PT PMA vs CV in Bali: Which Company Structure Do You Need?

The short answer

Use a PT PMA. If you are a foreign national wanting to own and operate a business in Bali, there is no legitimate alternative. A CV may look attractive because of lower costs, but it creates legal exposure that can — and does — result in lost businesses, frozen assets, and deportation.

This article explains exactly why.

What is a CV?

A CV (Commanditaire Vennootschap, or Persekutuan Komanditer in Indonesian) is a limited partnership. It consists of:

• Active partners (Sekutu Aktif) — manage the business and have unlimited liability
• Silent partners (Sekutu Pasif) — invest capital and have limited liability

The critical restriction: a CV must have at least one Indonesian citizen as an active partner. Foreigners can only participate as silent partners, which means they have no legal management authority over the company.

What is a PT PMA?

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a foreign-owned limited liability company. It allows:

• 100% foreign ownership in most sectors
• Foreign directors and commissioners with full management authority
• Investor KITAS sponsorship — your legal residency
• Corporate bank accounts in the company's name
• Employment of foreign workers through IMTA permits

Side-by-side comparison

Why foreigners use CVs — and why it fails

The appeal of a CV is obvious: it's cheaper, faster, and simpler. Some agents market it as a "shortcut" for foreigners who want to avoid the complexity and cost of a PT PMA.

The typical arrangement works like this:

1. A foreigner finds an Indonesian partner (often a friend, employee, or romantic partner)
2. The Indonesian registers as the active partner
3. The foreigner invests the capital and runs the business day-to-day
4. A private agreement (side letter) gives the foreigner "control"

This arrangement is illegal. Using a nominee to circumvent foreign ownership restrictions violates Indonesian investment law (Law No. 25/2007). The private side agreement has no legal standing in Indonesian courts.

What can go wrong

These are not hypothetical scenarios — they happen regularly in Bali:

• Partner disputes — your Indonesian partner is the legal owner. If the relationship sours, they can change the bank signatories, lock you out of the office, and operate the company without you.
• Death or divorce — if your Indonesian partner dies, the company passes to their heirs, not to you. In a divorce involving a joint CV, Indonesian family courts make the decisions.
• Immigration enforcement — working in a CV as a foreigner without a work permit is illegal. Immigration raids do happen, and penalties include fines and deportation.
• Bank account access — the corporate bank account is in the Indonesian partner's name. They have full, sole authority over the funds.
• No legal recourse — if you try to sue for your investment back, you'd have to prove an illegal nominee arrangement in court, which exposes you to prosecution as well.

The cost difference is smaller than you think

The initial setup cost difference between a CV and PT PMA is approximately IDR 30–60 million (EUR 1,700–3,400). Spread over the life of a business, this is negligible — and far less than the cost of losing your business to a partner dispute.

The PT PMA's higher annual cost is primarily driven by proper accounting and KITAS renewal — both of which you need regardless of your company structure.

When a CV does make sense

A CV is appropriate when:

• All partners are Indonesian citizens
• The business is a small local operation (warung, local retail)
• There is no foreign investment or involvement

If any foreigner is involved in ownership, management, or significant capital investment, a CV is the wrong structure.

How to convert a CV to a PT PMA

If you're currently operating through a CV and want to legitimise your position:

1. Consult a legal advisor — assess your current situation and risks
2. Register a new PT PMA — you cannot convert a CV to a PT PMA; you register a new entity
3. Transfer operations — migrate contracts, clients, and assets to the PT PMA
4. Close the CV — dissolve the old entity properly
5. Apply for KITAS — through your new PT PMA

This process typically takes 6–8 weeks and costs IDR 50–90 million including the new KITAS.