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Setting Up a Local PT Company: A Guide for Foreign Investors

PT is the most popular company type in Indonesia. In fact, this type is fully intended for Indonesian only. But under certain circumstances, foreign investors can also set up a PT. For Local PT Company, there are more options on how to get it – read more about Local nominee company or Shelf company. This article discusses how to set up a PT company in Indonesia for foreign investors.

Establishing a Local PT Company in Indonesia

Why do foreigners need to establish a local PT when there are PT PMA and Representative types?

According to the business activities, there are several business fields which are closed for foreign ownership. Check the updated negative investment list to see what the forbidden business fields for foreigners. The alternative solution is foreign investors can establish a local PT company to start a business in Indonesia.

The general minimum requirements to establish a local PT company are as follows:

  • 2 shareholders
  • 1 local director
  • 1 commissioner

This type of company only allows 100% Indonesian citizen ownership. Hence you will need Local Nominee for setting up a local PT. Local nominee company is a solution for foreign investors who want to expand the business in Indonesia but hampered by limited ownership for specific business areas.

So, they can get a local shareholder nominee to represent a partial ownership for a certain number. But in real condition, the foreign investors get full ownership. Cekindo can help provide a local shareholder nominee with a notarised nominee agreement, contact us for details.

Size of Local PT Company

To set up a local PT company you have to invest some amount of money. The range is from IDR 50,000,000 up to more than IDR 10,000,000,000. Based on the amount of paid-in capital, a local company can be divided into 3 sizes:

  • Small : above IDR 50,000,000 – 500,000,000
  • Medium : above IDR 500,000,000 – 10,000,000,000
  • Large : above IDR 10,000,000,000

Can a Local PT Hire a Foreign Employee?

Yes, it can. For the local nominee company (foreign ownership) the required company size is medium at least, with paid-in capital above IDR 1,100,000,000. Find out how to get a business visa and work permit in Indonesia.

How to Set Up a PT Company in Indonesia: The Process

Establishing a local PT company will take about 47 working days. You can check the detailed process below:

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 not sure what type of company which 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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