In recent years, Indonesia has become a growing business hub in Asia. Many investors use Indonesia as an entry point to enter Asia’s market. To launch a business in Indonesia, whether the business owners are locals or foreigners, it is compulsory for them to register their company. Company registration may seem like a complicated process, but it is straightforward once you understand the process.

To encourage business growth within Indonesia, the government is actively creating a conducive environment for foreign investors through initiatives that reduce barriers and encourage growth. To date, the company registration process is simple. It is also partly digitized. Besides the first two steps that cannot be processed online, the rest of the process can be done online through the online system known as Online Single Submission (OSS).

Approval of incorporation documents takes about 10 working days, after which you draft your articles of Association and apply for business licenses. The overall incorporation/registration period is between two and three months. And it is worth noting that Indonesia does not allow registration of branch offices.

Options for Fully Foreign-Owned Indonesian Companies

A company is considered a foreign company if there is a foreign investor or shareholder in the company. Such companies must get approval from the board coordinating capital investment before engaging in Indonesia’s business activity. The amount of capital invested in a particular business will define the business company’s size and the eligibility to sponsor foreign employee’s work permits. Indonesia allows total foreign ownership in industries that are not categorized under the Negative Investment List.

If you are a foreign business owner who wants to register your company for full ownership, you have the following options:

  1. You can register your business company as PT (Perseroan Terbatas)
    PT is a local term referring to a limited liability company, and it is the most common foreign company option that incorporated in Indonesia. It exists in three categories.

    • Small-sized
    • Medium-sized
    • Large-sized PT Company

    The paid-up capitals vary depending on the category, and they are established upon the approval from the Capital Investment Coordinating Board. Most local and foreign investors with permanent residency employ this option.

    This type of Business Company is easy to set up, and it offers limited liability for most foreign entities and local entities as it supports work visas.
    Features:

    • One local director
    • Two local shareholders
    • A foreign or local commissioner
Register PT Company
  1. You can register your company as PMA (Penanaman Modal Asing)
    It can be fully or partially foreign-owned. Such a company is established under the stipulated regulations of Foreign Capital Investment Law and approved by the Capital Coordinating Board of Indonesia. PMA companies can be converted into public companies later.
  2. You can register your company as KPPA.
    This is a foreign representative office, and it takes 3-4 working weeks of the registration process. This company registration type is suitable for investors who want to study the Indonesia market for research and business-related development purposes. They serve as the parent company’s buying and selling agent. However, it is restricted to certain business regions such as services, banking, trading, mining, gas, and oil.
  3. You can register your company as KP3A
    This is a foreign trade