Foreign Entrepreneurs can set up their company and establish a Limited Liability Company (LLC), also known as Penanaman Modal Asing (PMA) in Indonesia. The company will be 100% foreign-owned, or it can also be established through a joint venture with Indonesians partners. This gives foreigners full control of decision making for the company.
How will we have to prove that we have IDR10 billion?
The capital IDR10 billion will be stated in the Deed of Establishment which will be done by the Notary.
What is the process of injecting the said sum? Do we have to open an Indonesian bank account?
You must inject the said sum at the company’s bank account. However, you only can open the bank account after you complete all the incorporation documents.
Since you will not have a company’s bank account during the incorporation process, the shareholders need to sign a capital statement letter and confirm that the investors have sufficient funds to transfer the capital once the company is incorporated and have bank account. The capital statement letter will be prepared by the Notary and they will submit the letter to the Ministry of Law and Humans Rights as needed.
How should the IDR10 billion be utilized?
The IDR10 billion can be utilized to operate the company business such as paying salaries, operational fees, and so on.
How long would we need to retain the 25% paid up capital from the IDR10 billion?
Maximum 60 days after the approval letter from the Ministry of Law and Human Rights is issued.
- How many shareholders are required? How many local and how many foreigners?
Minimum 2 shareholder, can be 1 local and 1 foreigner or can be 2 foreigners.
- Can a shareholder be an individual or a company?
Can be individual and a company.
- How many percent shares must each local/foreigner shareholder hold?
Shares can be owned up to 100% by the foreign investors, but according to the Negative Investment List, ownership of the PMA shares is classified based on the business field and it is varies from 0% to 100%.
- Can a foreigner having a work permit working in Indonesia be regarded as qualified to be a local Director in the company?
If the foreigner having a work permit, then he or she can be the director of the company.
Negative Investment List
Can a foreign company still be set up in Indonesia if the business type is not in this list?
If yes, what are the shareholding requirements?
The Negative Investment List is compiled by the Indonesia Investment Coordinating Board (BKPM). It stipulates which sectors are open to foreign investment in Indonesia as well as the percentage of ownership permitted.
However, if you intend to set up business in Indonesia if the business field is not in the list, we can offer you to set up a local company (known as a Perseroan Terbatas or PT for short). Please note that to register a local PT Company, it has to be 100% owned by Indonesian citizen. Hence, you will need a local nominee with notarized nominee agreement to protect the foreign entrepreneur’s ownership in the company. We will ensure the nominee arrangements safely by managing notarized nominee agreement between you and the local nominee.
What are the documentations needed for setting up a company in Indonesia?
General documents requirements:
- Rental agreement between the company and building management
- Original building domicile/statement from the building management
- Building and land tax receipt including the payment approval of current year
- 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
Personal documents requirements:
- Foreigner: color copy passport with validity minimum 18 months and 4 blank pages
- Local: Indonesia ID card & Taxpayer Identity Number
- Family card
- Resident domicile letter
- Recent photo with red background (edited photo is unacceptable)
Shareholder documents requirements (for foreign legal entity):
- Copy of Deed of Establishment and its amendment (should be in English or Bahasa)
- Business registration certificate
- Board of Directors structure
Shareholder documents requirements (for local legal entity):
- Copy of all company’s documents (Deed of Establishment, tax identity number, domicile letter, business license or business registration certificate)
- Copy of ID card and taxpayer ID number for each local BoD and copy passports if any foreigner in it
Shareholder document requirement (for personal foreigner):
- Copy passport with validity minimum 18 months and 4 blank pages
What are the considerations needed when looking for a business operation of the company?
A resident address (house or apartment) cannot be use as an office address. You need to use business or commercial area as your office address.
What is the normal timeline?
||Approval of company name at the Ministry of Law and Human Rights
|| Preparation of Article of Association by Notary
||Obtain Deed of Establishment at the Ministry of Law and Human Rights
||Obtain Domicile Letter at the local government office
||Obtain Tax payer registration number (NPWP)
||Register Business Indentification Number (NIB = Nomor Induk Berusaha)
||Register Business License (Izin Berusaha)
Total estimate duration: 23 working days
HELIOCENTRIC PTE. LTD.
— Nayagam Zora
Another Successful Company setup with Employment pass.
Happy Client, Zora, HELIOCENTRIC
Zora started her career in media production …