A local PT company is a limited liability company established according to the laws of Indonesia. For a local PT company, only Indonesian citizens and Indonesian legal entities are allowed to hold shares as registered shareholders.
Benefits of Local PT Company in Indonesia
Local PT companies are one of the most common and well-known company types in Indonesia because of the benefits tied to them. Some of these advantages include:
1. Lower paid-up capital requirement
Compared to a PT PMA company, a PT company requires a much lower paid-up capital. Depending on the scale of your business, the minimum investment value ranges from IDR 50 million to IDR 10 billion. For PT PMA companies, it stands at IDR 10 billion.
Size of Business Entity
Minimum Investment Value
IDR 50 million
IDR 500 million
IDR 10 billion
2. Holding multiple business licenses without needing to commit additional paid-up capital
As a local nominee structure, the company can have three main business activities without forking out additional paid-up capital for the other businesses. The only cost incurred for the maintenance of the local PT company, such as recuring annual fees.
3. Ability for funding
With a local PT company, you can easily secure additional fundings and capital through various means such as by issuing new shares.
4. Wider range of business opportunities
In Indonesia, there are certain business activities that are restricted under the new positive investment list, which replaces the negative investment list. Local PT companies do not have such restrictions and have a wider range of business activities to choose from, as compared to a PT PMA company.
FUN FACT: Did you know that the new positive investment list has 46 restricted business activities for foreign investors? This has been significantly reduced from the 350 in the previous negative investment list.
Requirements to Set Up a Local PT Company in Indonesia
Before registering a local PT company, do make sure that you are able to fulfill these requirements below, else your company registration will not be successful.
2 local shareholders
Able to meet the minimum projected investment value, depending on the scale of your business
Registered business address
NOTE: For registered business address, you are allowed to use a virtual office address.
How to Incorporate a Local PT Company as a Foreigner
To reap the benefits of a local PT company as a foreigner, a local nominee arrangement is required. This means that the company will be set up by a local nominee director, and the local nominee director will have full legal ownership of the company.
The way you as a foreigner can gain control of a local PT company in Indonesia is by setting up the company’s bank account in Indonesia. While you will not have the legal ownership of the company, you can still take control of the company’s funds from managing the bank account and transactions.
RECOMMENDATION: If you plan to incorporate a local PT company as a foreigner under this arrangement, it is best to engage a trusted local nominee company or director. Here at Paul Hype Page, we can provide you with a local nominee company service.
For those who are not comfortable with letting another individual or entity to have full legal ownership of your company, you can consider setting up a PT PMA company instead.
Documents Required for Incorporation of a Local PT Company
There are certain documents that you will need to provide and prepare for your company registration in Indonesia. These documents are listed below.
Power of Attorney for submission document signed by each shareholder
Rental agreement between the company & building management
Original building domicile/statement from the building management
Building & land tax receipt (PBB) including the payment approval of current year
IMB or certificate of ownership if the building is owned
Statement for lease (if any)
Min. 3 office photos – reception, signage of company & office room with business activity
Statement of domicile issued by the company & acknowledged by the building management
Company letterhead & copy or sample design of the company stamp
Copy of Article of Association and its amendment – in English or Bahasa Indonesia
Business registration certificate
Board of Directors structure
Personal Documents – Directors & Commissioners
Foreigner: Copy of coloured passport with a min. 18 months validity and 4 blank pages
Local: ID card (KTP & Taxpayer Identity Number)
Family card (KK)
Indonesia visa stamp
Residence of hotel or apartment domicile letter for the director
Recent passport-sized photo with red background for each Board of Director
A representative office is a type of business entity that foreign companies set up to conduct research as they have interest in exploring potential business opportunities before making a decision to set up a permanent office. It does not have a legal status, and cannot engage in trading or any business activities that generate income. However, it can conduct marketing and promotional activities.
What is the Positive and Negative Investment List?Tommy2021-10-20T09:46:38+08:00
Articles of association form a document that specifies the regulations for a company’s operations and defines the company’s purpose. The document lays out how tasks are to be accomplished within the organisation, including the process for appointing directors and the handling of financial records.
What is a nominee director?Tommy2021-10-20T09:45:37+08:00
A nominee director is a person appointed to represent the interests of another group or person. For instance, a nominee director may be appointed to sit in a board by a substantial shareholder or a special class of shareholders.