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.
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
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
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
|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||According to the latest changes laid out in Job Creation Law, the size of Local PT in Indonesia based on paid-up capital as follows:
||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||-|
||Same as PT PMA||
|Mandatory Tax Report||
||Same as PT PMA||PPh 21, PPh 23, PPh 26, PPh 4 ayat 2 (Monthly Report)|
|Negative Investment List||Negative Investment List Indonesia||-||-|
|Legal Documents Created||
||Same as PT PMA||
|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|
Can I set up a locally-owned company as a foreigner?
Can I expand my business to Indonesia without doing company registration in Indonesia?
How long does it take to do company registration in Indonesia?
Can I set up a joint venture company for my business?
What is Business Registration Number in Indonesia?
Can I set up a company in Indonesia without calling a notary or a lawyer?
Do local and foreign companies pay the same tax?
What is the cost of opening a company in Indonesia?