A foreign entity may choose to make a foreign direct investment (FDI) into another country. FDI is invested by an investor who is involved in foreign business operations or acquires business assets in another country. Many developing countries are seen as global FDI hubs; many such countries, of which Indonesia is one, are located in Southeast Asia. Many FDI companies are eyeing Indonesia because it has become one of the world’s leading emerging markets.
How to Establish a Foreign Direct Investment Company in Indonesia
To establish a foreign direct investment company in Indonesia, the first step which must be taken is that of the registration. This is done through the establishment of a limited liability company. In Indonesia, such a company is known as a Perseroan Terbatas (PT). Before a PT can be established, those who are starting the company must obtain a Deed of Establishment as well as approval from the Minister of Law and Human Rights.
The next step to be taken is that of receiving a taxpayer number, also known as Nomor Pokok Wajib Pajak (NPWP), from the authorities. An NPWP is necessary to operate one’s foreign direct investment company in Indonesia. After receiving an NPWP, two certificates are then required; a certificate of domicile and a company registration certificate. At this point, it is possible to receive a permanent business license. However, if the FDI company in question is yet to submit all of the required investment-related document, it is possible for the company to obtain a temporary business license which will be valid for one year.