Foreign entrepreneurs can set up a company of their own in Indonesia. Foreign-owned companies in Indonesia are known as Penanaman Modal Asing (PMA) companies. PMAs are limited liability companies. They may either be completely foreign-owned or established through a joint venture with Indonesian partners in accordance with the Negative Investment List. The Negative Investment List stipulates which sectors are open to foreign investment in Indonesia as well as the percentage of foreign ownership permitted.
An initial paid-up capital payment of 10 billion rupiah is required for the setup of a PMA. To prove that such an amount exists, the PMA can deposit all of it as paid-up capital or send a financial balance sheet of the total amount to any relevant authorities. The amount of capital will be stated in the Deed of Establishment and confirmed by a notary. The paid-up capital can be used to pay for employees’ salaries, operational fees, product costs, or any other necessary business expenses.
The owner of a PMA is to deposit the sum of paid-up capital into the company’s bank account. However, the bank account may only be opened after completion of all incorporation documents. Therefore, before the company bank account is opened, the shareholders are to sign a capital statement letter to confirm that the investors have sufficient funds to transfer the capital once the company has been incorporated and has a bank account in its name. The capital statement letter will be prepared by a notary who will submit it to the Ministry of Law and Human Rights.
Shareholders and Directors of a PMA
Every PMA in Indonesia is required to have at least two shareholders. At least one shareholder of a PMA must be a foreigner. A shareholder of a PMA may either be an individual or a company. Foreign shareholders may own as many of the shares of the PMA as is allowed according to the stipulations mentioned in the Negative Investment List.
It is possible for a foreigner to serve as the director of a PMA. However, before doing so, the director of the PMA must first have obtained a work permit which is valid in Indonesia.
Negative Investment List
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. Sectors which bar foreign investment in Indonesia are not open to the entry of PMAs.
Therefore, if you intend to set up a business in Indonesia which is part of a sector in which foreign investment is not allowed, we at Paul Hype Page & Co can assist you in the setup of a local company, also known as a Perseroan Terbatas (PT). PTs must be completely owned by one or more Indonesian citizens. Therefore, if you are not an Indonesian citizen, you will need a local nominee director who comes with a notarized nominee agreement. We will attend to such arrangements by managing the notarized nominee agreement between you and the local nominee.
General Document 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 for the current year
- Certificate of ownership if the building is owned
- Statement for lease and use space office (if any)
- Office photographs (minimum of three photographs: reception, signage of the company, and office room with activity in it)
- Statement of domicile issued by the company and acknowledged by the building’s management
- Company letterhead and copy or sample design for company stamp
Personal Document Requirements
- Foreigners: color copy of the passport with a validity of at least 18 months as well as four blank pages
- Locals: Indonesia ID card and Taxpayer Identity Number
- Family card
- Resident domicile letter
- Recent photograph with red background (must not be an edited photograph)
Shareholder Document Requirements (for Foreign Legal Entities):
- Copy of Deed of Establishment and its amendment (to be in either English or Indonesian)
- Business registration certificate
- Board of Directors structure
Shareholder Document Requirements (for Local Legal Entities):
- Copy of all of the company’s documents (Deed of Establishment, tax identity number, domicile letter, and business license or business registration certificate)
- Copy of ID card and taxpayer ID number for each local member of the Board of Directors
- Copy of passports of any foreign member of the Board of Directors
Shareholder Document Requirements (for Foreign Individuals):
- Copy of passports with a validity of at least 18 months as well as four blank pages
A residential address (house or apartment) cannot be used as an office address. A business or commercial area must be used as the office address.
Procedure of PMA Setup
|1||Approval of Company Name at the Ministry of Law and Human Rights||2|
|2||Preparation of Articles of Association by Notary ||3|
|3||Obtaining of Deed of Establishment at the Ministry of Law and Human Rights ||4|
|4||Obtaining of Domicile Letter at a local government office ||5|
|5||Obtaining of Taxpayer Registration Number (NPWP) ||3|
|6||Registration of Business Identification Number (NIB/Nomor Induk Berusaha) ||3|
|7||Registration of Business License (Izin Berusaha) ||3|
Total estimated duration: 23 working days
Click here for more information in regards to Indonesia Company Registration.
Paul Hype Page & Co – OSS service provider and Asean Chartered Accountant.
Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia
Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.
How we can help you:
We will call you back, please click below link and make appointment with our Sales consultant :
Step 1- Listen to your Business plan and Relocation needs.
Step 2- Analysis your Tax Planning
Step 3- Recommend the most suited type of Company Incorporation, Open Bank account and Work Visa
Step 4- Arrange for your Spouse and Children Visa
Step 5- Assist as your company to hire staffs and handle all HR matters
Step 6- Every financial year end, we assist you with your yearly OSS Finanical and Tax Compliance
Step 7- Assist you to expand business to Malaysia, Indonesia, Vietnam and Thailand.
Get in Touch with Us Today.
Paul Hype Page