Closing a PT PMA: A Guide to the Dissolution and Liquidation Process
Key Takeaways
Dissolving a PT PMA requires a formal legal process governed by Indonesian company law, involving general shareholder resolutions, public notifications, and government recordation.
The process involves two General Meetings of Shareholders, three separate notifications to creditors and the Ministry of Law, and a final recordation step to extinguish the company's legal entity status.
Creditors are afforded two separate 60-calendar-day windows to submit claims or objections throughout the process.
Under straightforward circumstances with no third-party objections, the process takes approximately 6 months — though delays, particularly at the recordation stage, are not uncommon in practice.
Tax-related matters, including tax settlement and revocation of the company's NPWP (tax ID), are handled separately and should be managed in coordination with qualified tax consultants.
Introduction
Closing a foreign owned company (PT PMA) in Indonesia is no simple undertaking. The process is governed by Indonesian company law and requires strict adherence to a structured dissolution and liquidation procedure. Whether driven by a strategic exit, a restructuring of regional operations, or a wind-down of business activity, understanding what this process entails and how long it realistically takes. It is essential for any foreign investor or corporate entity looking to exit the Indonesian market cleanly and compliantly.
This article sets out the key legal steps required under Indonesian company law to process company dissolution and liquidation.
It is important to note that other steps relating to tax settlement and revocation of the company's tax ID (NPWP) are not covered here and should be discussed with and handled by a qualified tax consultant.
The Liquidation Procedure
Step 1 — 1st General Meeting of Shareholders (GMS)
The process formally commences with a General Meeting of Shareholders, at which the shareholders approve the dissolution and liquidation of the company, as well as the appointment of a liquidator. The shareholders' resolutions are then restated into a notarial deed for further processing by the notary.
Step 2 — 1st Notification
Following the GMS, the liquidator is required to notify the proposed dissolution to all creditors through a newspaper with national circulation and the Indonesian state gazette (through the notary), as well as to the Minister of Law ("MOL", through the notary). This notification must be made at the latest 30 days after the company's dissolution. From the last date of notification — being the newspaper or state gazette publication, whichever is later, creditors are given 60 calendar days to submit any claims against the company.
Step 3 — 2nd Notification
Once the first creditor claim period has passed, the liquidator proceeds to notify the proposed use of the liquidated assets to all creditors through a newspaper with national circulation and the Indonesian state gazette (through the notary), and to the MOL (through the notary). Creditors are then given a further 60 calendar days from the date of this announcement to submit any objections to the proposed plan of distribution of the liquidated assets.
Step 4 — 2nd General Meeting of Shareholders (GMS)
Upon completion of the liquidation process, a second General Meeting of Shareholders is convened. At this meeting, the GMS grants release and discharge to the liquidator. As with the first GMS, the shareholders' resolutions are restated into a notarial deed for further processing by the notary.
Step 5 — 3rd Notification
Following the second GMS, the liquidator notifies the MOL (through the notary) and announces the final result of the liquidation process in a newspaper with national circulation. This must be done at the latest 30 calendar days after the second GMS.
Step 6 — Recordation
In the final step, the MOL records the cessation of the company's legal entity status, deletes the company's name from the company registry, and announces the same in the Indonesian state gazette. It is at this point that the PT PMA is formally and legally dissolved.
Timeline Expectations
Procedurally and with the assumption that the process is straightforward (without objections from third parties), the process will take approximately 6 months. That said, it is not uncommon for this process to take longer in practice, especially with respect to the recordation step at the MOL level.
Companies should therefore plan accordingly and avoid making assumptions about a quick exit. Early engagement with counsel and proactive coordination with the notary from the outset will help minimise unnecessary delays.
Speak to Our Team
Dissolving a PT PMA is a process that demands careful legal and administrative coordination. If you require further information on the dissolution process or need assistance navigating the liquidation of your PT PMA, please do not hesitate to reach out to us at Bali Corporate Services. Our team is here to guide you through every step of the process.
