Explanation of the Legal Basis for Foreign Investment (PMA) Companies.

a. Minimum Capital Requirement

The minimum capital requirement for Foreign Investment (Penanaman Modal Asing - PMA) companies in
Indonesia. Based on Peraturan BKPM (Indonesian Capital Investment Coordinating Board) No. 1 Tahun
2020 ;

Article 6 Paragraph (1) “Pelaku Usaha PMA wajib melaksanakan ketentuan badan usaha, persyaratan
nilai investasi dan permodalan untuk memperoleh Perizinan Berusaha”

“PMA Business Actors are required to carry out the provisions of business entities, investment value, and
capital requirements to obtain a Business License”

Article 6 Paragraph (2) “Pelaku Usaha PMA sebagaimana dimaksud pada ayat (1) harus memenuhi
persyaratan nilai investasi dan permodalan dengan ketentuan total nilai investasi lebih besar dari
Rp10.000.000.000,00 (sepuluh miliar Rupiah), diluar tanah dan bangunan per bidang usaha klasifikasi
baku lapangan usaha Indonesia 5 (lima) digit per lokasi proyek kecuali ditentukan lain oleh peraturan
perundang-undangan;”

“The PMA business owner as referred to in paragraph (1) must meet the investment value and capital
requirements provided that the total investment value is greater than IDR 10,000,000,000.00, excluding
land and buildings in the field of business with the standard Indonesian business field classification of 5
(five) digits per project location unless otherwise stipulated by laws and regulations”

This policy comes into force since the inauguration of the regulation on April 1, 2020.

https://peraturan.bpk.go.id/Home/Details/169028/peraturan-bkpm-no-1-tahun-2020

b. Consequences
Based on Peraturan BKPM No. 1 Tahun 2020

Article 57 Paragraph (9) “Dalam hal Pelaku Usaha sampai dengan peringatan ketiga tidak melakukan
perbaikan data sebagaimana dimaksud pada ayat (6) atau tidak menanggapi surat peringatan maka
dalam waktu 20 (dua puluh) Hari terhitung sejak dikirim surat elektronik ketiga, Pelaku Usaha dapat
dikenakan sanksi pembekuan NIB sampai dengan pencabutan Izin Usaha sesuai ketentuan peraturan
perundang-undangan.”

“If the business owner until the third warning does not make corrections to the data as referred to in
paragraph (6) or does not respond to the warning letter, then within 20 (twenty) days from the third
electronic letter sent, the business actor may be subject to sanctions of freezing NIB up to revocation of
the permit. Business under statutory provisions.”

https://peraturan.bpk.go.id/Home/Details/169028/peraturan-bkpm-no-1-tahun-2020
 C. Share Capital

Based on Undang-Undang No 40 Tahun 2007 Article 32&33, the minimum authorised capital of a
company should be at least IDR 50 million. However, the capital also depends on the size of the
company. If the business is a small-sized business, the authorised capital should be IDR 50 million to IDR
500 million.

For medium-sized companies, the capital should be from IDR 500 to IDR 10 billion, and for large-sized
companies, the capital should be more than IDR 10 billion.

At least 25% of the authorised capital must be issued and paid-up, and it must be proved with valid
payment evidence.

https://peraturan.bpk.go.id/Home/Details/39965