Company Registration
Why Indonesia?
Indonesia is the largest economy in Southeast Asia and home to the fourth largest population in the world. More than half of its population resides in urbanized areas and this, coupled with its burgeoning middle class and young population, ensures a robust consumer market with growing purchasing power. As one of the MINT nations, Indonesia follows closely behind the BRICs, promising a multitude of investment prospects due to its strategic geographical location.
There are several factors that make Indonesia an appealing investment choice; its strong economy, political stability, growing domestic market, abundant natural resources and engagement in global affairs as Southeast Asia's only member of the G-20. Moreover, the government of Indonesia actively encourages foreign investment through deregulations and incentives. With a projected average GDP growth of 5.2% per year over the next five years, Indonesia is poised for economic success.
Investing in a foreign country is exciting, but it may bring up doubts or feelings of uncertainty. That's why we are here to provide you with the necessary knowledge and guidance to help you turn your business ideas into a reality. With our expertise and comprehensive support, we ensure that the process of setting up a company and investing in Indonesia is as smooth as it possibly can be.
Starting a Company in Indonesia
If you’re looking to seize the opportunities Indonesia has to offer by operating a business in Indonesia, setting up a PT PMA is essential. First, let's clarify a few terms. PT is the Indonesian term for a limited liability company, while PT LOCAL refers to a company solely owned by Indonesian shareholders.
On the other hand, a PT PMA (Penanaman Modal Asing) is a limited liability company with direct foreign investment ranging from 1-99% ownership. This means that even if a foreign entity owns just 1% of the company, it will still be considered a PT PMA. Shareholders within a PT PMA can be individuals or foreign companies. This type of company is classified as a ‘Major/Large Business’ by the government, due to the capital requirements, which must be over IDR 10 billion (approximately $650,000). The capital requirements are somewhat flexible in the sense that you do not need to invest the whole sum of capital at once.
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1. Legal Status: Obtain a KITAS and reside in Indonesia legally.
2. Business Freedom: Legally run your business and earn income in Indonesia without restrictions.
3. Asset Security: Easily purchase and protect valuable assets like homes, vehicles and more.
4. Tax Advantages: Benefit from lower tax rates for new businesses.
2. Business Freedom: Legally run your business and earn income in Indonesia without restrictions.
3. Asset Security: Easily purchase and protect valuable assets like homes, vehicles and more.
4. Tax Advantages: Benefit from lower tax rates for new businesses.
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1. Tax Compliance: Pay monthly and annual corporate taxes.
2. Financial Integrity: Maintain accurate bookkeeping and accounting practices.
3. Reporting Requirement: File quarterly LKPM Investment Activity Reports.
4. Support Locals: The employment of Indonesian nationals is highly encouraged.
5. Cultural Sensitivity: Show respect for local customs and culture.
6. Regulatory Adherence: Follow Indonesian regulations.
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Different business classifications in Indonesia have varying regulations to follow. For certain industries, such as real estate, events, restaurants and fitness centers, 100% foreign ownership is allowed. However, in other fields, a foreign entity must partner with an Indonesian investor.
For example, in the construction business, a foreign entity can own a maximum of 67-70% of the shares, with the remaining shares owned by an Indonesian partner. If you need clarification about the requirements of your industry or whether your selected business type can be owned entirely by a foreign entity, please feel free to reach out to us! We would be more than happy to give you more information.
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The process of registering a PT PMA involves several steps which will be explained in more detail below. First, the company is incorporated in cooperation with a public notary and registered with the Ministry of Law and Human Rights. This is followed by registration with the Tax Directorate General and the Online Single Submission (OSS) system to obtain the necessary business licensing.
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• A minimum of two shareholders.
• A company name (consisting of at least three words, with each word being at least three letters long) which does not include the words ‘holdings,’ ‘limited,’ ‘corporation,’ ‘company,’ or ‘ltd.’
• Valid passport photos of the shareholders with at least 30 months of validity (if shareholders plan to obtain Investor KITAS).
• The PT PMA shares must have a minimum valuation of IDR 10 billion.
• A company office address, an Indonesian mobile number and a selected business field(s).
Setting up a PT PMA with Bali Solve is a smooth process.
In Phase 1, which takes an estimated 2-5 business days, we will help you draft the company deeds (AKTA) and select the shareholders. These shareholders will appoint a Director to represent the company and perform legal activities, and a Commissioner who will act as an advisor or supervisor of the company. Please note that the Director and Commissioner can’t be the same individual and that no shareholder can own 100% of the shares.
At this stage, you will also need to provide the office lease agreement, a digital map pin of the office location or, alternatively, sign-up for a virtual office address service with Bali Solve, and define your intended business operations so our team can assist you in selecting the appropriate business licenses (KBLIs).
Once these steps are completed, you may sign the company deeds with a public notary either in person at our Bali Solve office or remotely with a Power of Attorney. The company deeds and certificates/approval from the Ministry of Law and Human Rights will then be issued.
In Phase 2, we will complete the PT PMA registration with the OSS (Online Single Submission) system to obtain the electronic business licensing. This usually takes between 1-6 business days.
In Phase 3, after another 1-2 business days, it’s time to celebrate because your PT PMA will have been successfully registered!
Register in 10 Steps
Starting Off On The Right Foot
At Bali Solve, we go the extra mile to support your PT PMA setup. We offer assistance in opening corporate and personal bank accounts, provide two hours of free business consultation, help with accounting and tax strategy and assist in setting up a PT PMA immigration account online.
We bring much more to the table than just visa or company set up services – members of our team, including our founder, are seasoned business professionals who possess extensive experience and a well-established network in Indonesia. We have personally experienced the challenges and triumphs of investing in Indonesia and with this insider perspective, we will be able to help you avoid common pitfalls along the way.
The success of your business venture relies not only on company structuring but also on accounting, tax strategy and visa/KITAS processes. As such, we provide a comprehensive A to Z service for setting up a company in Indonesia. Our help with structuring your company in a way that maximizes tax benefits and cost-effectiveness will provide you with a holistic solution that sets your business up for success from day one.
We pride ourselves on providing excellent service which means our office doors are always open for existing and prospective clients. If you have any queries at all or need a follow-up consultation even after your company is set up, then please don’t hesitate to reach out, we are always happy to help.