Your Step-by-Step Guide to Business Registration in Indonesia

Your Step-by-Step Guide to Business Registration in Indonesia

  • InCorp Editorial Team
  • 8 January 2024
  • 4 minutes reading time

Registering a business in Indonesia can be less complex if you are familiar with the local business registration regulations.

The process of registering a business in Indonesia can be done in three simple steps through an experienced consulting firm:

  • You will need to initially get the Akta Perusahan or Deed of Establishment.
  • Then, you will need to start acquiring your Nomor Pokok Wajib Pajak (NPWP) or tax ID
  • And finally, you will have to obtain your business registration number.

In Indonesia, the process of registering a company can take as fast as one month but it can also take as long as three months, depending on the location of your business registration and the completeness of your documents.

This summarised process is more or less the same for both local company (PT) and foreign company’s (PT PMA) business registration, with differences in their requirements.

In this article, we will guide you through the process and requirements in more detail.

Step-by-Step Guide to Business Registration in Indonesia

1. Get a Deed of Establishment

Think of a Company Name

In accordance with Indonesia Law, a legal company name in Indonesia must contain a minimum of three different words. This official name is only for the legal procedure but you are allowed to have different names for your products or brands.

Draft Articles of Association

After you have chosen a name for your company, a registered notary is required in order to write your company’s articles of association. These articles of association include the following details:

  • Name and location of your company
  • Capital amount details
  • Objective and business activity of your company
  • Company shares value and amount
  • Shareholder meetings’ locations and methods
  • BOD and BOC’s appointment, titles, amount of members, and discharge procedures
  • Procedures of company’s profit and dividends use and distribution

business registration indonesia guide

Submit the Deed of Establishment

You and your shareholders must sign the Deed of Establishment while a notary is present. A power of attorney is required as well if one or more of the shareholders are unable to do so.

Then, the notary will submit the Articles of Association. The Indonesian Ministry of Justice and Human Rights is authority to receive and approve the submission. The Ministry will then proceed with the Deed of Establishment issuance, indicating that your business is officially registered as a legal entity in Indonesia.

Your company’s Deed of Establishment and Article of Association are the two most important documents for you to apply for a business registration number and other related licenses.

2. Acquire a Company Tax Number

The next step after the Deed of Establishment issuance is the application for a company tax number at your local office in Indonesia. Your company tax number will be sent to you to your company’s address.

You will then receive a domicile letter after the receipt of your company tax ID, except in Jakarta. Domicile letters for new companies are no longer necessary in Jakarta with the new law passed in May 2019.

3. Obtain a Business Registration Number

With the newly implemented Online Single Submission (OSS) system in Indonesia, the process is made simple and you can acquire your business registration number and other relevant documents at the same time.

The following are the documents you get through OSS:

  • Business registry number
  • Import license
  • Customs identification number
  • Automatic registration at the Health and Social Security System

Understand the major changes of OSS newest version, version 1.1

How InCorp can Help Register Your Business in Indonesia

The process of business registration has been made much more convenient to encourage foreign investments in Indonesia. However, a proper understanding of the changing laws and market environment are still critical for the success of your business setup. A professional consultant will be of great help to help you navigate the ever-changing legislations as well.

Connect with InCorp, we have a team of experienced consultants ready to assist you. Start by filling in the form below. You are also welcome to drop by one of our offices available in Jakarta, Bali, Semarang, Batam, Surabaya, and more.

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

    A nominee arrangement is an arrangement that uses another person’s name as a subject. In Indonesia, it is prohibited. This restriction aims to prevent situations where a company is owned by one party but beneficially owned by another. According to the law, any nominee agreement between a local party and a foreign investor is deemed null and void.

    In Indonesia, employment arrangements are categorized into temporary employment agreements (PKWT) and permanent employment agreements (PKWTT). Temporary contracts are for short-term, seasonal, or experimental work, while permanent contracts are for continuous employment.

    The minimum number of shareholders to incorporate a PT is two

    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.

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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.