Company Establishment in Indonesia

Engaging in a company registration in Indonesia is the first step to expanding your business operations legally into the country. There are many options business owners can opt for their company registration in Indonesia, but the most common types are a Foreign-Owned Company (PT PMA) or Representative Office. Each has its benefits, and one may be better suited for you based on your business expansion objectives.
Table of Content

Types of Legal Entities for Foreign Investors in Indonesia

PT PMA (Foreign-owned Company)

The PT PMA is an optimal choice for foreign investors seeking full control in Indonesia with up to 100% foreign ownership or looking for company registration in Indonesia, subject to sector-specific regulations.

Representative Office for Business Trading (KP3A)

KP3A is specialized office for business trading, but restricted from generating financial income. Investors can build and operate this business structure anywhere all across Indonesia.

General Representative Office (KPPA)

KPPA is ideal for foreign investors testing the Indonesian market and engaging in non-sales activities like customer service, marketing, and client outreach.

Representative Office for Construction Company (BUJKA)

Establishment of BUJKA is intended for foreign construction companies. This business structure enables collaboration on large-scale projects through joint operations with a local company (Local PT), without the need for a construction license (SIUJK).

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The Process of Setting Up A Company in Indonesia

Internal Process

Consultation

Talk to our experts about your expansion objectives and how to do company registration Indonesia.

Collecting Required Documents

Provide us with all the documents required for company establishment in the company registration Indonesia process.

Document Review

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

Drafting

We will draft your application letter addressed to related government bodies for the company registration Indonesia process.

Documents Submission

We file all your documents to the related government bodies on your behalf for your company registration Indonesia.

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 registration Indonesia 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 for their company registration Indonesia process. 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

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

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Disclaimer: The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.

We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.

We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

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