how to set up a pt company in indonesia

Setting Up A Local PT. Company: A Guide For Foreign Investors

  • InCorp Editorial Team
  • 29 February 2024
  • 2 minute reading time

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.

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. InCorp Indonesia 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. By doing so, you actively create a newsletter subscription that keeps you informed.

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Please send your question by filling in this form below. Our consulting team will quickly answer you via email. You can visit our office to know more details about our Company Registration service.

Pandu Biasramadhan

Senior 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.

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Frequent Asked Questions

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.

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.