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Indonesia Company Setup in Brebes: 5 PT Establishment Facts

Interested in Setting up a Local Company in Brebes? 5 Facts to Know

InCorp Editorial Team
  • 25 September 2020
  • 3 minute reading time

Table of Content

Located in Central Java, Indonesia, Brebes is expected to reach 7% growth in the following one or two years. With the rapid development of infrastructure and facilities in Brebes, this industrial estate has got investors excited and ready to set up a company.

There are two common types of legal entities for foreign investors to choose from when starting a business in Indonesia: a local company (PT) and a foreign limited owned company (PT PMA).

Why Set Up a Local PT

There are advantages and disadvantages to both PT and PT PMA. But a PT company can be more beneficial over a PT PMA: if a foreigner’s objective is to invest in a sector closed to foreign ownership and to enjoy a simpler setup process and faster market penetration in Indonesia.

4 Interesting Facts about Local PT Establishment

1. Only Indonesian Nationals can Own a Local PT 

A local PT requires 100% local ownership by an Indonesian citizen or corporate. In other words, the Indonesian government does not allow foreigners to have ownership of a PT company.

This restriction makes some of the sectors open to local PT companies only impossible for foreigners to take part in.

 

2. Simple and Easy PT Setup Process

Starting PT establishment takes about 30 to 45 working days. The process consists of the following steps:

  • The Indonesian Ministry of Law and Human Rights approves your company name.
  • The Notary prepares the Article of Association.
  • The Indonesian Ministry of Law and Human Rights issues the Deed of Establishment.
  • Get a certificate of domicile from the local authority
  • Apply for a taxpayer number and a value-added tax number at the tax office.
  • Obtain a trading license, SIUP.
  • Acquire certificate of company registration, TDP.

 

3. Lower Paid-up Capital for Foreigners with Local PT Companies

Unlike other types of legal entities, a local PT establishment allows foreigners to enjoy a much lower paid-up capital.

According to the latest changes laid out in  Job Creation Law, paid capital for Local PT in Indonesia based the company size as follows:

  • A micro-enterprise: less than IDR 1 billion
  • A small enterprise: IDR 1 – 5 billion
  • A medium enterprise: IDR 5-10 billion
  • A large enterprise: more than IDR 10 billion

 

4. You can Hire Foreign Staff with a Local PT

You can hire foreign employees when you have a medium or large PT company with more than IDR 10 billion paid-up capital. However, you will have to obtain related work permits or business visas to do so.

How Cekindo Can Help with Company Setup in Indonesia

Cekindo can handle your Indonesia company setup rapidly, compliantly, and efficiently. Our legal and business professionals can help you understand the requirements of different types of legal entities.

We will also explain the advantages and disadvantages of choosing a particular legal structure. This in-depth knowledge enables you to make an informed decision about the legal entity type that you should set up in Indonesia.

Aside from the company setup, Cekindo also provides a comprehensive range of business solutions including accounting outsourcing, recruitment and PEO services, flexible workspace solutions, and many more.

Our solutions make it possible for you to run your business within a defined budget with maximum flexibility. Contact our trusted team of experts today via the form below.


Verified by

Pandu Biasramadhan

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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Frequent 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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