How to Register a Company in Indonesia?

To encourage business growth within Indonesia, the government actively creates 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 done online, the rest of the processes 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, however, this is on a case-by-case basis.

Indonesia Incorporation Specialist Eric

Options for Fully Foreign-Owned Indonesian Companies

A company is considered a foreign company if there is a foreign investor or shareholder. Such companies must get approval from the board to coordinate 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 visas. Indonesia allows total foreign ownership in industries 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:

Register your business company as PT (Perseroan Terbatas)

PT is a local term for a limited liability company, which is the most common foreign company option 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 are subject to 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 and local entities as it supports work visas. PT companies require:

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

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 the Foreign Capital Investment Law and approved by the Capital Coordinating Board of Indonesia. PMA companies can be converted into public companies later.

Register your company as a KPPA

This is a foreign representative office, and the registration process takes 3-4 working weeks. This company registration type is suitable for investors who want to study the Indonesian 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

Aside from those mentioned above, you can register 2 other types of business entities you can register in Indonesia.

1. Nominee Limited Liability Company

You can register a company in Indonesia using an Indonesian nominee when you want to begin operations immediately. 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 needs 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 list on the stock exchange.

What are the Requirements to Set Up an Indonesian Company

For each type of business entity, there is a certain set of requirements that the company has to fulfil before incorporation.

Business Entities Requirements

PT

  • 2 local shareholders
  • 1 director
  • 1 commissioner
  • Projected investment value:
  1. Small-scale business: IDR 50 million
  2. Medium-scale business: IDR 500 million
  3. Large-scale business: more than IDR 10 billion
  • Virtual offices are allowed to be used as a registered business address

PT PMA

  • 2 shareholders
  • 1 director
  • 1 commissioner
  • Min. value of the investment plan for each business activity is IDR 10 billion
  • Local registered address in a commercial building

KPPA

  • Must employ at least 1 chief representative officer
  • The chief representative officer cannot be a director
  • Local registered address in a commercial building

Documents Required for Indonesia Company Incorporation

The documents required for PT and PT PMA are the same, although for KPPA, there is a set of different documents that you will have to provide.

Business Entities Documents
PT & PT PMA

(Foreign & Local Legal Body and Personal Foreigner)

Company Documents

  • Power of Attorney for submission document signed by each shareholder
  • Shareholder documents
  • Rental agreement between the company & building management
  • Original building domicile/statement from the building management
  • Building & land tax receipt (PBB) including the payment approval of the current year
  • IMB or certificate of ownership if the building is owned
  • Statement for lease (if any)
  • Min. 3 office photos-reception, signage of company & office room with business activity
  • Statement of domicile issued by the company & acknowledged by the building management
  • Company letterhead & copy or sample design of the company stamp

Shareholder Documents

  • Copy of Article of Association and its amendment in English r Bahasa Indonesia
  • Business registration certificate
  • Board of Directors structure

Personal Documents-Directors & Commissioners

  • Foreigner: Copy of coloured passport with a min. 18 months validity and 4 blank pages
  • Local: ID card (KTP & Taxpayer Identity Number)
  • Family card (KK)
  • Indonesia visa stamp
  • Residence of hotel or apartment domicile letter for the director
  • Recent passport-sized photo with red background for each Board of Director

NOTE: Edited photos are not accepted.

KPPA

Company Documents

  • Article of Association from the holding/ parent company with the Board of Director structure, shareholder, registered address, and business field
  • Letter of Appointment (LoA) signed & sealed by the director of the holding/ parent company
  • Letter of Statement (LoS) from the proposed Chief Representative Officer (CRO) that they accept the position as CRO, signed & sealed with stamp duty (Material 6000) if the letter is signed in Indonesia
  • Letter of Intent (LoI) signed & sealed by the holding/ parent company
  • Letter of Reference (LoR)
  • Original building domicile/statement from the building management
  • Building & land tax receipt (PBB) including the payment approval of the current year
  • IMB or certificate of ownership if the building is owned
  • Statement for lease (if any)
  • Min. 3 office photos-reception, signage of company & office room with business activity
  • Statement of domicile issued by the company & acknowledged by the building management
  • Company letterhead & copy or sample design of the company stamp

Chief Representative Officer Documents

  • Foreigner: Copy of coloured passport with a min. 18-month validity and 4 blank pages
  • Local: ID card (KTP & Taxpayer Identity Number)
  • Family card (KK)
  • Indonesia visa stamp
  • Residence of hotel or apartment domicile letter for the CRO
  • Recent passport-sized photo with a red background

NOTE: Edited photos are not accepted.

The shareholder documents vary for each type of PT PMA company, whether a foreign legal body, a local legal body, or a personal foreigner. These documents are below:

Business Entities Shareholder Documents
PT PMA-Foreign Legal Body
  • Copy of Article of Association and its amendment in English or Bahasa Indonesia
  • Business registration certificate
  • Board of Directors structure
PT & PT PMA-Local Legal Body
  • Copy of Article of Association and its amendment in English or Bahasa Indonesia
  • Copy of company taxpayer identity number (NPWP)
  • Copy of Domicile Letter from sub-district (Dominisili Kelurahan)
  • Copy of Business License (SIUP/NIB)
  • Copy of Company Registration Certificate (TDP/NIB)
  • Copy of KTP & NPWP for each Board of Director
  • Copy of passport for any foreign Board of Director
PT & PT PMA-Personal Foreigner
  • Copy of coloured passport with a min. 18 months validity and 4 blank pages

Procedure to Register a Company in Indonesia

There are 8 steps for company registration in Indonesia, which will take approximately 1-2 months for a complete setup.

Step 1: Apply for a company name

Check your desired company name is available – you can use our free company name checker to do so here! If the name is available, you may proceed to apply and register for your desired company name with the Ministry of Law and Human Rights.

Indonesia Incorporation Specialist Eric

Here are some tips when choosing a company name. Do not select names that:

  • Are similar to existing companies
  • Are identical or similar to any name of a state, government, or international agency without official approval
  • Does not conform to the purposes/ objectives/ activities of the company
  • Consist of a set of numbers, letters, or figures that do not form any words

Step 2: Apply for a Deed of Establishment

The Deed of Establishment needs to apply online, together with the submission of the certificate of the bank account and an official copy of the bank transfer advice. If the application is successful, you will receive a legalisation on the establishment of the company and can announce the establishment within the following 14 days from the Ministry of Law and Human Rights. All documents are required to be notarised before submission.

Step 3: Apply for the Certificate of Company Domicile

The next step is to apply for the Certificate of Company Domicile which all Indonesian limited liability companies are required to hold.

Indonesia Incorporation Specialist Eric

Step 4: Obtain a tax registration number (NPWP)

After getting your Certificate of Company Domicile, you will need to obtain a valid tax ID for financial purposes with the local tax authority. The documents required for this application include:

  • Deed of Establishment
  • The identity card of the director
  • Statement letter to confirm the place of business

You may also issues with a domicile certification for corporate taxation, 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) will also give the collector number.

Step 5: Get your business identification number (NIB)

The NIB need to be obtained from the Online Single Submission. This is a unique number that is assigned to your company as a form of identification (like an identification card!). You will also get registered by the Badan Penyelenggara Jaminan Sosial (BPJS) Ketenagakerjaan and BPJS Kesehantan as part of the package.

Step 6: Apply for other relevant documents and licenses

Different types of businesses require various business licenses. Depending on the nature of your business, you will need to apply for licenses before starting your operations.

Step 7: 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.

Step 8: 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 needs to register, and you may operate as a registered business. However, you must still do the following as part of the process:

  • You need to submit the labour report and other documents to 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)

KICKSTART YOUR COMPANY REGISTRATION IN INDONESIA TODAY

Come down to our office or get in touch virtually to get an incorporation assessment and insights to your industry in Indonesia..

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.

Share This Story, Choose Your Platform!

Related Business Articles

Got other questions?

Drop us a message on WhatsApp or connect with us through our contact form.

Join the discussions

Go to Top