Company Registration
Company Registration in Indonesia
Establishing a company is the first step in expanding your business into Indonesia. There are numerous options available to business owners, but the most common is a Foreign-Owned Company (PT PMA) or a Representative Office. Each has advantages, and one may better suit you based on your business expansion goals.
Types of Legal Entities for Foreign Investors in Indonesia
If you are a foreign investor who wants complete control over your business, forming a PT PMA is the best option. PT PMA is Indonesia’s only legal entity allowing 100% foreign ownership. However, each sector has regulations governing their permitted business activities and a maximum number of shares foreigners can own, which the Positive Investment List determines.
A representative office is ideal for foreign investors and business owners just starting in Indonesia. Foreign businesses can use ROs to test the Indonesian market before establishing commercial operations. ROs are also ideal for non-sales activities such as customer service, approaching potential clients, and conducting marketing and brand awareness campaigns.
KP3A is a representative office set up expressly for business trading. Both general and trading ROs are prohibited from engaging in financial-generating business activities. A trading RO, on the other hand, can be established in any part of Indonesia, whereas a general RO cannot.
Similar to KP3A’s, BUJKA is a representative office for foreign construction companies. A BUJKA may participate in large-scale construction projects, but only in collaboration with a local company, Local PT. Despite its limitations, BUJKA is still an excellent place to start for foreign construction companies looking to establish a presence in Indonesia, as it allows them to collaborate on building projects without needing a construction license (SIUJK).
The Process of Setting Up a Company in Indonesia
- Consultation
Discuss your expansion plans in Indonesia with our experts.
- Collecting Required Documents
Provide us with all the documents required for company establishment.
- Document Review
We ensure the documents you submit are compliant with the most recent regulations.
- Drafting
We will draft your application letter addressed to related government agencies.
- Documents Submission
We file all of your documents to the appropriate government agencies on your behalf.
- Registration of Indonesian Tax ID (NPWP)
An NPWP is required to obtain additional business licenses, open a bank account, and fulfill tax obligations.
- Obtain Indonesian Business Identification Number (NIB)
A NIB is required for a company to conduct primary business operations.
- Deed of Incorporation (For PT PMA)
Your Deed of Incorporation should be drafted and legalized by a Notary.
- Approval of Legal Entity (For PT PMA)
After the notary submits the Deed of Incorporation, the Ministry of Law and Human Rights will approve.
- Securing Other Licenses (For PT PMA)
Some sectors and business activities require more specific business licenses and permits. Depending on your business sector, this process can take 7 to 20 days.
*The estimated time after all the required documents are deemed eligible for submission to the related government’s bodiesAn NPWP is required to obtain additional business licenses, open a bank account, and fulfill tax obligations.
Comparisons of Company Establishment Options for Foreign Investors in Indonesia
- Nature
- Allows profit-generating business activities
- Allows up to 100% foreign ownership
- Ideal for business sectors that are open to foreign investment
- Structure
- Minimum two shareholders (corporate/individual)
- Minimum one local director
- Must have at least one commissioner (can be a foreigner with a valid work permit)
- Capitalization
- Minimum IDR 10 billion of investment
- At least IDR 10 billion should be provided as a paid-up capital
- Benefits
- Full control of business
- Eligible to sponsor work and stay permit for foreign employee
- Nature
- Not allowed to generate financial income
- Allows up to 100% foreign ownership
- Suitable for testing the waters before setting up a fully-fledged company
- Works best for non-sales activities
- Structure
- No shareholder or director required
- One chief executive is sufficient
- Capitalization
- No capital is required
- Benefits
- Low incorporation cost
- Eligible to sponsor work and stay permit for foreign employees
- Nature
- Not allowed to perform any sales and purchase activities
- Allows up to 100% foreign ownership
- Ideal for liaising, promotional, and market research
- Structure
- No shareholder or director required
- One chief executive is sufficient
- Capitalization
- No capital is required
- Benefits
- Low incorporation cost
- Eligible to sponsor work and stay permit for foreign employee
- Can establish a branch office in any region of Indonesia
- Nature
- Permitted to participate in large-scale construction projects in collaboration with a Local PT
- Ideal for larger global construction companies
- Structure
- No local shareholders are required
- Capitalization
- No capital is required
- Benefits
- Low incorporation cost
- Work on a construction project in collaboration with a Local PT without obtaining a construction license (SIUJK)
- Eligible to sponsor a foreign employee’s work and stay permit
