Your company in Bali is no longer delivering the expected results, your plans have changed, or the business is no longer relevant. In this situation, many owners immediately consider liquidating their PT PMA. However, liquidation is far from the only way to exit a business, and in many cases it is the most expensive option.
An operating company has value in its own right. It can be sold together with its licences, registrations, operating history, and other assets that would simply disappear during liquidation.
Why liquidation takes so long
Closing a PT PMA is a full legal procedure involving several mandatory stages. The shareholders must adopt a resolution, appoint a liquidator, publish notices, give creditors time to submit claims, settle liabilities, close the tax number, deactivate registrations, and remove the company from the government register.
The most difficult stage is deregistration for tax purposes. Before this can happen, the tax authority checks the company for outstanding debts and violations, which often delays the process.
In practice, liquidation usually takes 8–12 months and often lasts up to two years. Throughout this period, the company continues to exist and must keep filing reports.
Selling the company instead of liquidating it
In most cases, a sale is completed by transferring the shares to a new owner. The business continues operating; only the shareholders change.
Once the transaction has been notarised and the changes registered, the new owner receives a ready-to-operate company with valid licences, an NIB, business activity codes (KBLI), a tax history, a bank account, and an established business track record. This ready-made asset is what the buyer pays for.
Completing the transaction itself usually takes around 6–8 weeks, excluding the time needed to find a buyer.
The key difference
With liquidation, the owner spends time and money to bring the company’s existence to an end. With a sale, the owner receives compensation for the business they have already built.
The main differences:
- Time frame: liquidation takes 8–12 months or longer, while a sale takes around 6–8 weeks.
- Financial outcome: a sale can recover part of the investment, while liquidation means that nearly all of the company’s value is lost.
- Bureaucracy: closure requires significantly more procedures, publications, and approvals.
It is important to understand that tax and legal checks are required in both cases. The only difference is that, in a sale, the buyer conducts them as part of due diligence, while in a liquidation, they are conducted by government authorities.
Why you cannot simply stop managing the company
Some owners simply cease operations and stop filing reports. This is one of the riskiest scenarios.
Even an inactive PT PMA must file tax and investment reports. Violations may result in fines, the revocation of licences and the NIB, problems with the company’s investment record, and, for foreign owners, risks to their KITAS.
This is why leaving the company as it is usually turns out to be the most expensive option.
Which option to choose
Liquidation makes sense if the company genuinely cannot be sold—for example, because of substantial debts or other serious problems.
In all other cases, it is more sensible to assess the possibility of a sale first. This allows you to exit the business much faster and recover part of your investment instead of losing the company’s entire value.
If you are unsure which option is right for you, start with a legal assessment of the company. This will show whether the business can be sold on favourable terms or whether liquidation really is the only solution in your situation.
The Legal Indonesia team can help assess the condition of your company, prepare it for sale, or carry out its liquidation in full compliance with Indonesian law. We support the entire process, from the initial analysis through to completion.
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