Requirements and Process for Registering a Company in Indonesia
3 min read
Indonesia provides one of the most dynamic and promising economies in SouthEast Asia. The country is in a transition process- from being an underdog to one of the biggest economies in the world. Even if the nation still has its share of problems, the government is being quick to bring reforms and has succeeded in creating a business environment, which has attracted investors from all around the world. In this article, we are going to take you through the business registration process of an Indonesian Company.
Choosing the Legal Entity
The first step is choosing the type of company. You can choose between Local Company, Foreign Direct Investment Company (Limited Liability Company), and Representative Office.
Local Company (PT)
A Local company allows only 100% local ownership. However, a foreigner can still be a part of the local company with a local nominee arrangement. The thing is that local companies allow you to operate in more sectors than other companies, so some foreigners still choose this type of company even if a foreign-owned company is available.
A local company needs at least two shareholders, one director, and one commissioner. All of the shareholders need to be local.
Foreign-Owned Company (PT PMA)
Foreign-owned limited liability company, or PT PMA, is wholly owned by foreigners. However, the maximum foreign ownership depends on the sector, activities, and the nature of business. There is a list called the Negative Investment List, which lists the restrictions of doing business in Indonesia by foreign-owned companies.
To start a foreign-owned company, you need a minimum of two shareholders, one director, and one commissioner. All the shareholders can be foreigners, as long as there is a local representative as a director or a commissioner.
The minimum investment for opening a foreign-owned company is IDR 10 billion.
Representative Office
The Representative Office is the first step taken by many companies to enter the Indonesian market. A representative office is mostly for research, or for marketing activity, prior to the establishment of PT PMA. A representative office is easy to open, as it is not meant for any business transactions, so you don’t need to register for taxes or such.
Settle on a Company Name
Company name needs to be at least three words. However, you can later apply for a different brand name. Like elsewhere in the world, the Indonesian government is very strict when it comes to company names. The name that you give can’t be vulgar, nor be deemed inappropriate or demeaning in any way. Furthermore, you are legally prohibited from using a name that is similar to other businesses.
Get all The Documents
The next step is to accumulate the documents.You can talk to your company incorporation Indonesia services.
- Copy of a Valid Passport minimum 18 month from expiry date for a foreign shareholder, director or a commissioner.
- Copy of a Valid KTP/ Personal ID (Indonesian) & NPWP (Taxpayer ID) for a local shareholder, director, or a commissioner.
- Copy of the registration document if the shareholder is a company. It would help if you also had shareholding company’s director’s particulars (KTP/Personal ID or a valid passport)
- If there is a plan to buy office space you need lease agreement or deed of sales and purchase
- Company Address information; local companies, can have a virtual address, but foreign companies require a physical address.
Register Your Company
It takes around 1.5 months to register a company in Indonesia that is around 1.5 months of stress and moving between offices. So, you must hire a registration service provider if you don’t want to worry. They will register your company at the lowest cost and time.
