business overview

Business Set Up Indonesia: Overview

InCorp Editorial Team
  • 11 November 2016
  • 3 minute reading time

Table of Content

 Indonesia Company Registration

When you are planning to expand your business to Indonesia, you might need a clear overview to guide you on running the business in this country. You can see the summary of our services in the table below to help you find which solution might fit the best for your business.

Services Duration Local Company (PT) Foreign-Owned Company (PMA) Representative Office
BUSINESS SET UP
Company Registration  1-1.5 Month 1-1.5 Month 1-1.5 Month
Trademark 24 – 34 Months 24 – 34 Months –
Closing Company 8 – 12 Months 8-12 Months 3 Months
Business & Import Licenses  1 Month 1 Month N/A
Product Registration Depends on Product Type Depends on Product Type N/A
Market Research & Analysis  Depends on Scope of Work  Depends on Scope of Work Depends on Scope of Work
Local Partner Selection 2 Months 2 Months 2 Months
Trade Mission  1-2 Months 1-2 Months 1-2 Months
BUSINESS PROCESS OUTSOURCING
Recruitment & HR Establishment 1 Month 1 Month 1 Month
Payroll Processing Monthly and Minimum 1 Year Monthly and Minimum 1 Year Monthly and Minimum 1 Year
Accounting & Tax Reporting  Monthly/Annual Monthly/Annual Monthly/Annual
Audit & Review  Depends on Scope of Work Depends on Scope of Work Review Once a Year
Business Visa & Work Permit  7 Working Days (Business); 2,5 months (work permit) 7 Working days (business); 2,5 months (work permit)  7 Working days (business); 2,5 months (work permit)
Retirement & Other Visa in Indonesia  2 Months 2 Months 2 Months
LOCAL PRESENTATION    
Project Management & Coordination   Depends on Scope of Work Depends on Scope of Work Depends on Scope of Work
Local Distributor & Partner  2 Months 2 Months 2 Months
Buying Agent 1 Month 1 Month 1 Month
Virtual & Serviced Office  1 Day 1 Day 1 Day
Mystery Shopping 6 Weeks 6 Weeks 6 Weeks

 

 More details and Important Questions for Business Overview

Summary of Service Local Company (PT) Foreign-Owned Company (PMA) Representative Office
Is it legal for tax exemption if properly structured?  Yes Yes Yes
Do you need a local Indonesian citizen as a sponsor?  Yes Depends on NIL (Negative Investment List) No
Must appoint an Indonesian resident as bank signatory?  Yes No No
Security deposit to be kept with the government?  No No No
Client must travel to Indonesia? No No N0
COMPANY REGISTRATION
Resident director / manager required?   Yes Yes Yes
Resident shareholder / partners required?  Yes Depends on NIL (Negative Investment List)  No
Government foreign investor approval required?   No No No
Shelf companies available?   Yes Yes No
Can have preference shareholders?   Yes Yes No
ACCOUNTING AND TAX CONSIDERATIONS
Statutory coporation tax payable?   Yes Yes Yes
Must file annual Indonesia tax return?   Yes Yes Yes
Must file annual financial statements?  No No No
Must appoint an auditor?  No No No
Access to double taxation treaties? 
BUSINESS CONSIDERATION
Can invoice local customers in your company name?   Yes Yes Yes
Can hire local staff in your company name? 
Can rent local office space in your company name? No No No
Residence visa for business owner? Yes Yes Yes
Good entity for trademark registration? Yes Yes  Yes

Overall Cekindo’s services enable customers and partners to reduce the problem and giving the solution and optimize solution performance based on customers’ unique business needs.

Contact Us

Please send your question by filling in the form below. Our consulting team will quickly answer you via E-mail. You can visit our office to know more details about our services.


Read Full Bio

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

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Disclaimer: The information is provided by PT. 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.

Frequently Asked Questions

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.

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