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Cost of doing Business in Indonesia

5 min read|Last Updated: July 29, 2022|
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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)

  • Shareholder documents

  • 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)

Click here to have a further understanding on how to Register a Foreign Owned PMA Company as a Foreigner!

After the following steps are completed, then you can proceed with the registration process. It will take a rough estimate of 23 days to successfully register a company in Indonesia.

No.  Description  Estimate Duration 

(Working days) 

1  Approval of company name at the Ministry of Law and Human Rights   2 
2  Preparation of Article of Association by Notary (Akta)   3 
3  Obtain Deed of Establishment at the Ministry of Law and Human Rights (SK Kehakiman)   4 
4  Obtain Domicile Letter at the local government office   5 
5  Obtain Tax Identification Number (NPWP)   3 
6  Register Business Identification Number  

(NIB = Nomor Induk Berusaha)   

3 
7  Register Business License (Izin Usaha)   3 

What are the Common Types of Companies in Indonesia?

There are a few different types of entities you can incorporate in Indonesia, such as:

1. Local Company or Perseroan Terbatas (PT)

  • Small Trade Business License

    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.

  • Large Trade Business License

    Large Trade Business License shall be owned by a trading company whose net worth (paid up capital) is more than IDR 10,000,000,000 excluding land and building of business premises.

2. Foreign Owned Company / Perseroan Terbatas Penanaman Modal Asing (PT PMA)

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.

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FAQs

Can a foreigner do business in Indonesia?2021-12-23T13:47:02+08:00

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?2021-12-23T13:46:42+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?2021-12-23T13:46:23+08:00

Indonesia ranks in the 73rd placeThe country experiences an increase of 1.42 point, but the increase is lower than last year when the score increases 2.25 points to 66.54. 

How much does it cost to start a business in Indonesia?2021-12-23T13:45:11+08:00

The minimum investment for an FDI company is above IDR 10 billion (excluding land and building cost), while the minimum paid up and issued capital is IDR 2.5 billion. 

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Join the discussions

  1. I Dewa Gede Jaya Hermawan September 17, 2021 at 2:53 pm - Reply

    hi .

    bisa dabantu untuk pembuatan PT PMA?

    dan berapa biaya sampai selesai pendirian PT PMA

    terimakasih

    • Paul Hype Page September 21, 2021 at 12:56 pm

      Hi Dewa Gede,

      bisa dabantu untuk pembuatan PT PMA?

      dan berapa biaya sampai selesai pendirian PT PMA

      terimakasih

      Best Regards,
      Paul

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