What Is a PMA Company and Why You Might Need One in Sumba
How Foreigners Can Own Land in Indonesia: The PMA Company Guide
If you’re planning to buy land in Sumba to run a retreat, Airbnb, or any type of tourism business, you’ve likely heard of a PMA. But what exactly is it, and why might you need one?
This guide breaks it all down: what a PMA company is, how it helps you legally own land in Indonesia, and why it’s the gold standard for foreign investors at Sumba Sunset Cliff. We’ll also bust some common myths that confuse first-time buyers.
Want to see what makes this land so special? Discover Our Land at Sumba Sunset Cliff
What Is a PMA Company in Indonesia?
PMA stands for Penanaman Modal Asing, or Foreign Investment Company. It’s a company structure that allows foreign individuals or entities to legally invest and operate in Indonesia.
The most important part?
A PMA can legally hold land under an HGB title (Right to Build). Giving you long-term, renewable control of your investment.
Thousands of resorts, hotels, and retreats across Bali, Lombok, and Sumba are owned through this structure. It's the most secure way for foreigners to run land-based businesses in Indonesia.
If you're still exploring ownership types, read: 10 Questions to Ask Before Buying Land in Sumba
Why Foreigners Use a PMA Company to Buy Land in Sumba
Sumba is at the start of a major eco-tourism wave. It’s affordable, zoned for growth, and full of potential but to do things properly and legally as a foreigner, you’ll want to go the PMA route.
Here’s why a PMA might be right for you:
You want to legally control land long-term
You plan to earn income from Airbnb, retreats, or hospitality
You need tourism or building permits
You want to apply for a long-stay visa
You’re building a business that aligns with Indonesia’s eco-tourism goals
Leasehold vs PMA in Indonesia: Key Differences for Foreign Land Buyers
If you’re deciding between leasehold or a PMA company, here’s what you need to know: in plain English.
Leasehold (Hak Sewa):
You lease land from a local landowner
Ideal for personal homes or small retreats
Contract terms are usually 25–30 years, extendable
You don’t own the land, just the right to use it
No company needed
Risk depends on the quality of the contract
PMA Company (Foreign-Owned):
You create a legal Indonesian company
Your company owns the land via HGB title
Valid for up to 80 years (30+20+30 terms)
Full legal ownership structure for foreigners
Needed for business and tourism operations
Gives you the strongest long-term protection
Learn how smart buyers are making the shift: Sumba vs Bali: Why Smart Buyers Are Moving East
How We Set Up Your PMA Company (You Don’t Lift a Finger)
Setting up a PMA company used to mean dealing with confusing portals, lawyers, and weeks of paperwork. But we’ve built a turnkey service for buyers at Sumba Sunset Cliff so that everything is done for you.
Here’s what we handle:
Registering your PMA with the Indonesian government
Getting you a Business ID (NIB) through OSS
Applying for all tourism and building permits
Assigning you a tax assistant to manage reporting
Providing a legal address and all required documentation
Advising on design, compliance, and building approvals
You don’t need to be fluent in Indonesian bureaucracy. We’ve got your back.
Common Misconceptions About PMA Companies (Debunked)
Foreign investors often find confusing or outdated information online. Let’s clear up some of the biggest myths:
“My PMA is only valid for 30 years. Then I lose my land?”
Not true.
Your PMA can hold land under an HGB title (Hak Guna Bangunan). This title is:
Valid for 30 years initially
Extendable for 20 years
And again for another 30 years
That’s a total of 80 years of legal ownership, with renewal rights written into law. And if your business continues to operate, you’ll continue to be renewed. Just like in Bali or Jakarta.
“I need to pay 10 billion rupiah ($650k USD) up front to start a PMA.”
Wrong again.
The 10 billion IDR figure is a total investment expectation. Not a deposit or minimum bank transfer.
Here’s how it really works:
The Indonesian government wants to see that your company intends to invest in the economy over time.
There’s no specific deadline for reaching that number.
All your expenses toward the business: land, construction, staff, furniture, solar, etc. Count toward that total.
These expenses are reported through your LKPM investment reports.
So, if you’re actively building or running your retreat, you’re already showing good faith, and that’s exactly what the government looks for.
Who Should Use a PMA Company in Sumba?
If any of the below sound like you, a PMA is likely your best option:
You want to build a retreat, Airbnb, co-living space, or wellness stay
You plan to earn revenue from your land or structures
You want to own land securely and legally
You need access to permits, visas, or formal business tools
You want to scale your vision over time
If you're just looking for a personal escape home with no income plan, leasehold might be a better fit. But for anything serious, PMA is the way to go.
Real-World Example: How Sarah Used a PMA to Build Her Dream in Sumba
Sarah, an entrepreneur from the UK, wanted to create an off-grid wellness retreat with three bungalows and a yoga shala. She bought land at Sumba and set up a PMA with our help.
Here’s what we did for her:
Created a legal PMA structure in her name
Secured her HGB land title
Got permits for tourism use and sustainable building
Assigned her a dedicated tax & permit assistant
Helped her connect with local architects and builders
Sarah’s retreat is now under construction and pre-booked for its opening season.
Why Sumba Sunset Cliff Is the Right Place for Foreign-Owned Business
Most of the land on Sumba is still raw and underdeveloped, but Sumba Sunset Cliff is already zoned for tourism, already supported by local government, and already has buyers from around the world setting up responsibly.
When you buy here:
You get legal support from day one
You join a community of eco-minded landowners
You tap into a blue-ocean opportunity, before the crowd arrives
Final Thoughts: PMA Is the Foundation for a Sustainable Future in Sumba
Whether you’re building an income-generating eco-stay or laying the groundwork for a long-term lifestyle investment, the PMA structure gives you ownership, protection, and freedom.
And at Sumba Sunset Cliff, we’ve done this before. We’ll do it for you.