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Company Registration in Indonesia - Cekindo

Company Registration Indonesia – Understanding Requirements & Process

Company Registration Indonesia: Advisory On Legal Entities

When a foreign investor or business wants to register a company in Indonesia, Cekindo advises business owners on the 3 types of legal entities in Indonesia: Local Company, Foreign Direct Investment Company and Representative/Branch Office.

Local Company (PT) Setup

A Local Company is structured as an entity that is 100% owned by a local. It requires a smaller capital and has lesser limitations and requirements to fulfill. Foreigners who wish to open a Local Company can start one through a Special Purpose Vehicle (SPV) arrangement.

Learn how to Start a Local PT.

Foreign Owned Company (PT PMA) Setup

A foreign-owned limited liability company is a legal entity that can be fully owned by foreign companies or investors. However, the maximum foreign ownership is determined by the business sector and business activities. The restrictions are listed in Indonesia’s Positive Investment List.

Learn how to Start a PT PMA.

Representative Office (Branch Office) Setup

A Representative Office is also commonly referred to as a branch office, foreign companies or investors can fully own a Representative Office. This setup works best for non-sales-related business activities (e.g.: setting up call centers, design houses, market research). It is also an interim solution for preparing the establishment of PT PMA.

Learn how to Start a Representative Office.


Company Registration Indonesia: Difference Between Legal Entities

Foreign Limited Liability Company (PT PMA) Local Company (PT) Representative/Branch Office
Activity Any business activities which are not banned by Negative Investment List.

Required to invest with minimum IDR 10 billion after obtaining the Capital Investment Registration or Business License, in the first 5 years. This amount is applied to one business line and will be multiplied in accordance with how many business lines needed.

Allowed to choose a maximum 3 business category without any investment plan required after obtaining all the licenses required.

All business category is open.

Limited to the preparation of PT PMA establishment, market research, promotion, etc.

Not allowed to sign any contract, issue invoice, receive payment, or even apply for any other license, such as an import license.

Need to have the exact same name as the parent company.

Investment Plan Min. IDR 10 billion (USD 800.000) for each business activity
Stakeholder Min. 2 shareholders, 1 director, and 1 commissioner

All of the stakeholders can be a foreigner

Local representative as the director
and/or the commissioner

Min. 2 shareholders, 1 director, and 1 commissioner

All of the stakeholders shall be local

In the event there is no local shareholder,
director or commissioner. CEKINDO is able to provide Special Purpose Vehicle Services as Shareholder (corporate or individual), Director (individual) and Commissioner (individual)

1 Chief of Representative Office

Can be local or foreigner, except for Construction RO which shall have local Chief

Authorized Capital Minimum IDR 10 billion (USD 800 000) as the paid-up capital injected into the company’s bank account once the company is well established Currently there is no minimum authorized capital in Local PT. To determine the size of the company the paid-up capital shall be 25% of authorized capital as follows:
  1. Small: between IDR 51 – 500 million;
  2. Medium: between IDR 500 – 10 million;
  3. Large: above IDR 10 billion
No capital required
Additional Requirement For a business line that shall apply for Investment Capital Registration, it is mandatory to fulfill investment plan before getting Business License and running a business.

For the business line that directly apply for one-year Business License, it is allowed to start running the business or apply any further license required while realizing the investment plan.

For foreigner: professional shareholder and its special purpose agreement
Tax Obligations
  • PPh 21 (Employee income tax) Progressive Rate
  • PPh 25/29 (Corporate income tax) Progressive Rate
  • PPh 23 (Withholding tax for service provider) 2%
  • PPh 26 (Withholding tax for abroad services) 20%
  • PPn (Value added tax) 10%, if tax subject is a registered VAT Payer
  • PPh article 4, clause 2 (Witholding tax for construction) 10%
Same as PT PMA
  • PPh 21 (Employee income tax) Progressive Rate
  • PPh 23 (Withholding tax for service provider) 2%
  • PPh 26 (Withholding tax for abroad services) 20%
  • PPh article 4, clause 2 (Witholding tax for Tax Obligations construction) 10%
Mandatory Tax Report
  1. PPh 21, PPh 23, PPh 26, PPh 4 ayat 2 (Monthly Report)
  2. PPh 25/29 (Corporate income tax) [Annualy]
Same as PT PMA PPh 21, PPh 23, PPh 26, PPh 4 ayat 2 (Monthly Report)
Negative Investment List Negative Investment List Indonesia
Documentation Needed
  1. Copy Valid Passport minimum 18 month from expiry date
  2. Company Legal document if the shareholder is a legal entity. (Plus Director Passport min 18 month from expiry date)
  3. Leased Agreement or Deed of sales and purchase. (only if there are plan to buy the office space)
  4. Company Address
  1. Copy Valid KTP/ Personal ID (Indonesian) & NPWP (Tax Payor ID)
  2. Company Legal document if the shareholder is a legal entity (Plus Director Valid ID)
  3. Leased Agreement or Deed of sales and purchase (only if there are plan to buy the office space)
  4. Company Address
  1. LOA (Letter of Appointment from Director of Mother Company) legalized by corresponding embassy
  2. Letter of Intent (Legalized by corresponding embassy)
  3. Letter of statement (Legalized by corresponding Embassy)
  4. Letter of Reference (Issued by Embassy)
  5. Copy Valid Passport minimum 18 month from expiry date
  6. Company Legal document if the shareholder is a legal entity. (Plus Director Passport min 18 month from expiry date)
  7. Leased Agreement or Deed of sales and purchase. (only if there are plan to buy the office space)
  8. RO Company Address

*Cekindo can help drafting for point 1, 2, 3.

Legal Documents Created
  1. Akta Notaris (Notarial Deed)
  2. Approval from ministry of Law and Human Rights
  3. NPWP (Company Tax Payer ID)
  4. Domicile Letter
  5. NIB Number
Same as PT PMA
  1. NPWP (Company Tax Payer ID)
  2. Domicile Letter
  3. NIB Number (Special for trading rep office)
Estimated Time (After Supporting Document Received) 1 – 1.5 Month 1 – 1.5 Month 1 – 1.5 Month
Company Secretary Not Necessary, but it will be better if there is a company secretary


Contact Us

Cekindo registers several companies every month, and our legal team is ready to answer your questions. Fill in the form below and get the latest information on company registration in Indonesia.

Also, we will be happy to meet you in our offices located in Jakarta, Semarang, and Bali.

Company Registration Indonesia – Frequently Asked Questions

Can I set up a locally-owned company as a foreigner?

Of course. To do so, you need to engage with a Special Purpose Vehicle service provider.

Can I expand my business to Indonesia without doing company registration in Indonesia?

Yes, this particularly applies to import and export businesses. Instead of establishing a company, you can use an undername import service, also known as an importer of record.

How long does it take to do company registration 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 set up a joint venture company for my business?

Yes. A joint venture company can be in the form of PT PMA (foreign company) or PT (local company). Requirements for each establishment are different.

What is Business Registration Number in Indonesia?

Business Registration Number is proof that a company, regardless of type, is legally registered in Indonesia. A company that does not have a Business Registration Number may have to face dissolution.

Can I set up a company in Indonesia without calling a notary or a lawyer?

Yes. You can do it with the assistance of a professional consultant who usually has in-depth knowledge of the company registration process in Indonesia.

Do local and foreign companies pay the same tax?

Yes.

What is the cost of 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.

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