When To Establish A Local PT. Instead Of A PT. PMA Or Representative Office.
According to Indonesia’s Positive Investment List, there are several business fields that are closed-off to foreign ownership. The only alternative for foreign investors to operate within these business lines is to establish a Local PT.
The general required structure to establish a Local PT company are as follows:
- 2 shareholders
- 1 local director
- 1 commissioner
As the name explains – a Local PT. is a company set up for Indonesian citizens, with 100% local ownership. Foreign investors who are interested to set up a Local PT. Company can do so by setting up a Special Purpose Vehicle Company or purchasing a Shelf company. And the most crucial parts of this process includes…
- Appointing the right people as your Company Shareholder, Director, and Commissioner.
- Drafting the right Shareholder Agreement.
Careful considerations around these 2 remain the most important factors when you are safeguarding your investment and retaining control over your company.
Size Of Local PT. And Its Capital Investment
A Local PT Company can be divided into 3 sizes. Each size of Local PT. has a different range of Capital Investment required t0 start the company.
- Small Local PT: Capital Investment of IDR 50 Million to 500 Million
- Medium Local PT: Capital Investment IDR 500 Million to 10 Billion
- Large Local PT: Capital Investment of IDR 10 Billion and above
Can A Local PT. Hire Foreign Employees?
Yes, However, the hiring is done via the Special Purpose Vehicle Company and, the required company size is medium Find out how to get a business visa and work permit in Indonesia.
The Process Of Setting Up A Local PT. In Indonesia.
| No. | Procedure | Duration (working days) |
| 1. | Approval of company name at the Ministry of Law and Human Rights | 2 |
| 2. | Preparation of Association Article by Notary | 4 |
| 3. | Obtain Deed of Establishment at the Ministry of Law and Human Rights | 3 |
| 4. | Obtain Certificate of Domicile at the local government office | 15 |
| 5. | Obtain Tax payer registration number (NPWP) and VAT number at the tax office | 3 |
| 6. | Obtain Trading Business License (SIUP) | 10 |
| 7. | Obtain Company Registration Certificate (TDP) at the local government office | 10 |
If you are unsure what type of company setup is suitable for your business, feel free to contact us. Cekindo will assist you to establish your business from the start in Indonesia based on your needs. You can subscribe our newsletter to get the updated information regarding business in Indonesia, once a month.
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