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 minutes reading time

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

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.

    The investment requirement for PMA companies in Indonesia varies based on their classification under the Indonesia Industrial Standard Classification (KBLI). Generally, a minimum investment of IDR 10,000,000,000 (ten billion Indonesian Rupiah), excluding investment in land and buildings, is needed to conduct one business activity in one location.

    In Indonesia, the licensing system has been updated with the implementation of the Omnibus Law. Businesses are categorized into four risk levels based on the PMA company classification. Licensing requirements vary accordingly, with three main types:

    • Business Identification Number (NIB)
    • Low-risk businesses needing only an NIB

    • Standard Certification
    • Standard Certification is necessary for medium-low and medium-high-risk businesses
    • Licenses/Permits

    High-risk businesses require licenses/permits
    Additionally, basic requirements, including business location, must be met. Many licensing processes are facilitated through the Online Single Submission (OSS) platform managed by the Investment Coordinating Board (BKPM).

    Dividends can be distributed from company net profits after allocating reserves, depending on a positive profit balance. Approval from the general meeting of shareholders is necessary. Interim dividends may be distributed if specific requirements are met.

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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.