How to Set Up a Local PT Company in Indonesia

A local company or PT Company is Indonesia’s most common legal entity. Although PT is intended for Indonesian citizens, there are some conditions under which foreign investors can incorporate a PT in Indonesia.

Advantages of Establishing a PT in Indonesia for Foreign Citizens

Although other legal entities, such as PT PMA and Representative Offices, are explicitly created for foreign nationals, establishing a local company can offer more advantages for certain foreign entrepreneurs.

Lower Incorporation Costs

The capital needed for local companies is significantly lower than PT PMA, with a range of IDR 50,000,000 to over IDR 10,000,000,000. The amount of capital will determine the size of the company and its eligibility to sponsor work permits for foreign workers. Therefore, local companies are categorized based on their capital amount.

  • Small: IDR 50,000,000 – 500,000,000
  • Medium: IDR 500,000,001 – 10,000,000,000
  • Large: above IDR 10,000,000,001

Unrestricted in Certain Business Fields

The Positive Investment List regulates foreign ownership in different business sectors. Certain business activities may be entirely closed for foreign investors, while others may have partial restrictions. On the other hand, local companies have no limitations and may be the sole option for starting a business in Indonesia in the desired sector.

Registration Process of a Local PT Company in Indonesia

Local PT Company: The Establishment Process

<strong>1. Approval of Company Name</strong>
The requirement is for three words that are neither vulgar nor obscene.

<strong>2. Deed of Incorporation</strong>
To adhere to the regulations, including an Article of Association and having a notary present is necessary.

<strong>3. Domicile Letter</strong>
You must provide a domicile letter to indicate the location of your business.

<strong>4. Registration of Tax ID (NPWP)</strong>
A valid NPWP is required for securing other companies’ licenses, banking activities, and fulfilling tax obligations.

<strong>5. Application of NIB</strong>
Along with the NIB, business permits, and location, permits will also be issued one day after registration through OSS.

<strong>6. Company Registration Certificate (TDP) Acquisition</strong>
After that, you can apply for another permission (if needed).

Start a Local PT Company with InCorp Indonesia

InCorp Indonesia provides a comprehensive range of services, from document management to obtaining business licenses, supported by experienced and professional consultants. By partnering with InCorp Indonesia, you can concentrate on your business operations while leaving the administrative and licensing tasks to the experts.

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