Company Registration in Indonesia
Company Registration in Indonesia. There are several forms of business entity in Indonesia. The forms namely sole proprietorship, firm, CV, limited liability company (PT) and soon. Most business entities in Indonesia is in the form of a limited liability company (PT). PT is a legal entity to run a business that has capital consisting of shares. Thus, the advantages of establishing a PT such as:
- Protected by law.
- Separation assets (personal and company).
- The shareholders are liable up to the amount of their investments in the company.
- Separate legal personality from its shareholders.
- PT can hold a right over land named “Hak Guna Bangunan.
- It can be a sponsor for its foreign employees in reference to the KITAS application.
Read more: Limited Liability Company (PT)
Generally, PT can be classified into 2 types based on their investors and capitals, such as:
1. PT PMDN (Local Company).
2. PT PMA (Foreign Direct Investment Company).
PT PMDN (Local Company) in Indonesia
Domestic investment in Indonesia is an investment activity to conduct business in the territory of the Republic of Indonesia. The investment is carried out by domestic investors using domestic capital. In most cases, the domestic investment can be done in the form of a business entity such as a legal entity. However, PT PMDN is one of the common legal entities that provide you the advantages.
|Definition||An investment activity to conduct business in the territory of the Republic of Indonesia carried out by domestic investors using domestic capital. (Article 1 number 2 of Act Number 25 the Year 2007 regarding Capital Investment).|
|There is no minimum capital requirement for establishing a local company, this is according to the Government Regulation Number 29 the Year 2016 concerning The Changes of Capital Requirement of Limited Liability.|
|Possibility to engage in any business fields in the Indonesian Standard Industrial Classification in the Regulation of the Head of the Central Statistic Number 19 the year 2017, except those are listed in Appendix 1 of the Presidential Regulation No. 44 of 2016. Therefore, such business fields can be classified into two categories, namely the open business fields and the business fields conditionally open (subject to certain requirements).|
|Sponsor for KITAS||There are certain conditions for PT PMDN to eligible to be a sponsor of KITAS application. Contact us Indo-Ned Consultancy to find out the detail information.|
PT PMA (Foreign Direct Investment Company) in Indonesia
The provisions of Article 5 paragraph (2) of Act Number 25 the Year 2007 concerning Investment states that foreign investment in Indonesia is required in the form of Limited Liability Companies unless the law stipulates otherwise. More details about PT PMA, as follows:
|Definition||An activity of investing to conduct business in the territory of the Republic of Indonesia conducted by foreign investors, either by using foreign capital fully or in conjunction with domestic investors (Article 1 number 3 of Act Number 25 the Year 2007 regarding Capital Investment).|
|The minimum authorized capital requirement for PT PMA is IDR 10.000.000.000,00 (ten billion rupiahs) exclude land and building, the paid-up capital must at least 25% from the total authorized capital. Since a PMA is qualified as a large business unless determined otherwise by regulation, therefore it must implement the provisions, investment value and capital requirements to obtain an Investment Licensing.|
|PT PMA is only allowed to engage in these following business fields:
Business fields that are not listed in Negative List Investment. And, the business field which conditionally open for foreign investors with a certain percentage of foreign ownership.
|Sponsor for KITAS||Every PT PMA that has been officially registered can be a sponsor for KITAS application|
Set Up Company with Indo-Ned Consultancy
Company Registration in Indonesia is a start step to doing business in Indonesia. Looking at how Indonesia’s potential in terms of business opportunities, there is no doubt to start your business here. On the other hand, with so many areas that have great business opportunities in Indonesia, Indonesia has given its interest for entrepreneurs to invest, in both local and foreigners. As mentioned before, there are various ways for an investor to set up a business in Indonesia. It depends on the investor‘s type of business. However, we will recommend the most popular one based on our experiences, namely PT PMA and PT PMDN.
It takes 20 to 40 working days to establish a PT PMA/PMDN. However, it depends on the requirement documents.Indo-Ned Consultancy always informs you about the documents and licenses regarding Company Registration in Indonesia. Do not hesitate to contact us if you need our assistance concerning doing business in Indonesia. Let us, Indo-Ned Consultancy, assist you through every process of establishing a business entity in Indonesia. It is possible to start your own company and make your own decisions soon.
More operational permit need are: Environment Permit (UKL and UPL)
The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.