Foreign Investment Rises: Why Now is the Best Time to Start a Business in Indonesia

Indonesia company incorporation is gaining momentum as the country’s financial market stabilizes. After six consecutive weeks of foreign capital outflow, the trend has finally reversed, a clear signal of renewed investor confidence and a promising future for foreign investment. 

According to CNBC Indonesia, between October 6 and 9, 2025, foreign investors injected IDR 6.43 trillion back into Indonesia’s markets, marking the first net inflow since mid‑August. 

This surge presents a valuable opportunity for global entrepreneurs and investors looking to expand into Indonesia’s growing economy. Still, many hesitate due to concerns about legal procedures, licensing, and immigration compliance. 

How Indonesia Became a Magnet for Foreign Capital 

Indonesia’s financial market is bouncing back. In early October 2025, foreign investors brought in IDR 6.43 trillion, ending six weeks of capital outflow. This is the first net inflow since August and a clear sign that global confidence in Indonesia is rising again. 

Key reasons behind this shift include: 

• Uncertainty in the US and global tensions push investors toward safer, growing markets. 
• Indonesia offers stability, strong growth prospects, and lower entry barriers. 
• More capital means stronger rupiah, steadier markets, and better support for new businesses. 

For anyone planning Indonesia company incorporation, this is the right time. Foreign money is flowing in, and innovative businesses are following. 

Why Now is the Ideal Time for Indonesia Company Incorporation 

With foreign capital returning and regulations becoming more investor-friendly, now is one of the best times to incorporate a company in Indonesia, with long-term growth potential ahead.  

Here’s why: 

• Rising Foreign Investment: Indonesia attracts more global capital, signaling stability and renewed business confidence. 
• Simplified Setup Process: The government has simplified business registration through the OSS (Online Single Submission) system. This comprehensive platform integrates business licensing and non-licensing services, reducing red tape and making the process more efficient. 
• Lower Capital Requirements: Many industries now allow foreign-owned companies (PT PMA) to start with a minimum paid-up capital of IDR 2.5 billion. 
• Stronger Currency & Market Stability: Foreign inflows help stabilize the rupiah and create a predictable environment for new businesses. 
• Early-Mover Advantage: Incorporating now means seizing the opportunity to enter the market before competition increases, giving you a strategic edge in Indonesia’s growing economy.

Legal Structures for Foreign-Owned Companies in Indonesia 

Before incorporating, it’s essential to choose the proper legal structure. Indonesia offers several business entity types for foreign investors, but the most common and strategic option is the PT PMA. 

PT PMA (Perseroan Terbatas Penanaman Modal Asing) 

This is the official legal entity for foreign ownership in Indonesia. Key features: 

• Allows up to 100% foreign ownership (depending on the business sector) 
• Requires a minimum paid-up capital of IDR 2.5 billion 
• Can hire foreign employees and apply for an Investor KITAS 
• Eligible to conduct commercial activities, issue invoices, and open local bank accounts 

Representative Office (KPPA or BUJKA) 

This non-commercial setup is used for market research, promotion, or sourcing. Key features: 

• Cannot generate revenue or issue invoices 
• No capital requirement 
• Can apply for a limited number of KITAS 
• Shorter setup time 

Local PT with Nominee Structure 

Some foreign businesses use local nominees to bypass ownership restrictions. 

• While it may seem faster, it carries high legal risks 
• Not recommended unless fully compliant and reviewed by legal counsel

READ MORE:

• How to Meet PT PMA Minimum Capital Requirements in Indonesia
• Everything You Need: Documents for Setting Up a PT PMA in Indonesia
• The Steps to Establishing a Private Limited Company in Indonesia

Step-by-Step Guide to Indonesia Company Incorporation 

Setting up a company in Indonesia involves three main phases. Here’s a streamlined guide to help you understand the whole process. 

Pre-Incorporation Planning 

• Conduct feasibility studies and market research. 
• Decide on your business lines (KBLI codes), ownership structure, and shareholders. 
• Choose a business location and determine the appropriate legal entity. 

Legal & Regulatory Setup 

• Reserve your company name. 
• Prepare and legalize the Deed of Incorporation with a local notary. 
• Submit for approval from BKPM and register via the OSS (Online Single Submission) system. 
• Complete tax registration, including NPWP and VAT obligations. 

Post-Incorporation Compliance 

• Handle reporting obligations, including license renewals and annual filings. 
• Ensure employment and labor compliance, including work permits and BPJS registration. 
• Maintain proper bookkeeping and be ready for financial audits as required.

Get Your Company Legally Set Up with InCorp 

With simplified regulations, accessible capital requirements, and increasing global confidence, now is the right time to incorporate your company in Indonesia. 

However, navigating legal structures, permits, and compliance alone can be time-consuming and risky. That’s where InCorp Indonesia (an Ascentium Company) comes in to simplify your journey in business incorporation. Our team provides tailored solutions that make the process smooth, efficient, and most importantly, secure, giving you the peace of mind you need for your investment in Indonesia.  

• Register your PT PMA and handle OSS licensing. 
• Secure your Investor KITAS and permits. 
• Manage your tax, HR, and compliance with reliable BPO support. 

Fill out the form below and take the first step toward seamless incorporation. 

Frequently Asked Questions