Service Category: Company Registration

Company Registration in Indonesia

Types of Legal Entities for Foreign Investors in Indonesia

company registration indonesia pma

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

company registration in indonesia - representative office

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

  • 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

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

setting up a representative office in Indonesia - icon1
Step 1: obtaining a representative office (KPPA) license

setting up a representative office in Indonesia - icon 2
Step 2: obtaining domicile letter from the local subdistrict

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Step 3: applying for taxpayer registration number (NPWP)

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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:

  1. KPPA: General RO of a Foreign Company
  2. KPPPA (known as KP3A or K3PA): RO of a Foreign Trading Company
  3. BUJKA: RO of a Foreign Construction Service Company
  4. 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.

How to Set Up a Local PT Company in Indonesia

Local Company (PT) is the most common legal entity in Indonesia. Even though a local company is intended for Indonesian citizens only, there are some circumstances under which a foreign investor can incorporate a local company in Indonesia as well.

Benefits of a Local PT Company in Indonesia for Foreigners

Even though there are other legal entities particularly designed for foreigners — a limited liability foreign-owned company and representative office — starting a local company might bring more benefits to some foreign entrepreneurs.

Not Restricted from Some Business Fields

The Negative Investment List is a document that regulates foreign ownership of businesses based on business sectors they operate in. Thus, some business activities are fully closed to non-domestic investors, and some are partially limited. On the other hand, a local company is not a subject to this regulation, and it might be the only choice how to start a business in Indonesia in your field.

Lower Incorporation Costs

In comparison with a foreign-owned company, the paid-in capital of a local company is much lower. In general, it ranges from IDR 50,000,000 up to more than IDR 10,000,000,000. The amount of the capital defines the size of the company, which further determines whether a company is eligible to sponsor a work permit for a foreign worker (and how many).

  • Small : IDR 50,000,000 – 500,000,000
  • Medium : IDR 500,000,001 – 10,000,000,000
  • Large : above IDR 10,000,000,001

Registration Process of a Local PT

Icon 1 - company-nameSTEP 1: COMPANY NAME APPLICATION
Submit your company name to Ministry of Law & Human Rights

icon 2STEP 2: ARTICLE OF ASSOCIATION PREPARATION
This requires presence of a notary

icon-3STEP 3: DEED OF ESTABLISHMENT APPROVAL
Deed of Establishment is approved by Ministry of Law & Human Rights

icon-4STEP 4: CERTIFICATE OF DOMICILE ACQUISITION
Obtained from local government to show business location

icon-5STEP 5: TAXPAYER REGISTRATION NUMBER (NPWP) APPLICATION
To secure other licenses, fulfill tax obligations and open a bank account

icon-6STEP 6: BUSINESS IDENTIFICATION NUMBER (NIB) APPLICATION
Application is done via Online Single Submission (OSS) system

icon-7STEP 7: COMPANY REGISTRATION CERTIFICATE (TDP) ACQUISITION
After, you can apply for additional licenses (if required)

Starting a Local Company with Cekindo

If you are not sure what type of company is suitable for your business, contact us via the form below or visit us in one of our offices located in Jakarta, Semarang and Bali. Cekindo will assist you to establish your local company in Indonesia based on your needs.

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