Home Blog Relocating to Indonesia: A Guide for Taiwanese Business Business Licenses | Business Setup | Indonesia Relocating to Indonesia: A Guide for Taiwanese Business InCorp Editorial Team 16 December 2024 5 minutes reading time Table of Contents Why Should Foreign Companies Relocate to Indonesia What Types of Legal Entities Can Foreign Companies Set Up in Indonesia? What are the Requirements for Foreign Companies Relocating to Indonesia? Special Considerations for Taiwanese Companies What are the Processes for Foreign Companies' Relocation to Indonesia? Relocating to Indonesia with InCorp's Assistance Relocating to Indonesia presents an incredible opportunity for Taiwanese businesses seeking to tap into one of Southeast Asia’s fastest-growing economies. With its strategic location, abundant resources, and a population of over 270 million, Indonesia offers a dynamic market with potential. This guide will help Taiwanese entrepreneurs and companies navigate the essentials of entering the Indonesian market. Addressing legal structures, compliance, and local opportunities will ensure a smooth relocation to Indonesia. Why Should Foreign Companies Relocate to Indonesia Indonesia has become an increasingly attractive destination for foreign companies due to its dynamic economy, large market potential, and strategic advantages. Below are the key reasons businesses choose relocation to Indonesia for investment and growth: Strategic Alternative Businesses consider Indonesia a competitive alternative to China for retail, healthcare, and financial services. Rising labor costs in China and global trade disruptions have prompted companies to relocate foreign companies to Indonesia to leverage its young workforce, abundant resources, and growing middle class. Strong Free Trade and Tax Incentives Indonesia’s involvement in FTAs like AFTA and RCEP boosts trade by offering low tariffs. Double taxation agreements with countries like the US and Australia further enhance the business environment for those planning a business relocation. Competitive Tax Rates and Incentives Foreign investors benefit from tax holidays, reductions, and exemptions in Special Economic Zones (SEZs). These incentives make it easier for companies to move to Indonesia and establish operations in key sectors like manufacturing and R&D. Resilient Economy Indonesia’s economy grew by 5.31% in 2022, its highest in nine years. With strong domestic demand and an expanding middle class, it is a top choice for businesses seeking relocation to Indonesia to capitalize on long-term economic resilience. Large Workforce and Market Liberalization The government’s positive investment list enables 100% foreign ownership in many sectors, simplifying the relocation of foreign companies to Indonesia. Additionally, Indonesia’s large population drives consumer demand, making it an attractive market for expansion. Emerging Digital Economy Indonesia’s digital economy, expected to reach USD 124 billion by 2025, offers opportunities in e-commerce, fintech, and digital media. The government’s supportive regulations and a thriving startup ecosystem underline its growth potential. Fintech Opportunities Fintech is thriving and driven by peer-to-peer lending and e-payments. With a sizeable underbanked population, foreign fintech companies can innovate and grow in this high-demand market. Cloud Technology and Big Data Indonesia’s cloud market is among Asia-Pacific’s fastest-growing, with the adoption of big data analytics increasing. Improved digital infrastructure attracts global tech companies, creating innovation opportunities. READ MORE:China’s Investment Prospects in Indonesia’s Leading ExportsIndonesian Work Permit for Foreign Employees from China: A Simple GuideHong Kong Business Investments in Indonesia What Types of Legal Entities Can Foreign Companies Set Up in Indonesia? Choosing the proper legal structure is essential for foreign companies moving to Indonesia to ensure smooth operations and compliance. Key options include: PT PMA Key characteristics of a PT PMA, a limited liability company equivalent in Indonesia, include: It can be 100% foreign-owned in many sectors. Requires a minimum capital of IDR 10 billion Must have at least one resident director Branch Office Key characteristics of a branch office include: The parent company fully controls it. It is limited to specific business activities. The parent company assumes entire liability. Representative Office (KPPA) Key characteristics of a representative office include: It is suitable for market research and promotional activities. It cannot conduct commercial transactions. It typically has a limited duration of 3 years, with the possibility of renewal. What are the Requirements for Foreign Companies Relocating to Indonesia? After considering the specific legal entities for your business, it is crucial to understand the requirements for each entity type for relocating foreign companies to Indonesia effectively: Special Considerations for Taiwanese Companies The Coordinating Minister for Economic Affairs announced on November 1, 2024, that 15 Taiwanese companies plan to relocate to Indonesia but emphasized the need for key measures to maximize the economic impact. Those measures are: Simplify Land Acquisition: Encourage investment in industrial zones, where land and Environmental Impact Assessments (Amdal) are pre-approved. Ensure Green Energy Availability: Provide access to green energy sources, such as gas, hydro, or solar power, especially in West Java. Competitive Gas Supply: Perusahaan Gas Negara (PGN) should ensure prices stay competitive to address high gas prices. Access to Profitable Markets: To improve investor access to markets, trade agreements similar to the EU CEPA and CPTPP should be finalized. What are the Processes for Foreign Companies’ Relocation to Indonesia? Relocating to Indonesia for a foreign company involves ensuring compliance with local laws. Below is a brief explanation: Reserving and Approving the Company Name Choose a unique company name and reserve it with the Ministry of Law and Human Rights. It must comply with Indonesian regulations and be distinct from existing names. Preparing Required Documents After name approval, prepare and notarize the Deed of Establishment, including Articles of Association. Required documents include shareholder IDs, NPWP, proof of domicile, capital statement, and registration forms. Meeting Post-Establishment Requirements You can apply for a Business Identification Number (NIB), secure business licenses, and register for taxes and social security. Securing Visas and Work Permits You should apply for the following: RPTKA (Expatriate Placement Plan) approval from the Ministry of Manpower Obtaining IMTA (Work Permit) for foreign employees Applying for VITAS (Limited Stay Visa) and KITAS (Temporary Stay Permit) for foreign workers Guide to Doing Business in Jakarta Mailchimp Free eBook Indonesia Business Insight Newsletter Full NameEmail I have read InCorp's Privacy Policy and agree to InCorp using my information provided to contact me about related content, and services.*Subscribe Relocating to Indonesia with InCorp’s Assistance Are you planning to relocate your business to Indonesia? Navigating the country’s regulations and processes can be challenging, but that’s where we come in. Let InCorp take the complexity out of the process. We specialize in: Company Registration: Swift and hassle-free setup for your business in Indonesia. Business Licensing: Assistance in obtaining the necessary licenses to operate legally and efficiently. Our expert team will guide you through every step, from securing permits to ensuring compliance with local regulations. With InCorp, you can confidently establish and grow your business in Indonesia. 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 Can a PMA company keep non-Rupiah bookkeeping and use a language other than Indonesian? For tax purposes in Indonesia, companies must maintain their books in Rupiah, using the Indonesian language, and store them within the country. Exceptions for using USD and English in bookkeeping require prior notification to the authorities and any use of languages other than Indonesian needs approval from the Ministry of Finance. Can an individual or a business organization be a shareholder in a PMA company, and is there a minimum number required? A limited liability corporation is required by Indonesian company law to have two or more shareholders, who may be either a legal entity or an individual. The foreign investor must find a second shareholder to own shares in the PMA firm for investments that are 100% open, which could be an affiliated party. Is there limited responsibility for shareholders in a PMA company? In a PMA Company in Indonesia, shareholders typically have limited liability, meaning they’re not personally liable for agreements or losses beyond their shareholding, except in certain circumstances. Liability may extend if the company isn’t properly established or if shareholders exploit the company in bad faith, engage in unlawful acts, or deplete company assets to the detriment of creditors. What kind of license does a PMA company need to get? In Indonesia, the licensing system has been updated with the implementation of the Omnibus Law. Businesses are categorized into four risk levels based on the PMA company classification. Licensing requirements vary accordingly, with three main types: Business Identification Number (NIB) Low-risk businesses needing only an NIB Standard Certification Standard Certification is necessary for medium-low and medium-high-risk businesses Licenses/Permits High-risk businesses require licenses/permits Additionally, basic requirements, including business location, must be met. Many licensing processes are facilitated through the Online Single Submission (OSS) platform managed by the Investment Coordinating Board (BKPM). 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 Investing in Batam, The Emerging Business Hub of Indonesia Read more What You Need to Know About Taxation of Benefits in Kind Read more Top 5 Mistakes to Avoid When Forming a Business Partnership in Indonesia Read more