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Set Up A Local PT Company in Indonesia

PT is the most popular company type in Indonesia. In fact this type is fully intended for Indonesian only to set up a local PT company in Indonesia, but for certain situation it can be setting up for the foreign investors. For Local PT Company there is more options how to get it.

Why foreigners need to establish a local PT company in Indonesia where there are PT PMA and Representative types available?

According to the business activities, there are several business fields which are closed for foreign ownership (check the updated negative investment list to see what are the forbidden business fields for foreigners). Thus the alternative solution is foreign investors can establish a local PT company to start a business in Indonesia and set up company in Indonesia.

The general minimum requirement to establish a local PT company are as follows:

  • 2 shareholders
  • 1 local Director
  • 1 Commissioner

This type of company only allowed 100% Indonesian citizen ownership, hence you will need Local Nominee for setting up this local PT company. Local nominee company is a solution for foreign investors who want to expand the business in Indonesia but hampered by limited ownership for specific business areas.

Size of Local PT Company

To set up a local PT company you have to invest some amount of money, the range is from IDR 50,000,000 up to more than IDR 10,000,000,000. Based on the amount of paid-in capital, local PT company divided into 3 sizes:

  • • Small : above IDR 50,000,000 – 500,000,000
  • • Medium : above IDR 500,000,000 – 10,000,000,000
  • • Large : above IDR 10,000,000,000

Can a local PT company hire a foreign employee?

Yes it can. For the local nominee company (foreign ownership) the required company size is medium at least, with paid-in capital above IDR 1,100,000,000. Find out how to get business visa and work permit in Indonesia. For more information, please contact us info@indo-ned.com or feel free to book a meeting with our legal team.

The Process of Setting Up a Local PT in Indonesia

    • 1. Approval of company name at the Ministry of Law and Human Rights
    • 2. Preparation of Association Article by Notary
    • 3. Obtain Deed of Establishment at the Ministry of Law and Human Rights
    • 4. Obtain Tax payer registration number (NPWP) and VAT number at the tax office (Check out tax reporting deadlines, warnings, and recommendations in Indonesia)
    • 5. Create an account and register NIB to OSS
    • 6. Obtain location permit and environmental permit (UKL-UPL)
    • 7. Obtain Trading Business License (SIUP)

If you are not sure what type of company which is suitable for your business, feel free to contact us. Indo-Ned Consultancy will assist you to establish your business from the start in Indonesia based on your customized needs.

 

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