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Foreign-Owned Company (PT PMA)

Establishing a company is the first step to expanding your business operations into Indonesia. Register your business in Semarang and Central Java by choosing the type of company you would like to establish, the first option is a foreign-owned company or PT PMA.

If you are a foreign investor wanting complete control of your business, register your business in Semarang and Central Java as PT PMA. 100% foreign ownership is one of the benefits investors can have when running a business in Indonesia. However, there are several regulations regarding business activities to note and other legalities based on the Positive Investment List.

Set Up Your PT PMA Today

General Representative Office (KPPA)

For the early stages of expanding into Indonesia, a representative office poses as the proper solution. A general representative office is useful for doing research on the Indonesian market before establishing commercial business operations.

However, representative offices cannot conduct activities that generate financial advantage for the company.

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Representative Office for Business Trading (KP3A)

For a business trading company, KP3A is the representative office that can be established in Indonesia. Although it’s designed for business trading companies, the KP3A is prohibited from conducting business activities that generate financial income.

One of the merit differences is that KP3As allow having branches in other regions in Indonesia, while the general representative office is not allowed to do so.

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Representative Office for Construction Company (BUJKA)

As another specifically designed representative office, a BUJKA is made only for foreign construction companies. This type of office may engage in large-scale construction projects.

However, the activities will be accounted for as a joint operation with a local company known as a Local PT. The collaboration also allows foreign companies to do projects by obtaining a construction license (SIUJK).

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The Process of Setting Up a Company in Semarang

External

Registration of Indonesian Tax ID (NPWP)

An NPWP is required to secure other business licenses, open a bank account, and fulfilling tax obligations.

Obtain Indonesian Business Identification Number (NIB)

A NIB is required for a company to conduct immediate business operations.

Deed of Incorporation (For PT PMA)

A Notary should draft and legalized your Deed of Incorporation.

Approval of Legal Entity (For PT PMA)

After the notary submits the Deed of Incorporation, the Ministry of Law and Human Rights will approve.

Securing Other Licenses (For PT PMA)

Some sectors and business activities require more specific business licenses and permits. This process can from 7 to 20 days, depending on your business sector.

Internal

Consultation

Talk to our experts about your expansion objectives in Indonesia.

Collecting Required Documents

Provide us with all the documents required for company establishment.

Document Review

We ensure your submitted documents are aligned with the latest regulations.

Drafting

We will prepare your application letter addressed to related government bodies.

Documents Submission

We file all your documents to the related government bodies on your behalf.

*The estimated time after all the required documents are deemed eligible for submission to the related government’s bodies.

Comparisons of Company Establishment Options for Foreign Investors in Semarang

  • PT PMA

  • Nature
    • Allows profit-generating business activities
    • Allows up to 100% foreign ownership
    • Ideal for business sectors that are open for foreign investment
    Structure
    • Minimum two shareholders (corporate/individual)
    • Minimum one local director
    • Must have at least one commissioner (can be a foreigner with a valid work permit)
    Capitalisation
    • Minimum IDR 10 billion of investment
    • At least IDR 10 billion should be provided as a paid-up capital
    Benefits
    • Full control of business
    • Eligible to sponsor work and stay permit for foreign employee

  • KPPA

  • Nature
    • Not allowed to generate financial income
    • Allows up to 100% foreign ownership
    • Ideal for testing the waters before setting up a fully-fledged company
    • Works best for non-sales activities
    Structure
    • No shareholder or director required
    • One chief executive is sufficient
    Capitalisation
    • No capital is required
    Benefits
    • Low incorporation cost
    • Eligible to sponsor work and stay permit for foreign employees

  • KP3A

  • Nature
    • Not allowed to perform any sales and purchase activities
    • Allows up to 100% foreign ownership
    • Ideal for liaising, promotional, and market survey activities
    Structure
    • No shareholder or director required
    • One chief executive is sufficient
    Capitalisation
    • No capital is required
    Benefits
    • Low incorporation cost
    • Eligible to sponsor work and stay permit for foreign employee
    • Can open a branch office in any part of Indonesia

  • BUJKA

  • Nature
    • Permitted to engage in large-scale construction projects within a joint operation with a Local PT
    • Best suited for the larger global construction companies
    Structure
    • No local shareholders are required
    Capitalisation
    • No capital is required
    Benefits
    • Low incorporation cost
    • Allowed to work on a construction project in a joint operation with a Local PT without acquiring a construction license (SIUJK)
    • Eligible to sponsor work and stay permit for foreign employee
Nature
  • Allows profit-generating business activities
  • Allows up to 100% foreign ownership
  • Ideal for business sectors that are open for foreign investment
Structure
  • Minimum two shareholders (corporate/individual)
  • Minimum one local director
  • Must have at least one commissioner (can be a foreigner with a valid work permit)
Capitalisation
  • Minimum IDR 10 billion of investment
  • At least IDR 10 billion should be provided as a paid-up capital
Benefits
  • Full control of business
  • Eligible to sponsor work and stay permit for foreign employee
Nature
  • Not allowed to generate financial income
  • Allows up to 100% foreign ownership
  • Ideal for testing the waters before setting up a fully-fledged company
  • Works best for non-sales activities
Structure
  • No shareholder or director required
  • One chief executive is sufficient
Capitalisation
  • No capital is required
Benefits
  • Low incorporation cost
  • Eligible to sponsor work and stay permit for foreign employees
Nature
  • Not allowed to perform any sales and purchase activities
  • Allows up to 100% foreign ownership
  • Ideal for liaising, promotional, and market survey activities
Structure
  • No shareholder or director required
  • One chief executive is sufficient
Capitalisation
  • No capital is required
Benefits
  • Low incorporation cost
  • Eligible to sponsor work and stay permit for foreign employee
  • Can open a branch office in any part of Indonesia
Nature
  • Permitted to engage in large-scale construction projects within a joint operation with a Local PT
  • Best suited for the larger global construction companies
Structure
  • No local shareholders are required
Capitalisation
  • No capital is required
Benefits
  • Low incorporation cost
  • Allowed to work on a construction project in a joint operation with a Local PT without acquiring a construction license (SIUJK)
  • Eligible to sponsor work and stay permit for foreign employee

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FAQ

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.

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.

It should take between 30 to 45 days.
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