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.
Information about PTs
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.
Local PT Company Registration Process
(Total time required: approximately 39 days)
The following is the registration process for a local PT company:
Duration (working days)
Application for company’s name at Indonesia’s Ministry of Law and Human Rights
Preparation of Article of Association from public notary
Approval of Deed of Establishment at Indonesia’s Ministry of Law and Human Rights
Acquisition of Certificate of Domicile from local government
Obtaining of Taxpayer Registration Number (NPWP)
Obtaining of Trading Business License (SIUP)
Obtaining of Company Registration Certificate (TDP)
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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
What is a Taxpayer Registration Number (NPWP)?Tiwi2020-03-24T16:42:41+08:00
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.
What is a Nominee Director?Tiwi2020-03-24T16:41:43+08:00
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.
Is there any way to bypass the paid-up capital requirements imposed on PTs?Tiwi2020-03-24T16:40:13+08:00