Understanding the IDR 10 billion minimum investment for Foreign Investment Companies (PT PMA) is crucial. It’s not the paid-up capital but the total project value, ensuring large-scale investments that avoid MSME competition. Learn the distinction between paid-up capital and investment value.
If the minimum paid-up capital of a Foreign Investment Companies or PT PMA is IDR 2.5 billion, why do we often hear about the IDR10 billion requirement?
Because this second number relates to a completely different concept: minimum investment value, not paid-up capital. Under BKPM Regulation No. 5 of 2025, foreign investment companies are classified as large-scale businesses. As a general rule, a PT PMA must have a total investment value of more than IDR 10 billion, excluding land and buildings, per 5-digit KBLI business activity per project location.
This requirement is designed to ensure that foreign investors operate at a large-business scale and do not compete directly in the micro, small, and medium enterprise (MSME) segment, which is generally reserved for domestic businesses.
The term “investment value” refers to the total value of the business project. It may include machinery, equipment, infrastructure, and other capital expenditures. Importantly, this amount does not have to come entirely from shareholders’ equity. It can be financed through a combination of paid-up capital and lawful funding sources such as loans or retained earning.
Also Read: Understanding IDR 10 Billion Minimum Investment Concept for Foreign Investment Company
This is where the distinction becomes critical:
- Paid-up capital (minimum IDR 2.5 billion). This is equity injected into the company and forms part of its corporate capital structure under company law.
- Investment value (generally above IDR 10 billion), is the total value of the business project and is used by the government to determine whether the business qualifies as large-scale foreign investment.
They serve different regulatory purposes, are reported through different mechanisms, and should never be treated as interchangeable.
In short:
- IDR 2.5 billion is about how much equity must be inside the PT PMA.
- IDR 10 billion is about how large the business project must be.
Tulisan ini pernah dimuat dalam Linkedin Andi Akhirah Khairunnisa, dengan judul “Understanding IDR 10 Billion Minimum Investment Concept for Foreign Investment Company” dan telah mendapatkan persetujuan untuk dipublikasikan.
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