Company Registration in Indonesia for Foreigners

How to Register a Company in Jakarta and Other Cities Indonesia

  • InCorp Editorial Team
  • 19 March 2014
  • 4 minute reading time

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:

No. Procedure Duration

(working days)

1 Approval of company name at the Ministry of Law and Human Rights 1
2 Preparation of Article of Association by Notary 3
3 Approval of Deed of Establishment at the Ministry of Law and Human Rights 3
4 Obtaining Taxpayer Registration Number 2
5 Obtaining a Certificate of Domicile from the local district office (except for Jakarta) 10
6 Approval of Business Registration Number (NIB), Business Permit, Commercial/Operational Permit, Location Permit, Environmental Permit, and BPJS through the Indonesian Online Single Submission (OSS) System 2

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 (formerly Cekindo) 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.

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.

Get in touch with us.

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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.

Frequent Asked Questions

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.

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.