Indonesia is one of Asia’s economic success stories, with the reformasi period’s reforms laying solid foundations for long-term growth. This has piqued the curiosity of numerous foreign investors in the country.
The main question that arose, however, was what the true cost of business in Indonesia doing is. Before we go any further, we need know that forming a Limited Liability Company, or Perseroan Terbatas Penanaman Modal Asing, involves a few stages (PT PMA).
Steps to Set up a Limited Liability Company in Indonesia
You must first decide the business field you want to invest in or start a company in. To comply with Indonesian regulations, you would need to consult the Negative Investment List to determine how many shareholders a foreign corporation can have in respect to the firm shareholdings.
The next step you would need to comply is that you would need to establish at least 1 director, 1 commissioner and 2 shareholders in the said company. Do note however that the directors and commissioner can also be a shareholder.
Next, you would need to provide the following required documents.
No. of required documents:
Power of Attorney for submission documents sign by each shareholder (prepare by us)
Rental agreement between the company and building management
Original building domicile/statement from the building management
Building and land tax receipt (PBB) including the payment approval of current year
IMB or certificate of ownership if the building is owned
Statement for lease and use space office (if any)
Office photos (minimum 3 photos: reception, signage of the company & office room with activity in it)
Statement of domicile issued by the company and must be acknowledged by the building management
Company letterhead and copy/sample design for company stamp
No. Shareholder Documents (Foreign Company)
Copy of Article of Association and its amendment should be in English or Bahasa
Business registration certificate
Board of Directors structure
No. Personal documents for each director and commissioner
For foreigner: color copy passport with validity minimum 18 months and 4 blank pages
For local: ID card (KTP and Taxpayer Identity Number (NPWP)
Family card (KK)
Indonesia visa stamp (if any)
Residence of hotel or apartment domicile letter for the director
Recent photo passport size with red background for each BoD (edited photo is unacceptable)
NOTE: The minimum investment in Indonesia to start a PT PMA company is IDR 10 billion (USD 750,000.00) or equivalent to the exchange rate. Unlike incorporating a Local PT company in Indonesia which varies accordingly to the size of the business as per Regulation 40 of Year 2007, you will need to inject the minimum amount of IDR 10 billion in your PT PMA company excluding the value of the land and buildings by the company.
Small Trade Business License must be owned by a trading company who’s the net worth (paid up capital) is more than IDR 50,000,000, up to IDR 500.000.000, excluding land and building of business premises.
Medium Trade Business License
Medium Trade Business License must be owned by a trading company who’s the net worth (paid up capital) is more than IDR 500.000.000, up to IDR 10.000.000.000, excluding land and building of business place.
Unlike setting up a PT company varies in cost depending on the size of the company, a PT PMA company requires a minimum investment of IDR 10 billion in Indonesia. This applies to all business sectors and the amount of minimum investment excluding the value of the land and buildings owned by the company. Besides that, foreigners would be required to pay a capital requirement of at least IDR 2.5 billion (USD 175.000.00) to form a foreign owned PMA company in Indonesia.
Foreign investors are required to comply with the cost of setting up a PT PMA company in Indonesia which can be difficult for many investors as the capital requirement is no doubt expensive. Here in Paul Hype Page, we provide you with the solution to satisfy the large capital requirement to set up a PT PMA company in Indonesia.
For foreign investors to run a successful business in Indonesia, a legal entity known as foreign-owned company, or PT PMA must be established. Alternatively, foreigners can opt for representative offices!
Why is Indonesia good for international business?Paul Hype Page2021-12-23T13:46:42+08:00
Indonesia is a thriving democracy with significant regional autonomy. It is located on one of the world’s major trade routes and has extensive natural resource wealth distributed over an area the size of the United States and comprised of over 17,000 islands. It is a top-ten market for U.S. agricultural products.
Is it easy doing business in Indonesia?Paul Hype Page2021-12-23T13:46:23+08:00