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Establish a Local Nominee Company in Indonesia

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Setting Up a Company in Indonesia

Currently, each investor has these three general options to set up a company in Indonesia:

1) Setting up a Foreign Limited Liability Company, with minimum requested capital above USD 1 million (equivalent for IDR 10 billion)

2) Setting up a Representative Office, with no minimum requested capital and 100% ownership, however with limited business activities (can only conduct activities that generate no profits)

3) Setting up a Local Company, by using a local nominee service that provides professional directors/shareholders/commissioners and without the filing requirements for foreign company

Restrictions on Foreign Limited Liability Company in Indonesia

Although many foreign investors choose to establish a foreign limited liability company, also known as a PT PMA, to run a business in Indonesia, the Indonesian government restricts foreign ownership in certain business sectors, which can be found in the Negative Investment List (NIL).

Some of these restricted sectors only allow partial foreign ownership, and some of them prohibit foreign ownership entirely.

As such, foreign investors need to opt for another option in case their selected business sector is partially or fully prohibited for foreign ownership. This other option is to establish a local nominee company.

What is a Local Nominee Company in Indonesia?

In the event of business sectors that are partially or fully closed to foreign ownership, foreign investors can always partner with an Indonesian company or individual via a strictly guarded nominee agreement.

In other words, a local nominee company allows foreign investors to run a business in a restricted business sector in Indonesia.

Despite the status of a local nominee company that can only be owned 100% by an Indonesian citizen, the foreign investor will have full control over the company – given that you find a reputable local nominee service provider, such as Cekindo, to draft an effective agreement for you.

In addition to the above benefit, establishing a local nominee company in Indonesia gives you these other benefits:

  • No Investment Amount Required

It might come as a surprise for some foreigners, but certain business sectors require foreigners to have a minimum foreign investment plan of IDR 10 billion.

What is more, you will also need to pay an initial amount of IDR 2.5 billion in the investment plan right away.

Because of the limitation, most foreigners opt for a less financially demanding choice, which is a local nominee company with no minimum investment amount.

  • Faster and Less Complicated Process

When setting up a PT PMA, foreigners will need to go through a series of procedures that come with certain requirements. However, when setting up a local nominee company, the procedure is less complicated and the requirements are easier to satisfy.

For instance, a foreign-owned company is required to have audited financial reports in order to receive a permanent business license. Without it, it is impossible for companies to get other necessary licenses, such as an import license.

Establishing a Local Nominee Company Securely

To ensure a safe local nominee company establishment that is fully in compliance with the applicable Indonesia law, the following suggestions should be taken into consideration:

  • Have a minimum of 2 local shareholders at  your local nominee company (just like PT PMA) to avoid one person owning the majority of the shares.
  • Withdraw or transfer money/profits from the company regularly.
  • Look for an experienced and reputable business consulting firm that is confident to help you take care of all processes, draft the necessary agreements and protect your rights.

Local Nominee Company Services with Cekindo

Cekindo can provide you with a company setup for all of the above-mentioned options, including a full package for a local company with nominee agreements to ensure you that you will have your local company under full control.

Cekindo’s full package for Professional Shareholder and Director services through nominee agreements includes:

  1. The complete cost of local company registration (include office address)
  2. Business License
  3. 2 local professional shareholders, including due diligence
  4. 1 local professional commissioner, including due diligence
  5. A full package of agreements for professional shareholders/commissioners/directors to ensure your business is running safe and legally based on Indonesian regulations

Notes:

  • If you do not have own Local Director, Cekindo provides a professional director during the company registration process (max 6 months), with additional fee USD 1500, includes company document revision to change the professional director (after company established).
  • In case you do not have a working office yet, Cekindo can provide you with a serviced office for 1 workstation, with discount 15% per year.
  • The nominee fee for the second year onwards is USD 3,000 per year, includes 2 local shareholders and 1 local commissioner

 

More about how to safely engage professional shareholder and director services by using nominee agreements in Indonesia, please read here.

Our full package includes everything you need to operate a business in Indonesia without the filing requirements for foreign company and as the local company will give you flexibility without business field limitations.

You can also request only some part of our package if you have own local nominee, director or commissioner.


Contact Us

Send your question by filling in this form below. Our consulting team will quickly answer you via E-mail. You can visit our office to know more details about our Indonesia Nominee Company.