Being the biggest archipelago in the world and with its economy constantly growing, Indonesia is deeming to be one of the best countries to invest in as a foreign entrepreneur. Nevertheless, before commencing on a business venture in a new market, it would be nerve-racking to inject a big sum and jump straight into a country in which you are unfamiliar with. Therefore, it is crucial to have the knowledge about the company formation and business structures in Indonesia.
In this Article, we will guide foreign investors in regards to foreign business setup in Indonesia.
What is an Offshore Company
Offshore companies carry out the same type of business as a locally incorporated company and the liability of its shareholders is generally limited to the amount of capital they have invested into the company, and they both will essentially be a private limited company. However, this will be known as an international business
Basically, an offshore shows that the management and control of the company is not in Indonesia, means that there is no one running the company in Indonesia, yet it still a Indonesia company.
However, the difference that an offshore company identify themselves is with the company’s incorporation by jurisdiction.
What we mean is, a locally incorporated company will go through the usual process of a Indonesia company incorporation. Whilst an offshore business goes through the same process, the only different is the offshore company will be incorporated by a local nominee director.
For foreign companies who is setting up an offshore company in Indonesia, and do not wish to relocate, will also opt for the offshore company incorporation option.
Basically, you can incorporate an offshore company in Indonesia, case in which you will not need any work passes or work visa. However, you will not be able to live in Indonesia for extended periods of time.
Incorporation with Nominee Director
What is a nominee director? It is an individual who is appointed to represent the interests of another group or person or company.
As the name suggests, in this context, a nominee director helps foreign individual or investors for an Indonesia Company Incorporation, and they function as the director of a company for meeting the legal requirement to own a local director. Due to the functions, a nominee director acts passively and lacks some power in the company.
Indonesia Offshore Company Registration Requirement
If you do decide to incorporate an offshore company in Indonesia, you should know certain things prior to the incorporation.
Indonesia has two business entities open to foreigners: foreign investment limited liability company (PT PMA) and Representative office (KPPA).
A PT PMA company or also known as Perseroan Terbatas Penanaman Modal Asing in Bahasa Indonesia is ideal for companies who want to engage in commercial activities in Indonesia. While foreign investors who seek to engage in market research, networking or feasibility studies, opting for a representative office is the ideal business presence.
However, do note that foreign investors would also be required to comply with the Negative Investment List laid down by the Indonesian government.
A KPPA company or also commonly known as Kantor Perwakilan Perusahaan Asing (KPPA) in Bahasa Indonesia allows foreign investors to create a market presence in Indonesia and similar to PT PMA, a KPPA is usually set up for management reasons. However, its roles are limited to managing, coordinating, supervising, liaising, and representing the main company.
Why Chose Paul Hype Page & Co
Lastly, do keep in mind the fact that although it is quite easy to obtain the permit to incorporate an offshore company in Indonesia, and according to the Indonesia Company Law, a foreigner is forbidden to do it without the assistance of a professional agency.
Make sure you work with the best – Paul Hype Page & Co – and that you deliver all the necessary incorporation documents for them to make this process fast and easy.
Paul Hype Page & Co. will give you more information and assistance on policy updates, compliance regulations and changes to tax conditions. Corporate tax in Indonesia.
Our team of seasoned professional can also help you set up a company in Indonesia very quickly and easily following all legal entities, and offer you sound advice on how to make it successful too.
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Here, you will find detailed information about Indonesia’s Corporate Tax System. Paul Hype Page & Co helps companies with strategic tax planning, tax advisory, and accountancy services.
- Indonesia Tax Planning
- International Tax Planning
DPJ (Directorate General of Taxes) governs Indonesia’s tax system, helps develop a stronger economy, better environment and a more vibrant economy. All companies, regardless of industry, have a legal duty to pay taxes.
Indonesia attracts investments from around the world by reducing its corporate income tax rate and introducing different tax incentives. Indonesia has one of the lowest corporate tax rates in the world.
As your company’s Tax agent, Paul Hype Page & Co Chartered Accountant will be fully responsible for the practice of ensuring that these conditions are met. It is important that we be highly qualified and well versed in local regulations and corporate laws, as we are responsible for the upkeep of important company files, tax reports and tax records.