Company Incorporation in Indonesia: Your Complete Guide Types of Legal Entities for Foreign Investors in Indonesia PT PMA If you are a foreign investor that wants full control of your business, then establishing a PT PMA is the best option you can opt for. PT PMA is the only legal entity in Indonesia that allows up to 100% foreign ownership. However, each sector has regulations on their permitted business activities as well as the maximum amount of shares foreigners can own determined by the Positive Investment List. Incorporate a PT PMA today General Representative Office (KPPA) A representative office (RO) is suitable for foreign investors and business owners that are at the early stage of expanding into Indonesia. RO’s allow foreign businesses to test the Indonesian market before establishing any commercial operations. RO’s also work best for non-sales activities, such as customer service support, approaching potential clients, as well as conducting marketing and brand awareness initiatives. Establish a KPPA now Representative Office for Business Trading (KP3A) KP3A is a representative office that is established specifically for business trading. Both general and trading RO’s are prohibited from conducting business activities that generate financial income. However, a trading RO may be established in any part of Indonesia, whereas a general RO is not able to do so. Establish a KP3A now Representative Office for Construction Company (BUJKA) Similar to KP3A, a BUJKA is a representative office specifically established for foreign construction companies. A BUJKA may engage in large-scale construction projects, but only under a joint operation with a local company known as Local PT. Despite its limitations, a BUJKA is still a good start for foreign construction companies to set their footprint in Indonesia, as they are allowed to collaborate on building projects without obtaining a construction license (SIUJK). Establish a BUJKA now The Process of Setting Up A Company in Indonesia Internal Process 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 draft your application letter addressed to related government bodies. Documents Submission We file all your documents to the related government bodies on your behalf. External Process 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 submission of Deed of Incorporation by the notary, the Ministry of Law and Human Rights will give approval. 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. *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 Indonesia 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 NatureNot allowed to perform any sales and purchase activitiesAllows up to 100% foreign ownershipIdeal for liaising, promotional, and market survey activitiesStructureNo shareholder or director requiredOne chief executive is sufficientCapitalisationNo capital is requiredBenefitsLow incorporation costEligible to sponsor work and stay permit for foreign employeeCan open a branch office in any part of Indonesia BUJKA NaturePermitted to engage in large-scale construction projects within a joint operation with a Local PTBest suited for the larger global construction companiesStructureNo local shareholders are requiredCapitalisationNo capital is requiredBenefitsLow incorporation costAllowed 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 NatureNot allowed to perform any sales and purchase activitiesAllows up to 100% foreign ownershipIdeal for liaising, promotional, and market survey activitiesStructureNo shareholder or director requiredOne chief executive is sufficientCapitalisationNo capital is requiredBenefitsLow incorporation costEligible to sponsor work and stay permit for foreign employeeCan open a branch office in any part of Indonesia NaturePermitted to engage in large-scale construction projects within a joint operation with a Local PTBest suited for the larger global construction companiesStructureNo local shareholders are requiredCapitalisationNo capital is requiredBenefitsLow incorporation costAllowed 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
Can you provide pricing examples for company registration services? To provide you with accurate pricing information for our company registration services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the service may vary accordingly. For detailed information, don’t hesitate to contact our consultants.
How do foreigners decide on the proper entity in Indonesia? It all depends on your business’s purpose and nature. Our consultants will help you to clear out the matters.
How to conduct a company registration in Indonesia for a foreigner? Foreigner have to establish a foreign-owned company (PT PMA) in Indonesia. For detail procedure, let’s talk to our consultants.
What is the cost for opening a company in Indonesia? It depends on the company type and area in which you want to open your company. But, the cost starts from USD 1,500 for a local company (PT) in Jakarta area.
How long does it take to register a company in Indonesia? It should take between 1 to 1.5 months. For speedy incorporation, you can choose a shelf company (ready-made company) instead.
Can I expand my business to Indonesia without having to establish a company? Yes, this particularly applies to import and export businesses. Instead of establishing a company, you can use an undername import service, also known as importer of record.
Can I set up a locally owned company as a foreigner? Of course. To do so, you need to engage with a local nominee service provider.
Company Registration in Indonesia: The Ultimate Guide Types of Legal Entities for Foreign Investors in Indonesia PT PMA If you are a foreign investor that wants full control of your business, then establishing a PT PMA is the best option you can opt for. PT PMA is the only legal entity in Indonesia that allows up to 100% foreign ownership. However, each sector has regulations on their permitted business activities as well as the maximum amount of shares foreigners can own determined by the Positive Investment List. Incorporate a PT PMA today General Representative Office (KPPA) A representative office (RO) is suitable for foreign investors and business owners that are at the early stage of expanding into Indonesia. RO’s allow foreign businesses to test the Indonesian market before establishing any commercial operations. RO’s also work best for non-sales activities, such as customer service support, approaching potential clients, as well as conducting marketing and brand awareness initiatives. Establish a KPPA now Representative Office for Business Trading (KP3A) KP3A is a representative office that is established specifically for business trading. Both general and trading RO’s are prohibited from conducting business activities that generate financial income. However, a trading RO may be established in any part of Indonesia, whereas a general RO is not able to do so. Establish a KP3A now Representative Office for Construction Company (BUJKA) Similar to KP3A, a BUJKA is a representative office specifically established for foreign construction companies. A BUJKA may engage in large-scale construction projects, but only under a joint operation with a local company known as Local PT. Despite its limitations, a BUJKA is still a good start for foreign construction companies to set their footprint in Indonesia, as they are allowed to collaborate on building projects without obtaining a construction license (SIUJK). Establish a BUJKA now The Process of Setting Up A Company in Indonesia Internal Process 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 draft your application letter addressed to related government bodies. Documents Submission We file all your documents to the related government bodies on your behalf. External Process 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 submission of Deed of Incorporation by the notary, the Ministry of Law and Human Rights will give approval. 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. *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 Indonesia 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 NatureNot allowed to perform any sales and purchase activitiesAllows up to 100% foreign ownershipIdeal for liaising, promotional, and market survey activitiesStructureNo shareholder or director requiredOne chief executive is sufficientCapitalisationNo capital is requiredBenefitsLow incorporation costEligible to sponsor work and stay permit for foreign employeeCan open a branch office in any part of Indonesia BUJKA NaturePermitted to engage in large-scale construction projects within a joint operation with a Local PTBest suited for the larger global construction companiesStructureNo local shareholders are requiredCapitalisationNo capital is requiredBenefitsLow incorporation costAllowed 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 NatureNot allowed to perform any sales and purchase activitiesAllows up to 100% foreign ownershipIdeal for liaising, promotional, and market survey activitiesStructureNo shareholder or director requiredOne chief executive is sufficientCapitalisationNo capital is requiredBenefitsLow incorporation costEligible to sponsor work and stay permit for foreign employeeCan open a branch office in any part of Indonesia NaturePermitted to engage in large-scale construction projects within a joint operation with a Local PTBest suited for the larger global construction companiesStructureNo local shareholders are requiredCapitalisationNo capital is requiredBenefitsLow incorporation costAllowed 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
Registering a Representative Company in Indonesia Why Do You Need to Set Up a Representative Office in Indonesia? A representative office means market presence without large capital investment. The primary purpose of representative offices in Indonesia is testing the water before the actual company incorporation. Furthermore, a representative office might conduct market research, approach potential clients and build brand awareness of your business. However, no activities that generate profit are allowed, and this is the prominent factor that distinguishes a representative company in Indonesia from other legal entities. The Benefits of Representative Office in Indonesia Low Incorporation Cost As mentioned, a representative office (RO) is an affordable way of how to penetrate the market in Indonesia. Whether you are not sure about your target audience or the presence of business partners, these companies will help you to understand the Indonesian market properly. Visa Sponsorship Even though representative offices are not permitted to generate revenues, they are entitled to sponsoring work and stay permits for their foreign employees. Moreover, an RO can sponsor a business visa for business partners coming to Indonesia. Organisational Structure To establish a representative office in Indonesia might be the most feasible solution for many entrepreneurs due to its lenient corporate structure. As opposed to a foreign company no shareholder or director is required, and only one chief executive is sufficient. Registration Process of a Representative Office in Indonesia Step 1: obtaining a representative office (KPPA) license Step 2: obtaining domicile letter from the local subdistrict Step 3: applying for taxpayer registration number (NPWP) Step 4: getting a company registration certificate (TDP) Starting a Representative Office in Indonesia with Cekindo Cekindo is a one-stop market entry provider that will assist you throughout the whole process of representative office formation. We will not only advise you on the most suitable type of an RO but also incorporate the company on your behalf. Currently, four types of representative offices are available: KPPA: General RO of a Foreign Company KPPPA (known as KP3A or K3PA): RO of a Foreign Trading Company BUJKA: RO of a Foreign Construction Service Company KPPA MIGAS: RO of a Foreign Oil and Gas Company Let us guide you through the representative office registration process and achieve the best results promptly. Fill in the form below or visit us in one of our offices located in Jakarta, Semarang or Bali and we will provide you with a free quotation on your business.