Setting up a company in Indonesia is easy – what comes next may not be that simple. As there are many regulations and legal obligations that an Indonesia company should abide to. Understanding these could be time consuming and confusing, especially for new businessowners or foreigners.
No matter the types of legal business entity you have incorporated in Indonesia, from Persoroan Terbatas (PT) or Limited Liability Company (LLC), there are legal obligations to take note of. Local PTs account for the vast majority of businesses in Indonesia as the benefits include:
A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a legal entity which foreigner can use to conduct commercial activities in Indonesia established under the Indonesia law. In a PT PMA, foreigner both individual and legal entities can be registered as shareholder.
Legal Obligations of an Indonesian Company
Under the Indonesian Company Law,
Parent company’s Liability According to Company Law
The parent company can be liable if one of the following applies:
Indonesia Consumer Protection Law Requirement
Several products, such as foods and drugs, are subject to additional regulatory requirements as regulated by, among other things:
What are the Requirements for Formation of an Indonesian Company?
The main registration requirements to establish a corporate business vehicle (PT PMA) are:
A PT PMA must normally submit the following reports:
“PT” simply means a limited liability company. That’s why you almost always see Indonesian company names starting with a “PT.”. It’s simply referring to their limited liability status.
A Limited Liability Company (LLC) is a business structure allowed by state statute. … Owners of an LLC are called members. Most states do not restrict ownership, so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members.
Indonesia implements a mixed legal system with the civil law system as the main legal system adopted from the Dutch colonial law. Indonesia also recognises the customary legal system (sistem hukum adat) and religious legal system (Islamic sharia law).
Indonesia’s Company Law (Law No. 40 of 2007 regarding Limited Liability Companies) regulates how companies operate their corporations in Indonesia. Since the Company Law was enacted in 2007, it has not been amended nor were there any new regulations issued in 2015 related to the Company Law.