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Top 5 Mistakes You Need to Avoid When Going Through Company Set Up in Indonesia

Running a business means treading the wrong paths. In some cases, that’s fine – that’s how you learn and become a more effective leader. However, a lot of them are not only costly but also ruin your business and personal reputation. They can even land you in hot legal water. When you’re going through a company set up in Indonesia, make sure you step away from these five common and outrageously dangerous mistakes.

Company Set Up in Indonesia in Indonesia: 5 Most Common Mistakes

1. Ill-Structured Special Purpose Vehicle Company

setting up a company in Indonesia - CekindoAlthough Indonesia is opening itself to more foreign investments, a number of its business lines remain closed-off to 100% foreign ownership.

Foreign Investors or companies interested in these businesses will require a Special Purpose Vehicle company set up, to operate in Indonesia. Investors who don’t perform due diligence, or go through more formal channels to find a trusted service provider to assist with their setup and shareholder agreements, could find themselves (unnecessarily) losing total control of their company and investments.

As a season market-entry consultancy, Cekindo is here to help you set up your company in Indonesia. If you don’t want to be a foreign direct investment firm, we can also help you select a local partner for distribution.

2. No Business Office

setting up a company in Indonesia - Cekindo

One of the main requirements in company registration is a domicile letter, and the law says you cannot set up an office in a residence. In other words, you need to have a legitimate corporate office.

Although the cost of office rent in Indonesia is lower than in some Asian countries such as Singapore and Hong Kong, it may still be impractical to certain businesses, such as startups or small teams.

Cekindo offers various office setups for your business from virtual office to shared office space. Our packages are reasonably priced and flexible to accommodate your present needs and budget. Regardless of which one you choose, we will provide you with a domicile letter. Furthermore, one of our specialists will provide you with a FREE business consultation particularly on registering a company in Indonesia. Check the top 8 FAQs on Virtual Offices in Indonesia.

3. Failure to Hire a Local Worker

While Indonesia doesn’t restrict you from hiring foreign workers, it has set conditions. In an effort to provide more jobs for its local citizens, the country imposes foreign companies to hire one Indonesian for every foreign worker hired. You will also need to pay certain fees and make sure expatriates have the correct visa and work permit.

4. Very Short Lead Time

setting up a company in Indonesia - Cekindo

Indonesia is improving in terms of Ease of Doing Business, but that doesn’t mean red tape and bureaucracy are over. It can take as long as 10 weeks to process your company registration, and you need even more time for market analysis, selection of industry and business category, etc.

Cekindo has a wide variety of business services, and we can support you by setting up a company to fill in outsourcing of business functions. You can also look into buying a shelf company from us.

5. Very Small Capital

The minimum capital for foreign companies (PT PMA) is IDR 10 billion, with a minimum of also IDR 10 billion in paid-up capital.  It’s separate from all the other expenses you will incur while setting up and running your business at least within the next 6 months to a year.

Company Set Up in Indonesia with Cekindo

Indonesia has a fast-growing economy foreign investors can maximize. But first, you need to learn to follow the rules first and avoid committing errors that will force you to fold.

With a team of experienced business incorporation specialists with the right knowledge and skills, Cekindo can provide professional guidance and assistance in setting up a company in Indonesia.

Contact us now for a free consultation via the form below.

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