Limited Liability Company (PT)

Limited Liability Company (PT) is a form of legal entity which most widely used because PT has many advantages such as:

The shareholders of PT are only liable up to the amount of their investments.

1. PT is a legal entity which has a separate legal personality from its shareholder. In addition, PT can hold a right over land (Hak Guna Bangunan).
2. PT can be a sponsor for its foreign employee in reference to KITAS (resident permit) application (terms and conditions apply).

PT can be classified into 2 types based on the shareholders.

1. PT PMA (Foreign Direct Investment Company): if the PT has one or more foreign shareholders.
2. PT PMDN (Local Company): if all of the shareholders are Indonesian citizens. (Read More)

The Difference between PT PMDN (Local PT) and PT PMA

1. Definition

PT PMDN (Local PT)

Investment activities to do business in the Republic of Indonesia which are carried out by domestic investors and using domestic capital.

PT PMA

Investment activities to do a business in the Republic of Indonesia, which carries out by foreign investors, which consist of foreign capital as a whole or in cooperation with domestic investors.

2. Capital Requirement

PT DMN (Local PT)

There is no minimum capital requirement for PT PMDN (Local PT) (based on Government Regulation Number 29 the Year 2016 concerning The Changes of Capital Requirement of Limited Liability)

PT PMA

The minimum capital requirement for PT PMA is Rp. 10.000.000.000,0 (ten billion rupiahs) exclude land and building.

3. Business Field

PT PMDN (Local PT)

PT PMDN can 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. Such business fields can be classified into two categories, namely the open business fields and the business fields conditionally open (subject to certain requirements)

PT PMA

PT PMA is only allowed to engage in these following business fields.

1. Business fields that are not listed in Negative List Investment. Indonesia uses the “negative list” approach. Therefore, business fields that are not listed in Negative List Investment are 100% open for foreign investment.
2. The business field which conditionally open with a maximum percentage of foreign ownership.

4 Sponsor for KITAS

PT PMDN (Local PT)

Only PT PMDN (Local PT) who has capital minimum 10 billion rupiah eligible to be a sponsor KITAS application

PT PMA

Every PT PMA can be a sponsor for the KITAS application.

When you want to set up a company in Indonesia and start doing business in Indonesia, you need to understand the rules and regulations in Indonesia. If you have more questions or need assistance, please feel free to contact us.

Overview of Limited Liability Company (PT):

1. PT can be established by an Indonesian Citizen or Foreign Citizen in the framework of PMA.
2. The process of incorporation, amendment or dissolution of the Company shall be regulated by Law no. 40 of 2007 concerning Limited Liability Company.
3. Any incorporation and amendment of the Articles of Association of Limited Liability Company shall obtain the Legalization of the Minister of Law and Human Rights of the Republic of Indonesia.
4. A PT must be established by (minimum) 2 shareholders.
5. A PT must have at least one director and one commissioner (the shareholders can be a director/ commissioner).
6. The shares in a PT can be owned by a foreigner (PT PMA), Indonesian citizen (PT PMDN), or state at the central or local level (BUMN or BUMD).
7. According to Government Regulation No. 29 of 2016, there is no minimum requirement of capital for a PT. Consequently, the founders of a PT are free to determine the total capital of their company. However, there is an exemption for PT PMA which subject to a minimum capital requirement of 10 Billion Rupiah (Article 12 (3) of Perka BKPM No. 13 of 2017).
8. The highest decision shall be within the resolution of the General Meeting of Shareholders.

Company qualification based on SIUP

1. Large Company is a company that has a Capital or Net Wealth excluding the investment in land and buildings or paid-up capital in the Deed of Establishment / Amendment above Rp. 500.000.000 (five hundred million rupiahs)
2. Medium Enterprise is a company that has Capital or Net Wealth outside of investment of land and building or paid-up capital in Deed of Establishment / Perubahaanya Rp. 200,000,000 (two hundred million rupiahs) to Rp. 500.000.000 (five hundred million rupiahs)
3. Small Company is a company that has Capital or Net Wealth outside of investment of land and building or paid-up capital in Deed of Establishment / Amendment up to Rp 200,000,000 (two hundred million)

Process of establishing a Limited Liability Company

1. Company name Registration

Provide 3 options for the company name (in case the name has been used by other parties

2. Deed of Establishment and its Legalization by Minister Decree

Provided that the required documents and information are completed

3. Registration at OSS to get NIB

Provided that the required documents and information are completed

4. Application for Company Domicile Certificate

Provided that the required documents and information are completed. Depend on the local authorities

5. Application for NPWP (tax identification number)

Provided that the required documents and information are completed.

6. Application for a business license

The process depends on the availability of the required licenses. Before applying for a business license, the company must have a Location license, environmental license, and building construction permit license.

7. Application for operational/ commercial license

Provided that the required documents are completed.

When you want to set up a company in Indonesia and start doing business in Indonesia, you need to understand the rules and regulations in Indonesia. If you have more questions or need assistance, please feel free to contact us.

The requirement to establish a Limited Liability Company

For Foreigners partner:

1. Copy International valid passport
2. Resident address and telephone in the country of origin and email
3. Resident address in Indonesia
4. Curriculum Vitae ( CV)
5. Pas Photo 3×4 = 4 pcs ( with colour)

For Local Partner:

1. Copy of Citizen Identity Card (KTP)
2. Personal tax-payer code number (NPWP Pribadi)
3. Curriculum Vitae (CV)
4. Pas Photo 3×4 = 4 pcs (with colour)

For Company Domicile:

1. Copy of lease agreement between you and the land/building owner;
2. Copy of Building Construction Permits;
3. Copy of proof of payment Land and Building Tax last few years;
4. Copy of Land Certificate; 5. Copy of ID Card of the Land Owner.

For Company:

1. Chart of Company Management Structure;
2. Flowchart of the business/business plan.

Capital Establishment Limited Liability Company (PT)

Pursuant to Law Number 40 the Year 2007 concerning Limited Liability Company (“UUPT”), the minimum capital requirement of PT is Rp 50 million. 25% of the authorized capital of the company must be incorporated as paid-up capital. This requirement is often an obstacle for those who want to establish a PT with the mediocre capital government then issued a new rule where the amount of authorized capital for the establishment of PT depends on the agreement of its founders. It is mentioned in Government Regulation No. 29 of 2016 concerning Changes in Authorized Capital of Limited Liability Company (“PP 29/2016”).To learn more about the capital and other requirements to establish this PT can be found at the following link.

 

When you want to set up a company in Indonesia and start doing business in Indonesia, you need to understand the rules and regulations in Indonesia. If you have more questions or need assistance, please feel free to contact us.