Home Blog Why You Should Establish a Manufacturing Company in Surabaya Business Licenses | Company Registration | Indonesia Why You Should Establish a Manufacturing Company in Surabaya InCorp Editorial Team 9 July 2025 4 minutes reading time Table of Contents The Optimism of Manufacturing Industry Recovery Manufacturing Industry Climate in Surabaya How To Establish a Manufacturing Company The COVID-19 pandemic has had a massive effect on various industries. However, the manufacturing company, in particular, has suffered greatly as most businesses have had to halt operations due to the restrictions imposed. Business actors focused on altering their operations to the government regulations relating to COVID-19 precautions, which mirror the number of cases within the nation. The Chairperson of the Indonesian Chamber of Commerce, Arsjad Rasjid, revealed that the manufacturing industry, in particular, is even threatened with potentially reducing their employees. The requirement of closing down the work area if an employee is infected with the virus also makes it difficult for companies to operate regularly. The apparent slowdown of the industry can be quantitatively seen through the Manufacturing Purchasing Managers’ Index, which has significantly slowed down. This is not only experienced by Indonesian manufacturers but also in other developed and developing countries such as Malaysia, the Philippines, India, and the United States. The Indonesian Ministry of Finance is extra careful and anticipates any future risk such that it should not significantly hamper economic growth. Despite global demand steadily growing, the ongoing geopolitical conflict and restrictions suppress the flow of supplies and have dramatically impacted the timing of delivery. The circumstances caused the manufacturing sector to hold back on its production. The prices of raw materials have also pressured the growth of the manufacturing industry as a whole. The Optimism of Manufacturing Industry Recovery Planning The Realization The manufacturing industry has seen an upward trend. This can be especially seen through the realization of foreign investments in the manufacturing sector, which has totaled the approximate amount of USD 5.4 billion and has contributed 52.9% to the total FDI achievement. Agus Gumiwang Kartasasminta, the Indonesian Minister of Industries, has gone so far as to point out that the manufacturing industry has contributed the most to the realization of the FDI, solely in the first quarter of 2022. This achievement is primarily due to the implementation of downstream policies which to support the acceleration of various projects, including but not limited to the electric vehicle ecosystem and the battery factories. For the manufacturing industry to continue its recovery, there is a need for legal certainty such that businesses feel supported in the current business climate. The G20 presidency for Indonesia also is expected to open up opportunities for increasing investment cooperation, especially in manufacturing sectors. Various government representatives consistently point out that synergy and collaboration of multiple stakeholders are integral in attracting global investors and achieving the targets. Manufacturing Industry Climate in Surabaya The manufacturing industry, both within Indonesia and around the world, is transforming to accommodate the industrial revolution. This era emphasizes the collaboration between the manufacturing process and the digital world. The Minister of Industries set up a specific Research Center that focuses on enhancing the development of electronics and telematics industries as there are the primary industries that are selected as pioneers. Availability of Infrastructure and Investment Plan Building an industrial company goes hand in hand with building quality human resources and is the key to success. The efforts of the Indonesian government are seen through the signing of a Memorandum of Understanding on the Preparation and Distribution of Competent Manpower in the Kendal Industrial Estate. This MoU was signed by the Badan Pnegembangan Sumber Daya Manusia Industri (BPSDMI), the Government of Singapore, and the Kendal Regency Government. The Ministry of Industries has built a Furniture and Wood Processing Industry Polytechnic in the area to encourage industrial investment growth by providing competent local workers. The Singapore Minister of National Development, Desmond Lee, has also acknowledged the progress of roads and existing companies’ infrastructures. He believes this is an excellent attempt to attract more investment to Kendal. How To Establish a Manufacturing Company Establishing a manufacturing company in Indonesia could be equally exciting and daunting. InCorp Indonesia (an Ascentium Company) provides business licenses and company registration services to ease this otherwise stringent process. Read Full Bio Verified by Hotdo Nauli Senior Legal & Delivery Manager at InCorp Indonesia Hotdo heads the Legal and Delivery team at InCorp Indonesia, managing Product Registration, Legal Advisory, and Business Licensing. With over 8 years of experience, she focuses on compliance and integrity, ensuring all client operations align with Indonesian laws and regulatory standards, including contract reviews and sector-specific licenses. She is also a licensed advocate and a member of the Indonesian Advocates Association (PERADI). Frequently Asked Questions How is the process of liquidating a PMA company in Indonesia, and how long does it take? The procedures for (voluntarily) liquidation typically involve the following steps: Conduct a general shareholder meeting to approve the liquidation and the liquidator’s nomination Notify the Ministry of Law and Human Rights as well as the creditors of the liquidation and the distribution plan for the assets by newspaper notice All business licenses and tax numbers should be canceled or revoked; the tax office will conduct a tax audit to revoke the tax number Make sure creditors are paid and that any liquidation funds are distributed to shareholders (if any) Conduct a general meeting of shareholders to approve the liquidator’s discharge and acquittal Notify the Ministry of Law and Human Rights of the liquidation’s outcome. After receiving the notification, the Ministry of Law and Human Rights will deregister the company’s status as a legal entity and remove its name from the Company Registry Release the liquidation’s outcome in a newspaper Completing the liquidation process can take around two years. What if my product has been registered under a local distributor, and I decide to transfer the license to my company or another distributor? You can transfer the license if your local distributor agrees to change the product license holder. What responsibilities does a PMA company have in terms of non-tax compliance? In Indonesia, a PMA company is typically required to submit various reports to relevant authorities, such as: Annual financial report Investment realisation report Manpower and employee welfare report Expatriate utilisation report Company loan repot Foreign exchange and prudential principles report However, depending on the business activities and classification relevant authority may require additional reports from a PMA company. Can a foreigner become a director or commissioner of a company in Indonesia? Yes, in a foreign-owned (PT PMA) company, a foreigner can be a director or a commissioner 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 Licenses How To Invest and Do Business in Indonesia Read more 5 Most Important Things to Know before Importing from Bali to Australia Read more The Business Trend of Financial Technology in Indonesia Read more