Once the shareholders have completed the Model I/PMA-form and affixed their signatures, the application will be reviewed, and when the BPM or other institution feels that all the information and documents provided are sufficient, then it shall be declared “complete”. This process involves much cross checking between the BPM and other Ministries and will be evaluated in terms of suitability in various respects such as sectoral policies, technology, market, and finance.

The Investment Approval issued by BPM, Indonesian Embassy, Consulate General, Consulate or BKPMD serves as the basis for the Deed of Articles of Association to be drawn up by a Notary in the Indonesian language. The PMA Company is considered to be legally established as of the date of the signing of the Deed of Articles of Association by the shareholders in front of the Notary, even though formal approval from the Ministry of Law and Regulations (formerly known as the Ministry of Justice or “the MOJ”) has yet to be sought. However, until the Ministry of Law and Regulations’s Approval is obtained, all risks raised as results of the company’s transactions will be personally and severally held by the shareholders. That is, the limited liability does not come into effect until that time.

For the client information, there are three standard models of Deeds of Articles of Association issued by the Ministry of Law and Regulations, but Models II and III apply for most PMA companies. The difference between Model II and III is simply in the Article 9 – Transfer of Shares.

The signing procedure with the Public Notary requires the following documents and information:

• Relevant documents of those stated as directors and commissioners, e.g. copies of passports, identity cards, and addresses;
• Names, copies of passports or identity cards, and addresses of the persons who are going to sign the deed for and on behalf of the shareholders. Such persons can appoint proxies to represent them by providing Powers of Attorney. Please note that the Power of Attorney should be legalized by the notary abroad and authenticated by Indonesian Embassy in the country of residence of the signer. Please also provide copies of passports or identity card and addresses of the proxy holders.

At the time of establishment of a Limited Liability Company (Perseroan Terbatas – PT in Indonesian), at least 25% of the PT’s authorized capital must be subscribed, and each subscription of capital must have at least 50% of the par value of each share paid in, with legal proof of the payment. All of the shares that are issued must be 100% paid in prior to obtaining Ministry of Law and Regulations approval. The draft deed of establishment proposed by the founders, in certain cases, may be revised accordingly by the Ministry of Law and Regulations.

As soon as the Notary has issued the Notarial Deed of the Articles of Association, the PMA Company can commence operations. However, the shareholders will be personally liable for any actions taken by the company until the notarial deed is approved by the Indonesian Ministry of Law and Regulations.

The further steps to be taken once the Notary has issued the Articles of Association in order to obtain Ministry of Law and Regulations approval, are as follows :

• Obtain a Letter of Domicile from the building management where the company is located (in case of rent) or Letter of Domicile issued by District Government / Municipal.
• Obtain a Tax Identification Number (NPWP) and a VAT-able Firm Number to the Tax Office.
• Open a PMA bank account in Indonesia under the name of PMA Company. It is often advisable to open a bank account in a foreign owned bank or a local branch of a foreign bank rather than a local bank as the procedure is more straight forward.
• Transfer the amount of the PMA Company ‘s paid-up capital to the PMA Company ’s bank account.
• Submit via the Notary the Company’s Deed of Articles of Association to the Ministry of Law and Regulations to obtain its approval, along with the transfer slip stating that the paid-up capital has been transferred by the shareholders, copy of the Tax Identification Number, and the Letter of Domicile. We will assist the client in liaison with the Notary. The process of obtaining the approval will take approximately 60 days from submission of the application.
• Take the approved Deed of Articles of Association to the Trade and Industry Department for company registration (This is done by the Notary). Finally, it will be published in the State Gazette. Again we will assist the client in liaison with the Notary.