Home Blog Interested in Setting up a Local Company in Brebes? 5 Facts to Know Business Setup | Company Registration | Indonesia Interested in Setting up a Local Company in Brebes? 5 Facts to Know InCorp Editorial Team 25 September 2020 3 minutes reading time Table of Contents Why Set Up a Local PT 4 Interesting Facts about Local PT Establishment How Cekindo Can Help with Company Setup in Indonesia 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. Read Full Bio 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 Can an individual or a business organization be a shareholder in a PMA company, and is there a minimum number required? A limited liability corporation is required by Indonesian company law to have two or more shareholders, who may be either a legal entity or an individual. The foreign investor must find a second shareholder to own shares in the PMA firm for investments that are 100% open, which could be an affiliated party. Is having audited accounts mandatory? Audited financial statements are required for: Entities gathering funds from the public (e.g., banks, insurance companies) Entities issuing debt instruments Publicly listed companies State-owned enterprises Companies with assets and/or turnover exceeding IDR 50 billion Entities mandated by legislation What requirements are needed if my Indonesian company registers the product? Register the product with BPOM (National Agency of Food and Drugs) and MoH (Ministry of Health). The type of testing and document requirements depend on the type of product you want to register. Also, the time frame for registration could vary between 3 to 15 months. How to conduct a company registration in Indonesia for a foreigner? A foreign-owned company (PT PMA) in Indonesia is a popular choice among foreigners to set up a business. Foreign investors must check Indonesia’s Positive Investment List to see which businesses are open to foreign direct investment. Get in touch with us. 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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. More on Business Setup Understanding SWOT Analysis and Its Functions for Business Read more Indonesia in 2017: The Year in Numbers Read more The Cost of Renewable Energy, Will It Cost More to Save The World? Read more