Many people who are interested in starting a company in Indonesia choose to set up a PT. This business entity is a viable option because of the relatively few barriers with regard to its setup. As long as all the incorporation criteria are fulfilled, one can easily own and run such a company.
One of the most well-known company types in Indonesia is the local company, which is also known as a PT. It is commonly used by local entrepreneurs but may also be used by foreign investors.
Many business owners in Indonesia choose to establish a PT because owners of a PT are allowed to conduct any business activity of their choice. There is also no obligation to produce a large initial capital investment. On the other hand, those who own a foreign company (PMA) might not be legally permitted to conduct certain business activities. They must also produce a large initial minimum investment.
A local PT (Perseroan Terbatas) company is a limited liability company established according to the laws of Indonesia. In a local PT, only Indonesian citizens and Indonesian legal entities are allowed to hold shares as registered shareholders. Local PT companies have several features that separate them from other business entities.
(Total time required: approximately 39 days)
The following is the registration process for a local PT company:
|1||Application for company’s name at Indonesia’s Ministry of Law and Human Rights||1|
|2||Preparation of Article of Association from public notary||3|
|3||Approval of Deed of Establishment at Indonesia’s Ministry of Law and Human Rights||3|
|4||Acquisition of Certificate of Domicile from local government||10|
|5||Obtaining of Taxpayer Registration Number (NPWP)||2|
|6||Obtaining of Trading Business License (SIUP)||10|
|7||Obtaining of Company Registration Certificate (TDP)||10|
Every local PT company must be completely owned by Indonesian citizens. Foreigners who plan to own a PT will therefore need a local nominee director who has a notarized nominee agreement. Through the use of a local nominee director, the foreigner may retain complete ownership of the PT. In this way, the foreigner may own and run the local PT company so that they are able to expand their business in Indonesia without being constrained by ownership limits in certain business areas.
The minimum requirements to establish a local PT company include two shareholders, one director, and one commissioner.
The required amount of paid-up capital is dependent on the size of the company. Small companies require between 50 million and 500 million rupiah, medium-sized companies require between 500 million and 10 billion rupiah, and large companies require more than 10 million rupiah. PTs which plan to hire foreigners must be medium-sized companies and have a paid-up capital of 1.1 billion rupiah.
Local Company (PT) FAQs
In Indonesia, the NPWP is given to all taxpayers in the country. It is a number which serves as a form of taxpayer identification. It allows the government to keep track of taxpayers and their payment of income tax.
A nominee director is a person who is tasked with representing a certain company’s interests through the running of the company. The use of a nominee director helps foreigners bypass the requirement of local ownership of a PT.
The amount of paid-up capital to be paid depends on the size of the PT. The amount to be paid must fall within a fixed range. Therefore, there is no way to bypass these requirements.