Closing a villa PT PMA: liquidation, and why dormant is not an option

Villa companies get set up with care and abandoned without any. A PT PMA whose villa has been sold, or never got licensed, keeps its obligations until it is formally wound up — and Indonesian company law sets out exactly how that is done.

Seven words in a liquidation

The terms of the company law, UU No. 40 Tahun 2007.

Before closing, the ordinary annual cycle — report, meeting, audit where required — is set out on a PT PMA's year, and the two-shareholder rule that makes a sole owner personally liable on shareholders and directors.

Why a dormant company is not a closed one

Until it is liquidated, a PT PMA is still a large business with an NIB. It files LKPM every quarter, and two consecutive missed periods start the sanction ladder: three warnings, suspension with a fine, then revocation of the business license (Permeninves/BKPM 5/2025, Pasal 373-376). LKPM and the sanctions.

Revocation does not end the company. Under the company law, loss of the business license is a ground for dissolution that obliges the company to liquidate (Pasal 142(1)(f)). The owner who stopped filing ends up doing the same liquidation, later, with sanctions on the record.

The steps, in the law's order

1. Dissolution

The shareholders resolve to dissolve the company at a general meeting (Pasal 144); it can also end by expiry of its term, by court order, by bankruptcy, or by loss of its license (Pasal 142(1)). From then on it may do nothing except wind up its affairs, and every letter carries “dalam likuidasi” after its name (Pasal 142(2), 143(2)). If the meeting appoints no liquidator, the directors are the liquidator (Pasal 142(3)).

2. Announcement

Within 30 days the liquidator announces the dissolution in a newspaper and the State Gazette and notifies the minister. The announcement states the legal basis, the liquidator, and how and by when to claim; creditors have 60 days (Pasal 147). Until those notices are given, the dissolution does not bind third parties, and the liquidator is jointly liable for their losses (Pasal 148).

3. Settling the estate

The liquidator records the assets and debts, announces a distribution plan, pays creditors and distributes the rest to shareholders (Pasal 149(1)). Creditors have 60 days to object to the plan (Pasal 149(3)). If debts exceed assets, the liquidator must apply for bankruptcy unless all known creditors agree otherwise (Pasal 149(2)).

4. The end

Once the general meeting or court accepts the liquidator's account, the liquidator notifies the minister and announces the result within 30 days; the minister records the end of legal personality, removes the company from the register and announces it in the State Gazette (Pasal 152). The company keeps its legal personality until then (Pasal 143).

Tax on the way out

The villa itself

If the liquidator sells the villa, the seller's 2.5% and the buyer's BPHTB apply as to any sale. The taxes on a sale.

The payout

Repayment to shareholders above their paid-up capital is a dividend for income tax (elucidation of UU PPh Pasal 4(1)(g)); for a non-resident shareholder that is withheld at 20% unless a treaty lowers it. Dividend tax.

The tax number

The Director General of Taxes deletes a company's tax number when it is liquidated because its business stopped or merged (UU KUP Pasal 2(6), as amended by UU 7/2021).

Late creditors

For two years after the announcement, a creditor who did not claim can still go to court; if the remainder has already been paid out, shareholders must return it in proportion (Pasal 150(2)-(5)). A tax assessment is a debt like any other.

What this page does not cover

• OSS steps to revoke the NIB. Not read.
• The tax office's audit before deleting a tax number. Not read.
• Selling the company's shares instead. A different transaction.

Common questions