Posted 28.05. 2014 by Nurmia Agustina / Last update on 29.11. 2018
Continuing deregulation and reduction in bureaucracy is creating a wider range of investment activities for foreign investors. In addition, Indonesia is rich natural resources, large human resource pool and strategic geographical position offer further investment incentives. Recent legal initiatives that allow for more streamlined investment procedures are evidence of Indonesian policy objectives to address some investor concerns. Further progressive measures taken to attract foreign investment include tax concessions, regional incentives, industry incentives and free trade areas.
Below are the types of business entities in Indonesia:
A State -owned Company is a business entity whose capital is wholly or partly owned by the government. There are two types of BUMN in Indonesia right now, namely Perum and Persero;
a. Public Company (Perum-Perusahaan Umum)
A Perum is not oriented toward public service but toward profit. Employee status is civil servants. Several Perums were still losing money, so the government was forced to sell some shares to the public (go public) and change its status to Company Limited.
The characteristics of public companies (Perum) are, among others:
An examples of a company that is a business entity liability company is Perum Damri
b. Liability Company (Persero)
A Liability Company is one that has all of its capital in the form of stock. The company is managed by a professional team. Typically, these companies put shares into the stock exchange to be traded. The main purpose of a Persero is to gain profit and to provide services to the public. Founding capital is derived partly or wholly from state assets that are separated in the form of shares. (Here you can read about how to establish liability company in Indonesia)
Here are the traits of a Liability Company (Persero):
Examples of companies that are liability companies include: PT Garuda Indonesia ( Persero ), PT Angkasa Pura ( Persero )
A Private Owned Company is established and financed by a person or group of people. There are three forms of BUMS, namely Firma (Fa), Commanditaire Vennootschap or CV, and company limited (PT).
a. Firma (Fa)
The firm is a business entity established by two or more persons. Each of the members is solely responsible for the company’s obligations. The establishment of a firm is done by executing an agreement deed before a notary. The agreement shall contain the name of the founder of the firm, the profit distribution, as well as the terms for the beginning and the termination of the agreement.
Firm characteristics include:
The benefits of a firm are:
Disadvantages of a firm are:
b. Commanditaire Vennotschap – CV
The CV is an enterprise that is established by two or more persons as partners, either active partners or silent partners. Active partners are those that provide capital as well as run the business, while silent partners are those who provide venture capital. Active partners have full responsibility for all the company assets and liabilities, and silent partners are responsible only for the capital paid. The procedure for establishing a CV is the same as establishing a firm.
The characteristics of a CV include:
The advantages of a CV are:
The disadvantages of a CV are:
c. Company Limited (PT)
A PT is a business entity whose capital is divided into stocks (shares). The responsibility for liabilities/debt for the company is limited to the owners of holdings. There are two types of limited companies, namely a closed PT and an open PT. A closed PT is one whose shareholders are limited, for example among families. An open PT (often called PT going public) is a PT whose common shares are sold to the public.
The characteristics of a limited company (PT):
The advantages of a PT include:
The disadvantages of a PT include:
(Here you can read more about how to establish a Liability company in Indonesia)
Feel free to contact us for a free quotation in company formation in Indonesia.