On 2 October 2025, the Minister of Investment/Head of the Investment Coordinating Board issued regulation No. 5 of 2025 (“BKPM Regulation 5/2025”) introducing a lower minimum capital requirement for foreign investment companies (“PT PMA”).

Under this regulation, PT PMAs are required to have a minimum issued and paid-up capital of IDR 2.5 billion (approximately USD150,000, assuming USD1 = IDR16,664 based on Bank Indonesia’s middle rate as of 3 November 2025), down from IDR 10 billion under BKPM regulation No. 4 of 2021. This amount must be fully paid-up at the time of establishment.  BKPM Regulation 5/2025 also introduce a 12-month capital lock-up requirement, in which this issued and paid-up capital may not be transferred from the company’s account for a minimum period of 12 (twelve) months from the date of payment, except for purposes related to asset acquisition, building construction, and/or company operations.

Note that certain sector-specific regulations, particularly those applicable to entities operating in the financial services sector (e.g. banks, financing companies, insurance companies, and securities companies), may set higher issued and paid-up capital requirements.

In addition to the minimum paid-up capital, PT PMA must also satisfy a “minimum investment value” requirement, of IDR 10 billion (excluding land and buildings) for each business line (five-digit KBLI code) and per project location. The term investment value refers to the total amount of funds allocated to carry out business activities, which includes fixed assets (such as machinery, production equipment, vehicles, and other tangible assets directly related to the business activities) and working capital.

This minimum investment requirement was first introduced under BKPM Regulation No. 13 of 2017. Under BKPM Regulation No. 5 of 2025, the same provision continues to apply, with “location” now clarified to be government administrative boundaries. For instance, for F&B businesses, one location covers a city or regency, so multiple outlets in the same area count as one. For electric vehicle charging stations, one location covers an entire province.

The minimum investment value requirement is distinct from the minimum paid-up capital requirement; however, any paid-up capital contribution may be used to satisfy the minimum investment value requirement. The implementation of such minimum investment must be reported in the company’s Investment Activity Report (or LKPM), which must be submitted quarterly by PT PMA.

*Marwa Hasna Loekman (Associate) assisted in the preparation of this insight

________________________________________________________________________________________________________________________________________

Disclaimer: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information.