indian companies in indonesia

Business in Indonesia for Indians: Options for Visas and Legal Entities

  • InCorp Editorial Team
  • 9 September 2019
  • 5 minute reading time

When it comes to doing business in Indonesia, many regard Indonesia as a land full of potential, rich culture, diverse resources, and abundant workforce with a wide array of opportunities – thus opening Indian companies in Indonesia. There are some great options for business in Indonesia for Indians.

The attractive characteristics have sparks many investors’ interest. Corporate giants have continuously flocked to grab their market share, including from India. More and more Indian companies in Indonesia, are expected to grow in numbers.

According to Randstand Workomonitor, Indians between 25 and 34 years old prefer to start a business on their own. The survey also stated that 56% of the respondents have a strong will to start their own venture. With Indians’ great intention to become entrepreneurs, Indonesia has become a favored investment destination.

Before jumping right into the Indonesian market, know your options. Make sure your entrepreneurial journey is a smooth one. Do not waste away your time and money.

This article is going to discuss essentials you should know as an Indian who is interested in doing business in Indonesia.

Sectors with Active Participation by Indian Companies

Traditionally, the majority of Indian businesses in Indonesia are still in trade, wood products, textiles, and manufacturing.

But now, more and more Indians are interested in investing in certain industries such as the health industry and infrastructure industry. This sector has seen very positive investments from India to Indonesia with significant growth every year.

Indian investors are more tempted to participate in the infrastructure industry. India has the same challenges and opportunities in the market. As two of the world’s largest emerging economies, both countries are encountering the infrastructure gap.

The Indian ambassador also mentioned in Jakarta’s second India-Indonesia Infrastructure Forum (IIIF) that urban railways, roadwork, airports, oil and gas, and the health industry are their main focus. These sectors allow Indian companies to become beneficiaries through Special Purpose Vehicle arrangements.

Furthermore, waste management through technologies, information technology, are also fields that Indian investors are highly interested in.

indians doing business in indonesia

Visa Requirements for Indians to Enter Indonesia

It has become less complicated for Indians to enter Indonesia. The government has implemented many friendly policies.

However, the basic rules still apply. You must have an Indian passport of at least 6-month validity and blank pages on your passport for visa stamp. You will be denied entry if you do not comply.

Free Visa for Indian Nationals

You will get a free visa that lasts for 30 days to survey the Indonesian market, as long as you do not engage in any business activities that generate income. This free visa cannot be extended and it is a single-entry visa.

A visa run is not recommended if you are planning to stay for more than 30 days. You will risk being denied into Indonesia if you do it too often.

Visas for Short-term and Long-Term Visits

If you plan to stay for more than 30 days but fewer than 60 days, here are your options:

Social and Cultural Visa
This is valid for 60 days and you need a sponsorship letter.

Visa on Arrival (VoA)
A VoA is only valid for 30 days and you can extend this visa once. You can purchase it at the airport directly. Do remember to keep your receipt, you will need it for an extension.

Business Visa
This is probably the best option for most Indian investors to stay for a longer period. It is valid for 60 days (extendable). It is also available in single-entry or multiple-entry.

To quicken the process of your Indonesia business visa application, you can apply online.

Foreign companies (PT PMA), local companies (PT), and representative offices are the most common forms of entities that Indians start in Indonesia.

Foreign Limited Liability Company (PT PMA)

Also known as a foreign limited liability company, PT PMA’s can be owned by Indians. The foreign ownership is subject to the Negative Investment List (NIL). It depends on the type of sector you’re involved in.

Local Limited Liability Company (PT)

Only Indonesian nationals can fully own this entity type. It is only possible for Indians through the Special Purpose Vehicle arrangement with an Indonesian partner.

Representative Office

This is a good option to test the water in Indonesia before you set up your company. It can act as a branch of your parent company abroad. Do take note that it cannot conduct business activities that generate profits or revenues of any kind.

Doing Business in Indonesia with Cekindo

Not sure which legal entity option suits your business needs best? Discuss your market-entry plan with us. Our team of consultants and legal experts will be happy to provide you with the advice and consultation you need. We have assisted a lot of Indians who are interested in doing business in Indonesia.

Get in touch by filling in the form below. Or, visit our offices in Jakarta, Bali, and Semarang.

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.

Get in touch with us.

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Disclaimer: The information is provided by PT. 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.

Frequent Asked Questions

The sponsor must be a company for single and multiple-entry businesses and working visas. The sponsor company is the legal entity that invites you to a business meeting or the business you will be working for. Regarding social-cultural and retirement visas and KITAS & KITAP stay permits, the sponsor must either be an Indonesian legal entity or a citizen. If you need a visa sponsor, InCorp provides sponsorship via HR Outsourcing and manages payroll for your foreign employee.

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.

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.