Directors, Shareholders and Commissioners
There are also specific requirements related to the directors, shareholders, and commissioners of a PT PMA.
Shareholders are those who cumulatively own the company and possess rights related to the company. Each PT PMA in Indonesia must have a minimum of two shareholders. The shareholders of a PT PMA may either be individuals or corporations. Shareholders who are individuals may either be locals or foreigners, while corporate shareholders may either be based in Indonesia or abroad.
The director is the person who is responsible for the general operations of the company. There must be at least one director in every PT PMA. Locals and foreigners alike may serve as the director of a PT PMA. If the person who is selected to be the director of the company is a foreigner, the director will require a work permit before taking up the role, just as is the case with any other foreigner who chooses to work in Indonesia on a long-term basis. It is also possible to utilize the services of either a local or nominee director; neither of these directors require a valid work permit in Indonesia.
Incidentally, we at Paul Hype Page & Co provide nominee directorial services to any Indonesian company which requires a nominee director. We will see to it that the person selected to serve as your company’s nominee director is one who will carry out all duties in the appropriate manner. Our fees are reasonable and affordable, so you will not have to spend excessive amounts of money when seeking our nominee director services.
Commissioners are those who oversee the directors of a company. They are tasked with holding the company’s directors accountable for their actions. Every PT PMA in Indonesia is required to have at least one commissioner. The commissioner of a PT PMA is not required to be a resident of Indonesia. Thus, the commissioner may either be a local or a foreigner.
Among all of a company’s directors and commissioners, one of each will serve as the president director and president commissioner respectively. The president director is the leader of the directors; likewise, the president commissioner is the leader of the commissioners.
Registered Business Address
Another legal requirement of all PT PMAs in Indonesia is that of the registered business address. A registered business address is necessary because it provides government and other authorities with a means by which the activities and compliance of the PT PMA can be monitored. Every business in Indonesia requires an official registered business address before its owner is allowed to conduct any business activities.
Each region of Indonesia has its own regulations with regard to the registration of a PT PMA’s business address. However, one commonality with regard to the regulations governing business addresses in Indonesia lies in the fact that all of Indonesia’s regions forbid the use of residential addresses as the official business address of a company, be it a PT PMA or any other form of company. Thus, those who are business owners may not use their place of residence as a registered business address.
The building from which the PT PMA is to conduct its business activities must also be one which possesses an appropriate building license. Any building with such a license may be used as the official office location.
Should the registered business address have to be changed at any point, the office address may be updated accordingly. However, those who do so ought to know that during the process of updating the business address, all related legal and official documents will also have to be updated in a similar manner. There are also significant costs associated with the updating of documents which contain information on the company’s registered business address.
Negative Investment List
The Indonesian government maintains the Negative Investment List which states restrictions imposed on foreign ownership in certain industries in Indonesia. Foreigners who plan to establish a business in a sector which restricts foreign ownership are to seek the assistance of a local partner in doing so. The Negative Investment List mentions that all companies in Indonesia which have at least one foreign shareholder are to be registered as PT PMA. It also completely forbids foreign ownership in some of Indonesia’s industries. All of the requirements specified in the Negative Investment List must be followed by any foreigner who has an intent to set up a PT PMA in Indonesia.
Process of PT PMA Registration in Indonesia
Of course, the most important part of setting up a PT PMA in Indonesia is that of the registration process itself. There are certain legal requirements and regulations which govern the setup of a PT PMA in Indonesia.
The first step in the process of registration of a PT PMA is that of receiving a Principle License and a Business License. These licenses are necessary for the operation of any business in Indonesia. They are to be obtained from the Indonesian Investment Coordinating Board (BKPM). The next step is that of obtaining a Deed of Establishment which has been made official by a public notary. The Deed of Establishment is to contain the Articles of Association of the company. The Ministry of Law and Human Rights will then provide legalization of the PT PMA in order to certify it as a legal entity within Indonesia. The owner of the company must then receive a Domicile Letter from the local district authorities. The company owner must then follow this with a visit to a tax office. While there, a Tax Identification Number (NPWP) and Taxable Entrepreneur Confirmation (PKP) are to be received. Another important certificate which must be received is the Company Registration Certificate (TDP); this may be received from the Agency for Integrated Licensing Services (BPPT). The final step of the process is that of receiving two reports: the Company Welfare Report and the Manpower Report. Both are to be obtained from the Ministry of Manpower. The entire process, if followed properly and legally, will take approximately 46 working days to be completed.
There are many important legal matters that are involved in the establishment of a PT PMA in Indonesia. Every foreigner who has an interest in doing so ought to take note of each of these matters. Those who are not compliant with the legal requirements will face many legal troubles and will not be able to run their business in the way which they desire. However, foreign business owners who meticulously adhere to all matters required of a PT PMA or any other business in Indonesia will find that their business activities will bring many benefits to themselves, their company, and even their employees.