The process of company registration in Indonesia can be done in three ways.
Investors can start one of these legal entities: Representative Office, Local Company or Foreign Direct Investment Company known as a Limited Liability Company (PT PMA).
A foreigner can start doing business in Indonesia as a local citizen or a foreign investor under a local nominee arrangement as this kind of company allows only 100% local ownership. On the contrary to other legal entities, a local company is not a subject to such strict requirements and limits.
Foreign-owned limited liability company is a legal entity that can be fully owned by foreigners. However, the maximum foreign ownership is determined by the business sector and business activities. The restrictions are listed in a regulation called the Indonesian Negative Investment List.
Commonly considered as a branch of parent company overseas, it can be your first step to enter the Indonesian market. The purpose of this legal entity is marketing activity, preparing the establishment of PT PMA, or conducting market research. No direct selling or generating revenues is allowed.
A summary of business registration services and their timelines can be found here.
Check out our e-Book A comparison of company registration in Indonesia.pdf.
Advantages of company registration of a Limited Liability Company (PT PMA)
- You can officially start doing business in Indonesia and have the same rights and responsibilities as other local companies.
- Your company can join and participate in all tenders in Indonesia.
- You can apply for import and other business licenses, apply for product registration under your company and thus have better conditions for importing goods.
- You and your foreign employees can apply for a work visa (called KITAS) under the name of your company.
- Your foreign clients and visitors can directly obtain a business visa sponsored by your company.
Characteristics of an Indonesian Limited Liability Company (PT PMA)
- Can be owned up to 100% by foreigners. Maximum foreign ownership depends on the business classification mentioned in the regulating document called the Negative Investment List. Foreign ownership can be from 0 to 100% depending on the business industry. Check the updated Negative Investment List, here.
- A required minimum of shareholders is two. They can be both individuals or companies.
- According to the new Government Regulation Number 24 Year 2018 regarding Licensing which Integrated Electronically, there is a new system called Online Single Submission (OSS) which is supervised by Coordinating Ministry For Economic Affairs (Kemenko). All of licensing for legal entities will be handled through OSS. This system will process licenses faster than before. Foreign companies, however, cannot open a bank account before the incorporation process is completed. You are only required to submit a notary statement letter stating the amount that will be transferred once the incorporation is complete.
- Some business activities, such as the operation of restaurants or hotels, require special licenses.
- Foreign entities and entrepreneurs intending to establish a form of local company owned by foreign investors shall go through the procedures according to Indonesian laws and regulations based on Law No. 25 / 2007 regarding Capital Investment and Law No. 40 / 2007 regarding the Limited Liability Company.
The process of company registration for an Indonesian Limited Liability Company (PT PMA)
The entire registration and establishment process, including all procedures, takes from 6 to 8 weeks.
|1||Approval of company name at the Ministry of Law and Human Rights||2|
|2||Preparation of Article of Association by Notary||4|
|3||Obtaining Deed of Establishment at the Ministry of Law and Human Rights||3|
|4||Receiving Certificate of Domicile at the local government office||15|
|5||Obtaining Taxpayer registration number||3|
|6||Receiving NIB (Registration Number)||3|
|7||Obtaining Business License and/or Commercial License at OSS||3|
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.
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