TraceWorthy

Should a foreign director have the PT PMA pay their personal expenses, or fund them personally?

The structural answer turns on four inputs:

1. The director's marginal personal income tax rate (5 to 35 per cent depending on the band)

2. The company's effective corporate income tax rate (the standard 22 per cent, lower for companies qualifying for the Article 31E relief)

3. The substance of the expense (deductible business expense, mixed-use, or pure personal)

4. The documentation the company can assemble to support the position at audit

For most foreign directors of a Bali PT PMA earning above IDR 500,000,000 personally, the post-2023 rules produce a net household cost when personal expenses are funded through the company. The conservative position is to draw clean salary or director's fee, pay personal income tax at the marginal rate, and fund personal expenses from after-tax cash.

Read the full breakdown: https://www.traceworthy.com/company-expenses-vs-benefit-in-kind-indonesia/

The villa question: the post-2023 answer for a PT PMA (53) The 2023 BIK reform under PMK 66/PMK.03/2023 changed the answer for every foreign director in Bali. Worked arithmetic on villa rent, vehicles, school fees, and KITAS costs paid by a PT PMA. (189)

We have hit the road... Team TraceWorthy is taking a well-earned breather. We are heading out of town to a Company retreat for a couple of days.

This is the time for us to take a break from the noisy regulatory changes and intense client work over the past six months, to get out of our heads and into our bodies.

See you next week.

A point that surprises many foreign investors at incorporation: the PT PMA is classified as a large-scale enterprise (usaha besar) regardless of its actual turnover or workforce, under BKPM Regulation No. 5 of 2025.

The classification has four operational consequences.

1. The LKPM Investment Activity Report is filed quarterly, by the 15th of the month following each calendar quarter. The semi-annual cadence available to small enterprises does not apply. A dormant PT PMA still files a nil LKPM with explanatory notes.

2. The company is subject to the full Indonesian corporate tax framework from incorporation onwards: monthly PPh 25 instalments, annual Corporate Income Tax Return (SPT Tahunan PPh Badan), and PPN registration where turnover exceeds IDR 4.8 billion or where the company opts in voluntarily.

3. The smaller-turnover final tax regime under PP 55/2022 as amended by PP 20/2026 (effective 22 April 2026) is no longer available to PT PMAs. The PT PMA operates under the standard 22 per cent corporate income tax rate with the Article 31E 50 per cent reduction for the first IDR 4.8 billion of taxable income where annual turnover is at or below IDR 50 billion.

4. The foreign worker employment framework permits the PT PMA to employ foreign workers under RPTKA, subject to standard restrictions.

Read the full article: https://www.traceworthy.com/idr-10-billion-paid-up-capital-pt-pma/

Paid-Up Capital for a PT PMA: The IDR 10 Billion Question What the IDR 10 billion paid-up capital requirement means for a PT PMA in Indonesia, what BKPM Regulation No. 5 of 2025 requires, and where the money goes.

We made you a calendar.

TraceWorthy publishes a 2026 calendar that maps every recurring deadline for a foreign investment limited liability company (Perseroan Terbatas Penanaman Modal Asing, or PT PMA) against the operational year. The calendar covers the monthly tax and social security cycle, the quarterly investment activity report (Laporan Kegiatan Penanaman Modal, or LKPM) submissions for medium and large enterprises, the annual corporate income tax return, the annual report deed lodged with the Ministry of Law, and the Mandatory Manpower Report (Wajib Lapor Ketenagakerjaan Perusahaan, or WLKP) annual update.

The calendar uses the corrected 15th-of-the-month LKPM deadline under the Investment Coordinating Board (Badan Koordinasi Penanaman Modal, or BKPM) Regulation No. 5 of 2025, with public-holiday adjustments built in where Article 286 paragraph (7) shifts a date. Each month also reflects the Indonesian fiscal holidays that affect the cycle, including Nyepi, Idul Fitri, Idul Adha, Indonesian Independence Day, and the Islamic New Year.

The calendar is available as a printed copy posted to a Bali address or as a digital PDF emailed on request. To request your copy: email [email protected].

The full article on the financial reporting system that runs underneath the calendar is here:

https://www.traceworthy.com/pt-pma-financial-reporting-system/

A Financial Reporting System for a PT PMA in Indonesia For a PT PMA, the Indonesian reporting year runs every month. The financial reporting system underneath the calendar is what survives deadline season.

Many foreign owners running a PT PMA in Bali treat the LKPM as a form they fill in the days before the deadline. The cost of that approach is becoming clearer under BKPM Regulation No. 5 of 2025, in force since 2 October 2025.

The investment activity report (LKPM) is the quarterly filing on the realisation of a licensed investment, which for a PT PMA starts at above IDR 10 billion per KBLI per project location. Medium and large enterprises file on 15 April, 15 July, 15 October and 15 January of the following year, the dates extended from the 10th under the 2025 regulation. A public-holiday adjustment is announced through the OSS system where a date falls on a closed day.

Several points in the 2025 regulation sit alongside the new deadline. Article 27 requires paid-up capital to remain in the company's bank account for at least 12 (twelve) months, so the regulator sees funds committed before realisation begins. Banking, non-bank finance, insurance and upstream oil and gas, previously exempt, are now within the regime and file on the same schedule. The OSS system can apply a sanction automatically where a company reports nil realisation for four consecutive quarters. A stricter standard now applies to parent-company structures under KBLI 64200, which must show substantive activity in their own right.

The full article covers the filing scope, the quarterly calendar, the contents of each report, the sanctions sequence, and the cross-system reconciliation that protects a company from inconsistency-triggered review.

The financial services team at TraceWorthy performs this work for foreign-owned companies across the cycle, from structuring the investment plan at NIB issuance through to the remediation pathway where a sanction is applied.

https://www.traceworthy.com/investment-activity-report-lkpm/

Investment Activity Report (LKPM): PT PMA Quarterly Filing A PT PMA files the LKPM each quarter from the day its NIB is issued. Missing a 15th-of-the-month deadline escalates to NIB revocation, with a remediation pathway alongside.

This photo captures a relationship that TraceWorthy's Founder values very deeply.

Indah Respati has been a long-time client and friend of TraceWorthy. She has given Tracy the kind of education that only comes through real access and patient explanation: coffee plantations, agricultural projects, regional conditions, and the lived reality behind Indonesia’s agricultural sector.

For a foreign national living and working in Indonesia, that generosity is significant. It takes time for someone to explain their industry properly. It takes trust to invite a foreign adviser into local context. Indah has done that with warmth and honesty, and TraceWorthy’s work is better because of it.

Indah also responded personally after the late 2025 Aceh floods and landslides. She gathered donations of money and emergency supplies, then travelled to Aceh Tamiang and Central Aceh to personally deliver assistance. That says something about who she is. Concern became action. Care became logistics. Help reached people through her own hands.

Relationships like this remind us that business in Indonesia can become much richer than a contract or a file. The best relationships teach both sides. They create respect, practical understanding, and the chance to be useful to one another when life becomes difficult.

Thank you, Indah, for your friendship, generosity, and the trust you have shared with Tracy and TraceWorthy.

Our Team Is Your Team.

Lease negotiations in Bali often happen close to family life.

This photo shows Junior Legal Manager Andik Putra negotiating the extension of one of TraceWorthy’s office leases with the lessor’s family. It is a simple image, yet it says a great deal about how trust works inside a business. TraceWorthy’s owner placed the conversation in Andik’s hands because he has shown the care, preparation, and people sense needed for this kind of negotiation.

That is also what clients receive from TraceWorthy’s legal team. A lease conversation is about more than a written term. It affects where people work, how the business plans ahead, and how the relationship with the lessor continues after the document is signed.

Good legal support enters early. It asks the practical questions before expectations harden. It protects the client’s position while respecting the person across the table.

If your business is negotiating a lease or reviewing property arrangements in Indonesia, speak with TraceWorthy before you agree the terms.

Our Team Is Your Team.

A common assumption among foreign owners in Bali is that a PT PMA carries a higher corporate tax rate than a local company. The rate is in fact 22 per cent for both, because tax follows where a company is resident, and a PT PMA is resident in Indonesia.

What changes the figure is turnover. A resident company with annual turnover under IDR 50 billion qualifies for Article 31E relief, which halves the rate to 11 per cent on the income from its first IDR 4.8 billion of turnover. On turnover of IDR 30 billion with IDR 3 billion of taxable income, that saves around IDR 53 million against the flat rate.

Ownership shows up when profits leave Indonesia. A dividend to a foreign shareholder is taxed at 20 per cent at source, which a tax treaty can bring down to 10 or 15 per cent if the shareholder files a certificate of domicile before the payment. Getting that paperwork ready in advance is what protects the lower rate.

The article sets out the 22 per cent rate, a worked Article 31E example, the 19 per cent listed-company rate, and the withholding on dividends and royalties paid abroad.

https://www.traceworthy.com/corporate-income-tax-indonesia/

Why a PT PMA Pays the Same Corporate Income Tax as a Local Company Corporate income tax in Indonesia is 22 per cent for any resident company, foreign or local, with reliefs for low turnover and tax on dividends sent abroad.

You set up a lean foreign-owned company in Bali, two shareholders and a small team, and Indonesian law still classifies it as a large enterprise. Here is why that happens.

Size in Indonesian company law follows one figure, the investment a company declares. A PT PMA commits an investment plan above IDR 10 billion, which places it in the large band. A locally owned company of the same scale receives the same label, so the driver is the size of the investment.

The practical lever sits at set-up. The business classification codes you register decide the investment plan you commit to, so choosing them against your real activity, and matching the capital to that plan, settles what large status costs before it is locked in. Changing it afterwards means a fresh notarial deed at the Ministry of Law.

The article walks through the threshold, what the label changes for reporting and audit, why the lower paid-up capital of IDR 2.5 billion did not move the classification, and how the Philippines and Thailand set comparable floors, shown in a single currency.

https://www.traceworthy.com/pt-pma-large-enterprise-classification/

Why a PT PMA Carries the Large Enterprise Classification Why is a PT PMA classified as a large enterprise? The size follows an investment plan over ten billion Rupiah and applies equally to local companies of the same scale.

A change that took effect in December 2025 affects every limited liability company in Indonesia, foreign-owned PT PMAs included. Approving the annual report now requires a notarial deed lodged with the Ministry of Law within thirty days, where it was previously an internal sign-off.

The wider point for expat owners is that the reporting load is national and applies across every company, local and foreign. The corporate tax rate of 22 per cent is the same for both, and the quarterly investment report a PT PMA files reflects its size classification as a large enterprise.

If you run a company here, the useful step before the next quarter is to put every filing on one shared calendar, with its system and due date noted against it. Eight reporting lines run across five government platforms through the year, so one calendar prevents most missed deadlines.

We have mapped the whole year, including the new annual report requirement, here:
https://www.traceworthy.com/pt-pma-reporting-obligations-indonesia/

PT PMA Reporting Obligations: The Reporting Year Mapped Every Indonesian company files the same reports. Here is the PT PMA reporting obligations calendar, covering corporate tax, VAT, the LKPM and audited accounts.