One of the first steps to setting up a company in Indonesia is to understand the different types of companies in Indonesia. Company names are very important to the business as it is a key identifier of the brand. A strong and sticky company name can be profitable in the long run, in terms of brand equity.
Types of Companies in Indonesia
Between state-owned (BUMN) and private-owned companies (BUMS), there are five different acronyms commonly used when it comes to company incorporation in Indonesia.
State-Owned Company (BUMN)
A state-owned company, or ‘Badan Usaha Milik Negara’ (BUMN), is an independent body that are partially or wholly owned by the Indonesian government. There are two main types of BUMN:
A public company (PERUM) is owned by the state and are focused on maximising profits. The company’s capital is owned by the government and employees in such companies are considered civil servants.
A limited company (PERSERO) which receives its capital, usually in the form of shares or stocks, wholly or partially from separated state assets. These companies aim to gain profits while benefiting the public.
Private-owned Company (BUMS)
On the flip side, private-owned companies are companies set up by a singular founder or a group of private investors. They would earn a share of the profit that the company makes. There are three common types of private-owned companies:
1. Company Limited (Perseroan Terbatas – PT)
On the list of common types of private-owned companies, PT is top on that list. In a PT, there is a requirement of a resident director, a minimum of two shareholders and a commissioner. There are two types of PT in Indonesia noteworthy, namely:
Perseroan Terbatas Penanaman Model Dalam Negeri ( PT PMDN )
A Local Limited Liability Company
Perseroan Terbatas Penanaman Modal Asing ( PT PMA )
A Foreign Limited Liability Company