BKPM Regulation No. 5 of 2025 introduces a significant update to the minimum investment PMA BKPM 5/2025 framework. This regulation refines how foreign investment companies (PMA) operate in Indonesia. It maintains the IDR 10 billion minimum investment rule while adding new clarity to capital placement, retention, and sector-specific exceptions.
Minimum Investment and Paid-Up Capital Under BKPM 5/2025
Under Article 26 of BKPM Regulation 5/2025, a PMA company established as a limited liability company (PT PMA) must now have a minimum issued and paid-up capital of IDR 2.5 billion. Although the overall investment threshold of IDR 10 billion remains unchanged, this rule signals the government’s commitment to stronger investor credibility and real capital commitment.
To ensure compliance, the regulation adds a capital retention requirement. The deposited capital must stay in the company’s account for at least 12 months from the date of placement. However, the funds may be used for legitimate business purposes such as:
- Purchasing fixed assets;
- Construction and facility development; or
- Operational expenditures.
This approach ensures transparency and reinforces financial discipline among foreign investors. It also helps prevent cases where the declared paid-up capital exists only on paper.
Sector-Specific Exceptions to Minimum Investment PMA BKPM 5/2025
While the general rule applies to all businesses, BKPM Regulation 5/2025 recognizes the need for flexibility in certain sectors.
1. Trade, F&B, Construction, and Single-Line Manufacturing
For businesses engaged in wholesale trade, food and beverage services, construction, or industrial operations with a single production line, the minimum investment value remains at IDR 10 billion. The calculation, however, may vary depending on:
- The structure of the KBLI classification; and
- The geographical location of the project or facility.
This ensures alignment between regulatory expectations and industry characteristics. Moreover, it preserves investment quality across different business scales.
2. Property, Accommodation, and Agricultural Sectors
Certain capital-intensive sectors — including property development, accommodation services, agriculture, plantations, livestock farming, and aquaculture — may include land and building value as part of their investment realization.
This adjustment reflects the economic nature of asset-based industries. By allowing land and building costs to count as part of total investment, the regulation supports a more accurate financial representation of these projects.
Policy Objective: Strengthening Transparency and Competitiveness
Through the minimum investment PMA BKPM 5/2025 framework, the government aims to:
- Strengthen investor accountability and corporate governance;
- Ensure genuine capital injection and asset utilization;
- Harmonize investment standards across sectors; and
- Build a predictable and competitive business environment.
In essence, this dual-layer framework — IDR 10 billion minimum investment per KBLI and IDR 2.5 billion paid-up capital — reflects Indonesia’s effort to remain open to investors while maintaining responsible financial oversight.
Moreover, the new capital retention rule ensures that foreign investors make meaningful contributions to Indonesia’s economy, not just formal compliance.
Conclusion
The new minimum investment PMA BKPM 5/2025 requirements mark an important step toward improved regulatory transparency and sustainable investment growth. By setting a clearer capital structure, a mandatory 12-month retention period, and flexible asset-based rules, Indonesia strengthens its position as an open, credible, and competitive investment destination.
Foreign investors are encouraged to review their capital structure, verify their compliance with BKPM’s latest provisions, and align their investment plans within the OSS-RBA system. Understanding these requirements early helps ensure a smoother setup and long-term operational success in Indonesia.