only to PMA licensing applications submitted and approved after the aforementioned enactment date. Furthermore, no other regulations, formal instruction, or circular letters have been issued related to PMA which have been established after the issuance of the said regulation but have not yet submitted any licensing application.

Should you need legal advisory or consultation for investment in Indonesia, please do not hesitate to contact us or drop us an email at info@schinderlawfirm.com.

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Dear valued Visitor,

Data is a valuable currency in this new world. In the midst of digital transformation, the Indonesian government has taken the final decision to pass the Pelindungan Data Pribadi (PDP) Bill by September 2022. The PDP Law applies to all businesses established in Indonesia and puts the consumer in control. The task of complying with this regulation falls upon businesses.

The PDP Law affects a variety of business operations, including how your sales team prospect and how marketing initiatives are managed. Businesses have had to reassess their business procedures, applications, and forms. Additionally, all businesses that work with personal data should designate a Data Protection Officer (DPO) or data controller to oversee PDP compliance.

In line with this spirit, it gives us great pleasure to announce and share with all our esteemed clients and business associates that Schinder Law Firm is prepared to assist your company to understand the impacts of the Personal Data Protection Law (PDPL) and take the required measures to comply with the law. Our Privacy, Data Protection, and Cybersecurity practice group is a pioneer in providing data privacy law services in Indonesia. Personal data protection services include but are not limited to:

  • Assessing the existing systems, processes, and controls, etc.
  • Providing provide gap assessment on the existing systems, processes, and controls, etc.
  • Developing and ensuring contracts and agreements comply with the PDP Law
  • Developing policies, best practices, and procedures
  • Advising on the security of personal data and managing data breaches
  • Acting as the Data Protection Officer (DPO) and advising upon the appointment, role, and responsibilities of a data protection officer
  • Advising on cross-border transfers of personal data
  • Carrying out data protection impact assessments and data protection audits
  • Recommending other necessary corrective actions in order to comply with the PDP Law
  • Training on the PDP Law tailored to clients’ businesses

We look forward to many more opportunities in the year ahead with your continued support and trust. For consultation, please send us a WhatsApp or Email.

Warmest regards,
Naz Schinder
Managing Partner

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Keep Up with the New Law in Indonesia: Personal Data Protection

  • Assessing the existing systems, processes and controls, etc.
  • Providing provide gap assessment on the existing systems, processes and controls, etc.
  • Developing and ensuring contracts and agreements comply with the PDPL.
  • Developing policies, best practices and procedures.
  • Advising on security of personal data and managing data breaches.
  • Acting as the Data Protection Officer (DPO) and advising upon the appointment, role and responsibilities of a data protection officer.
  • Advising on cross-border transfers of personal data.
  • Carrying out data protection impact assessments and data protection audits.
  • Recommending other necessary corrective actions in order to comply with the PDPL.
  • Training on the PDPL tailored to clients’ businesses.
Privacy, Data Protection and Cyber Security
We help our clients to understand the impact of the Personal Data Protection Law (PDPL) on their companies and take the required measures to comply with the law.
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