How to Register a Company in Jakarta and Other Cities Indonesia

Indonesia is a member of the G20, representing the world’s major economies. With a population of nearly 250 million people, Indonesia has the 4th largest population in the world. These favorable conditions make Indonesia a desirable market for investment worldwide.

With Jakarta as its center, government regulations in Indonesia could classify it as a very bureaucratic country. Foreign investment is regulated and monitored by a government institution called the BKPM (Badan Koordinasi Penanaman Modal or Indonesia Investment Coordinating Board.

All legal arrangements, including company registration, business licenses, and other licenses, are issued through the BKPM.

Foreigners intending to establish a business in Indonesia should be aware of a few points:

1. What type of legal entity do you need: A foreign direct investment company or a representative office?
2. What line of business will your legal entity will be engaged in? Is it open to foreign investment? If yes, what percentage of ownership is open to foreign participation?
3. What are the requirements for a regulatory framework, minimum capital, organizational structure, tax regulations, Indonesian staff, activity reports, etc.?

Registering Foreign Direct Investment Company (PT. PMA) in Indonesia

Foreign investors are only allowed to undertake a process of company registration in Jakarta or Indonesia as a Limited Liability Company – Foreign Direct Investment, which is called PT. PMA (Perseroan Terbatas – Penanaman Modal Asing).

First, verifying the business field on the Positive Investment List issued by the BKPM is vital to confirm that the sector is open to foreign investment, closed to foreign investment, or available with restrictions. 

The laws governing PT. PMA establishment is UU No. 25 / 2007 of Capital Investment and UU No. 40 / 2007 of Limited Liability Company. The characteristics of PT. PMA is as follows:

• Foreign ownership up to 100% (according to the business field)
• Minimum of two shareholders
• Minimum one director and one commissioner
• The minimum investment plan is US$1.2 million, with paid-up capital of 100%
• Requires a business license and other licenses according to specific business activities

The process of PT. PMA registration in Jakarta and Indonesia takes around 1.5 months. However, a PT. PMA enables the company to perform business activities in Indonesia.

PT PMA Registration in 2022

Since 2020, the process of registering a company in Jakarta and Indonesia has been quicker. It takes as fast as four weeks to get your PT PMA up and ready to run. The following table elaborates on the timeline of PT PMA registration in Indonesia:

Company Setup in Indonesia with Representative Office

For foreign investors interested in exploring business opportunities in the Indonesian market, a representative office might be an efficient way to begin.

To open a representative office in Jakarta or other cities, an existing parent company should be overseas to manage the representative office in Indonesia. Most representative offices focus on conducting market research activities, marketing, and promotion through selling or buying agents.

Some foreign investors prefer to set up a representative office first in Jakarta or other cities to grow the market in Indonesia before establishing a PT. PMA.

Advantages of a representative office:

• Can be owned 100% by foreign investors
• No minimum capital requirement
• No shareholder, director, or commissioner requirement
• Set up process is relatively easy and quick, requiring about 1.5 months

Disadvantages of a representative office:

• Limited role as supervisor, coordinator, and representative of the parent company in Indonesia
• Not allowed to conduct direct sales and generate revenue in Indonesia. Thus all financial transactions shall be accomplished through the parent company overseas.

How to establish a business in Indonesia?

Setting up a business in Jakarta and other cities in Indonesia must be done correctly and carefully. Considering the changing regulations and heavy bureaucracy in Indonesia, it is crucial to engage a professional partner who understands local laws and the culture of Indonesia.

InCorp Indonesia (an Ascentium Company) provides one-stop services for foreign companies and entrepreneurs from various industries to enter the Indonesian market.

We will assist you in setting up your business in Indonesia, supporting your daily operations and administration, and representing your company in Indonesia.

Contact Us

Please send your question related to company registration in Jakarta or other cities in Indonesia by filling in the form below. Our consulting team will quickly answer you via E-mail. In addition, you can visit our office to know more details about our services.