Home Blog Why Choose Bandung to Start a Business in Indonesia? Business Setup | Company Registration Why Choose Bandung to Start a Business in Indonesia? InCorp Editorial Team 19 November 2018 3 minutes reading time Table of Contents Top-Notch Creative Industries Startup Communities and Ecosystem Tourism and Hospitality Boosts Startup Scene Company Registration in Bandung Over the past several years, Bandung has transformed itself from a relatively unpopular and less disturbed place into one of the most attractive cities in Indonesia boasting of entrepreneurs and startups. This capital city of West Java province is the centre for startups, and it is also known as one of the most creative cities in Indonesia. Bandung is distinguished as an alluring destination offering foreign investments, technologically advanced measures and innovative expansions. With a lot of advantages and internationality in this city come opportunities that are one-of-a-kind converging in one place. Let’s take a look at why Bandung, a city of 2.4 million people, is the ideal place to start your next big venture. Top-Notch Creative Industries Way before startups sprouting out in this city brimming with opportunities, Bandung was already well-known for its innovative and creative fashion industry and has been appointed by UNESCO as part of its Creative Cities Network. Known as Indonesia’s Silicon Valley, Bandung is also one of the active members in ‘1000 Digital Startup National Movement’. These are the factors that form the very foundation of Bandung’s innovative and creative scenes, providing tenacious founders and entrepreneurs new perspectives. The strong presence of creative startups is supported by the population base from all walks of life including young people and technologically-savvy individuals. In addition to that, the local government and authorities are equally supportive of the growth with a lot of Bandung’s universities offering courses in IT (Information Technology). Prominent creative and IT communities include the game developer community GamedevBDG the game developer, FOWAB (Forum Web Anak Bandung), among many others. Startup Communities and Ecosystem There are the friendly ecosystem and numerous helpful communities in Bandung that have driven the city’s rise of startups — many companies and entrepreneurs regard the city as a comfortable starting ground for their ventures. Communities that provide venues for the incubation of new startups–for both coaching and funding–include Startup Corner, Kolaborasi, Bandung Digital Valley, Startup Banding, and Indigo Creative Nation. Other than funding and coaching, some communities even equipped with co-working space, virtual offices, cafeteria, sports facility, free internet access, 3D printing facilities, patent and legal issues assistance. Tourism and Hospitality Boosts Startup Scene The rapid growth in economy and infrastructure, as well as its spectacular nature, have made Bandung become one of the most alluring tourist destinations. As the third largest populated city in West Java, Bandung offers vibrant, distinctive hospitality and tourism opportunities that promote foreign investments as well as the startup scene. Thanks to its higher elevation compared to other regions in Indonesia, Bandung offers a cooler climate that is favoured by most foreigners and global travellers. All of them seem to enjoy the famous Bandung tours to tea plantation or a sulfur lake. Besides, the striking Dutch colonial architecture, a wide range of delicacies, tonnes of fashion boutiques, and a new wave of hotels and villas, set to reinvent Bandung’s hospitality and tourism sector — transforming tourism experience with innovative solutions. Company Registration in Bandung Legal company registration is the first great weapon for you to join the booming startup ecosystem in Bandung. As discussed in most of our articles, setting up a business in Indonesia can be complex if you are not familiar with the corporate law in the country. It is highly recommended to obtain local legal guidance about all registration formalities. For specific consultation for your business, please get in touch with Cekindo. Read Full Bio Verified by Ales Cina Consulting Manager at InCorp Indonesia Aleš manages solution delivery at InCorp Indonesia, optimizing incorporation processes and client relationships. His experience in internal auditing, retail, and sales offers valuable global insights. Aleš, with a degree in Economics and Finance from the Czech Republic, helps clients navigate cross-border business challenges, focusing on cultural and legal insights. Frequently Asked Questions How much is the minimum fund required to establish a PT PMA business in Indonesia? The investment requirement for PMA companies in Indonesia varies based on their classification under the Indonesia Industrial Standard Classification (KBLI). Generally, a minimum investment of IDR 10,000,000,000 (ten billion Indonesian Rupiah), excluding investment in land and buildings, is needed to conduct one business activity in one location. Are there investment facilities provided for foreign investors in Indonesia? A newly established PMA company in Indonesia is typically provided with import facilities, tax holidays, tax allowances, or investment allowances. Import facilities Investors in Indonesia, particularly in manufacturing, may benefit from import tax exemptions for capital goods and raw materials through the Master List Facility. The imported goods must meet specific criteria, such as not being produced locally or not meeting industry demand despite local production. Tax holiday The government offers CIT reductions of 50% or 100% for 5–20 years for listed pioneer industries, based on investment value. After this period, a CIT reduction of 25% or 50% applies for two fiscal years. Non-listed sectors can also apply by meeting criteria demonstrating pioneer industry status. Pioneer industries are industries that have a wide range of connections, provide additional value and high externalities, introduce new technologies, and have strategic value for the national economy. Tax allowance For companies in certain designated areas or regions, the government may provide the following tax concessions: Net income reduction up to 30% of the amount invested, prorated at 5% annually for six years, on condition that the assets invested are retained for the same duration. Accelerated depreciation and/or amortisation deductions An extension of tax losses carried forward for a maximum of ten years A 10% (or lower if treaty relief is available) withholding tax rate on dividends paid to non-residents The applicant eligible has to meet high-level-criteria for the above tax facilities: High investment value or for export purposes High manpower absorption High level of local content Investment allowance The government offers a reduction in net income of up to 60% of the investment, distributed at 5% annually over six years of commercial production, contingent upon the retention of invested assets for the same duration. To qualify, applicants must meet business line eligibility criteria and employ a minimum of 300 Indonesian workers in the project. Super deduction This facility could be granted to certain businesses, such as: 60% reduction in net income of the amount of tangible fixed assets invested for labor-intensive industries, distributed throughout a certain time frame. Up to 200% reduction in the gross income of the amount spent for human resources development in certain competency activities. Up to 300% reduction in gross income of the amount spent for certain R&D activities in Indonesia. What kind of license does a PMA company need to get? In Indonesia, the licensing system has been updated with the implementation of the Omnibus Law. Businesses are categorized into four risk levels based on the PMA company classification. Licensing requirements vary accordingly, with three main types: Business Identification Number (NIB) Low-risk businesses needing only an NIB Standard Certification Standard Certification is necessary for medium-low and medium-high-risk businesses Licenses/Permits High-risk businesses require licenses/permits Additionally, basic requirements, including business location, must be met. Many licensing processes are facilitated through the Online Single Submission (OSS) platform managed by the Investment Coordinating Board (BKPM). What is the difference between PT and CV? You can find the difference below: PT: limited liability company (shareholders are not legally liable for company liabilities) CV: a proprietary company where liability falls on the shareholders Get in touch with us. 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Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website. More on Business Setup Why Indonesia is the Next Big Market for Canadian Business Read more Business Set Up Indonesia: Overview Read more Limited Liability Company: A Complete Guide to Indonesian Market Read more