Starting a company is a significant decision that requires careful planning, including selecting the most appropriate type of business entity. For local entrepreneurs, a Domestic Investment Limited Liability Company (PT PMDN) is one of the best options to establish a business entirely owned by Indonesian citizens.
This article will help you understand PT PMDN in depth, from its definition and advantages to the steps to establish one.
What is PT PMDN?
PT PMDN, or Domestic Investment Limited Liability Company, is a type of company wholly owned by Indonesian citizens. In PT PMDN, all shares must be entirely held by Indonesians, with no foreign capital involvement. This makes it an ideal choice for local entrepreneurs aiming to build a business through national partnerships.
As a legal entity, PT PMDN has a similar organizational structure to a standard Limited Liability Company (PT). However, one of its main advantages is the ease and special facilities available for specific business sectors, particularly those aligned with national development priorities.
Read Also: 7 Differences Between Cooperatives and PT: Understanding Their Characteristics
Differences Between a Standard PT and PT PMDN
Although both are Limited Liability Companies, PT PMDN has several key differences compared to a standard PT:
- Share Ownership: PT PMDN requires all shares to be owned by Indonesian citizens, while a standard PT may involve foreign investors.
- Specific Business Sectors: PT PMDN often receives special facilities for priority business sectors, such as tax incentives or infrastructure support.
- Legal Requirements: PT PMDN must comply with specific regulations stipulated in Presidential Regulation No. 10 of 2021 on Business Fields for Investment.
Read Also: How to Check PT Names: A Complete Guide for Business Legalities
Advantages of PT PMDN
PT PMDN offers several benefits for local entrepreneurs, including:
- Tax Facilities: Reductions in net income by up to 30% of the total investment, accelerated depreciation and amortization, and extended loss compensation periods.
- Government Support: PT PMDNs that meet national priority criteria can enjoy benefits such as tax exemptions and infrastructure subsidies.
- Local Partnerships: Easier collaboration with local small, micro, and medium enterprises (MSMEs).
Read Also: Differences Between PT and PD: Business Structures in Indonesia
Requirements for Establishing PT PMDN
To establish a PT PMDN, the following requirements must be met:
- Number of Founders: At least two individuals.
- Management Structure: Must have at least one Director and one Commissioner.
- Company Name: Must consist of three words and not use foreign languages.
- Capital: As specified in the deed of establishment.
- Share Ownership: All founders must purchase shares, and married couples must have a prenuptial agreement if jointly holding shares.
Read Also: Who Can Establish a PT in Indonesia?
Required Documents
The following documents are needed to establish a PT PMDN:
- Copies of ID cards (KTP) of shareholders and company managers.
- Copies of Tax Identification Numbers (NPWP) of company managers.
- Stamped company domicile certificate.
- Stamped statement of paid-up capital.
- Business Activity Classification (KBLI) statement letter.
- Stamped power of attorney (if represented).
Read Also: PT Legal Documents: A Complete Guide for Companies
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