• How to Register a Indonesia Company

To encourage business growth within Indonesia, the government is actively creating a conducive environment for foreign investors through initiatives that reduce barriers. Today, the company registration process is simple and partly digitalised for ease of Indonesian company incorporation

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.

NOTE: 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 employees’ work permits. Indonesia allows total foreign ownership in industries that are not categorised under the Positive Investment List.

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

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. PT companies require:

  • One local director
  • Two local shareholders
  • A foreign or local commissioner

You can register your company as PMA (Penanaman Modal Asing)

PMA companies 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.

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.

You can register your company as KP3A

This is a foreign trade representative office.

Alternative Company Types to Consider

There are 2 other company types you can register in Indonesia, aside from the above mentioned.

1. Nominee Limited Liability Company

When you want to begin operations immediately, you can register a company in Indonesia using an Indonesian nominee. Registering this type of company enables you to bypass some foreign investment restrictions, close deals fast, and obtain contracts.

2. Public company

This type of company is required to adhere to stringent company registration regulations. It has at least 300 shareholders and a paid-up capital of IDR billion. It is a requirement to be listed under the stock exchange.

What is the Process of Registering a Company in Indonesia

Business registration and incorporation depend on your company type, and this also determines the registration duration. The following are the procedures for one to register a company in Indonesia:

Choose Your Business Structure

Decide which business structure is suitable for you. After which, you will have to assign or engage professional services such as corporate secretary, human resource, accounting, etc. To take care of your employees’ requirements, ongoing filings, and bookkeeping.

Choose a unique company name

The company name contains at least three different words. You are required to provide three options for your company name in English, Indonesia or both. These three name options save you the trouble of having to go back and think of a name if the first option has been already in use.

After deciding, you will need to register the company’s name at the Ministry of Law and Human Rights. Be sure to have your company name approved from the Notary Public as it is a sign that your business is a legal entity.

NOTE: You can change your company name after incorporation, however it requires time and effort to do so – you can find out more about selecting and changing company names here (link to article).

Have a registered office

As soon as you are confirmed with your business formation, do ensure that you have a registered office and a mailing address.

Register your company for a business license

The process of getting a business license varies with each business type. You are required to apply for a certificate of business registration and company registration documents from the offices of the Ministry of Trade.

 Incorporation checker

How to Apply for a Business License

To register your company, submit your duly filled application at the Investment Coordinating Board of Indonesia offices.

1. Obtain your company’s Deed of Establishment (DOE)

The other process in incorporating your company is obtaining DOE from the ministry of Law and Human Rights using a duly filled application form. All your company documents are to be notarised. The legalised documents are publicised within 14 days in the State Gazette.

2. Apply for SIUP (Surat Izin Usaha Perniagaan)

SIUP a permanent license for trading. You will use the receipt that you obtained while registering the company name.

3. Apply for Business Registration Number

You will be given a Business Registration Number, import license, customs identification, and you will also get registered by the Badan Penyelenggara Jaminan Sosial (BPJS) Ketenagakerjaan and BPJS Kesehantan as part of the package.

4. Have your company registered with the taxation office for tax compliance purposes

You will then be issued the company’s Tax Identification Number, which will be sent to your company’s address. You may also be issued with a domicile certification for taxation purposes, but the domicile is not mandatory. The domicile certificate is issued by the municipality or the building management in the office’s locality. A registration number Value Added Tax (VAT) collector number will also be given.

5. Obtain work visas

Both the local and foreign employees in your company will require work visas (KITAS) before working in your company. These visas come in the form of single-entry and multiple-entry business visas.

6. Set up a corporate bank account

The other activity you should consider when setting up an Indonesian company is opening a corporate bank account. This is where you deposit your paid-up capital after incorporating your company.

At this point, your company is considered registered, and you may operate as a registered business. However, you must still do the following as part of the process:

  • You are required to submit the labor report and other required documents at the Ministry of Labor within 30 days.

  • Apply social security programs for workers. This program sensitises employees on workplace accidents, security after retirement, security for pension, and death.

  • Next, be insured for healthcare and employee welfare from the Badan Penyelenggara Jaminan Sosial (BPJS)

Ready to incorporate a company in Indonesia or require a work visa? Reach out to us for a free consultation and see how we can be part of your business journey.

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FAQs

How long does it take to register a company?2021-10-27T17:11:47+08:00

The application and approvals for the various documents take around 1-2 months, sometimes up to 3 months. However, this is a rough estimation as every incorporation have different timeframes depending on the business.

What is the latest update on the Positive and Negative Investment List?2021-10-27T17:10:32+08:00

As of 4 March 2021, the Positive Investment List was introduced to significantly reduce the number of restricted sectors that prevents foreigners to enter from 350 to 46.

What is the Positive and Negative Investment List?2021-10-27T17:09:50+08:00

The Negative Investment List was replaced by the Positive Investment List in 2021. The list details the restricted sectors that the government prohibits investors and entrepreneurs to invest in.

Are foreigners allowed to set up a local PT company in Indonesia?2021-10-27T17:08:58+08:00

Yes, foreigners can incorporate a local PT company through a local nominee arrangement. To control the company as a foreigner, you can manage all the financials of the company by holding the company bank account.

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