Operational Obligations of a PT PMA in Indonesia: What Every Foreign Investor Should Know

As a foreign investor especially from Europe looking to purchase property or invest in Indonesia, one of your key tools is establishing a PT PMA (a Foreign Investment Limited Liability Company, “Perseroan Terbatas Penanaman Modal Asing”). But creating the company is just the beginning. To stay legal, efficient, and credible, a PT PMA must continuously satisfy various operational obligations in Indonesia. In this article we will walk you through those duties (licensing, tax, reporting, labor, compliance) grounded in Indonesian regulation and real experience  in a way that’s understandable, strategic, and actionable.

Tax & Fiscal Obligations

• Withholding Taxes & Monthly Tax Reporting
• The company must act as withholding agent (Pemotong/Pemungut PPh) for various payments (employee salaries PPh 21, vendor services PPh 23, lease payments, etc.). The withheld tax must be remitted monthly to the tax office.
• Monthly prepayment (PPh 25) obligations (based on estimates from prior year’s tax liability) apply.
  
•  Annual Corporate Income Tax & Reporting
• A PT PMA must submit Annual Corporate Income Tax Return (SPT Tahunan Badan) by end of April of the following year.
• Financial statements (balance sheet, profit & loss) must accompany the return.
• Penalties apply for late filing or non-compliance.
  
• Local Taxes & Other Levies
• Depending on location and business type, local taxes (property tax, land & building tax, hotel & restaurant tax, regional levies) may apply.
• If operating in certain sectors (e.g. tourism, real estate), you may need to pay “retribution” or local government fees.
• In case of sponsoring expatriates, manpower levies and permit costs will apply.

Investment Reporting & Compliance

• LKPM – Investment Activity Report
• A PT PMA must file LKPM (Laporan Kegiatan Penanaman Modal / Investment Activity Report) periodically to the BKPM (Indonesia Investment Coordinating Board). The frequency (quarterly or semiannual) depends on the stage of the business.
• The LKPM captures progress against investment plan, capital realisation, employment, problems encountered, and future projections. 
• Failure to submit may lead to administrative sanctions or blacklisting.
  
• Compliance Even If Inactive
• Even an inactive (non-operational) PT PMA must continue fulfilling tax filings (often “nil” reports), submit LKPM, maintain NPWP, and OSS updates. 
• Neglecting obligations can lead to penalties, license revocation, blacklisting, or inability to resume operations later.

Labor, Employment & Social Security

• Compliance with Employment Law
• Indonesia’s labor law is strict: you must issue written employment contracts, abide by minimum wage, overtime rules, holiday benefits, termination procedures, severance, etc.
• The PT PMA is required to pay into BPJS Kesehatan (Health Insurance) and BPJS Ketenagakerjaan (Manpower Social Security) for employees.
• For foreign employees / directors: manage work permits (IMTA), expatriate quota, and immigration compliance.
• HR Records, Reporting & Manpower Plans
• Maintain HR records, payroll ledgers, attendance, social security records.
• If the business sponsors expatriates, a Manpower Plan (Rencana Penempatan Tenaga Kerja Asing / RPTKA) must be approved by the Ministry of Manpower.

Conclusion

Owning Indonesian property or investing via a PT PMA holds great potential  but it also carries serious ongoing obligations. The operational duties (licensing, tax, employment, reporting, corporate governance) are not mere formalities: they are the framework that keeps your business legal, credible, and future-proof. For a European investor, mastering these responsibilities with a clear roadmap and trusted local advisors will give you confidence and control.

Get free consultation with IndoNed Consultancy, your trusted partner for foreign investment and company setup in Indonesia.

Disclaimer

The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.