Understanding the 0.5% Tax for PT PMA in Indonesia

Setting Up a PT PMA in Bali – What You Need to Know About the 0.5% Tax

If you’re planning to set up a company in Bali as a foreigner, you’ve probably heard about the PT PMA (Foreign Investment Company) structure. One of the most common questions investors ask is: “How much tax will my company need to pay?”. Under Indonesia’s tax regulation (Government Regulation No. 23 of 2018), certain companies—including PT PMA—can benefit from a final income tax of only 0.5% on their gross revenue.

What Does the 0.5% Tax Mean?

The 0.5% tax is a simplified scheme for small to medium businesses. Instead of calculating complex taxable income, the company simply pays 0.5% of total gross turnover.
For example:

• If your PT PMA makes IDR 1 billion in annual revenue (approx. USD 65,000),
• The company pays only IDR 5 million (USD 325) in tax.

This scheme is designed to support new businesses entering the Indonesian market, making the financial burden much lighter during the early years of operation.

Who Can Use the 0.5% Tax Facility?

• Newly established PT PMA with annual revenue under IDR 4.8 billion (approx. USD 312,000).
• Companies within the first 3 years of operation (for PT PMA specifically, the facility is valid for 3 years before moving to the standard tax regime).

After the period ends, your company will move to the regular corporate income tax scheme (11% – 22% of net profit, subject to adjustment).

Why Is This Important for Foreign Investors?

For foreigners who want to set up company in Bali as foreigner, the 0.5% tax scheme offers:

• Lower initial tax costs, so you can allocate more funds to marketing, hiring, or property.
• Simplified compliance, making it easier to focus on growing your business instead of complicated accounting.
• Legal certainty, as the scheme is fully regulated by Indonesian law.

Conclusion

If you’re considering Bali as your investment destination, understanding tax obligations is crucial. The 0.5% final income tax for PT PMA makes Indonesia one of the most attractive places in Southeast Asia for starting a new business.

At Indoned Consultancy, we help foreign investors set up company in Bali as foreigner legally, safely, and efficiently—while ensuring your tax compliance is smooth from day one.

Contact us today for a free consultation and let’s structure your investment in Bali the smart and tax-efficient way.

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.