Set Up A Local PT Company in Indonesia
PT is the most popular company type in Indonesia. In fact this type is fully intended for Indonesian only, but for certain situation it can be setting up for the foreign investors. There are 3 company types that foreign investors can choose when they decide to expand their business to Indonesia: PT PMA, Representative Office, and Local PT Company. For Local PT Company there is more options how to get it – read more about Local nominee company or Shelf company.
Why foreigners need to establish a local PT company in Indonesia where there are PT PMA and Representative types available?
According to the business activities, there are several business fields which are closed for foreign ownership (check the updated negative investment list to see what are the forbidden business fields for foreigners). Thus the alternative solution is foreign investors can establish a local PT company to start a business in Indonesia.
The general minimum requirement to establish a local PT company are as follows:
- 2 shareholders
- 1 local Director
- 1 Commissioner
This type of company only allowed 100% Indonesian citizen ownership, hence you will need Local Nominee for setting up this local PT company. Local nominee company is a solution for foreign investors who want to expand the business in Indonesia but hampered by limited ownership for specific business areas. So they can get a local shareholder nominee to represent a partial ownership for certain number, but in real condition the foreign investors get a full ownership. Cekindo can help you to provide a local shareholder nominee with notarized nominee agreement, contact us for details.
Size of Local PT Company
To set up a local PT company you have to invest some amount of money, the range is from IDR 50,000,000 up to more than IDR 10,000,000,000. Based on the amount of paid-in capital, local PT company divided into 3 sizes:
- Small : above IDR 50,000,000 – 500,000,000
- Medium : above IDR 500,000,000 – 10,000,000,000
- Large : above IDR 10,000,000,000
Can a local PT company hire a foreign employee?
Yes it can. For the local nominee company (foreign ownership) the required company size is medium at least, with paid-in capital above IDR 1,100,000,000. Find out how to get business visa and work permit in Indonesia.
The Process of Setting Up a Local PT in Indonesia
Establishing a local PT company will take about 47 working days. You can check the detail process below:
Obtain Deed of Establishment at the Ministry of Law and Human Rights3Obtain Certificate of Domicile at the local government office15Obtain Tax payer registration number (NPWP) and VAT number at the tax office (Check out tax reporting deadlines, warnings, and recommendations in Indonesia)
||Duration (working days)
||Approval of company name at the Ministry of Law and Human Rights
||Preparation of Association Article by Notary
||Obtain Deed of Establishment at the Ministry of Law and Human Rights
||Obtain Certificate of Domicile at the local government office
||Obtain Tax payer registration number (NPWP) and VAT number at the tax office (Check out tax reporting deadlines, warnings, and recommendations in Indonesia)
||Obtain Trading Business License (SIUP)
||Obtain Company Registration Certificate (TDP) at the local government
If you are not sure what type of company which is suitable for your business, feel free to contact us. Cekindo will assist you to establish your business from the start in Indonesia based on your customized needs. You can subscribe our newsletter to get the updated information regarding business in Indonesia, once a month.
Feel free to contact us for a free quotation on how to register a foreign company in Indonesia.
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