Company Registration in Indonesia- An Overview

Aspect Details
Timeline for Company Registration in Indonesia The timeline for company registration in Indonesia is 2 to 3 Weeks
Fees for Indonesia Company Formation The fees for Indonesia company formation start from $3000
Benefits of Business Registration in Indonesia Given below are the significant benefits of business registration in Indonesia-
  • Thriving Economy
  • Hassle-Free Onboarding and Registration
  • Ample Skilled Manpower
  • Minimal Regulations
  • Ample Capital Availability
  • Ease of Doing Business
  • Free Trade Agreements
  • Double Tax Avoidance Agreements
  • Foreigners Can Own Land
Types of Structures for Business Registration in Indonesia
  • Limited Liability Company (PT PMA)
  • Representative Office (KPPA)
  • Foreign Trade Representative Company (KP3A)
  • Foreign Oil and Gas Representative Office (KPPA MIGAS)
  • Foreign Construction Services Representative Office (BUJKA)
Requirements of Company Incorporation in Indonesia
  • Minimum investment: IDR 1 billion (25% as initial share capital).
  • Minimum paid-up capital IDR 10 billion (USD$700,000),
  • At least 2 shareholders, 1 director, and 1 commissioner (can be foreign).
  • Corporate tax: 22%.
  • Dividend tax: 0% (residents), 20% (non-residents, unless treaty applies).
  • VAT: 11%.
  • Annual general meeting required.
Documents Required for Company Registration in Indonesia Have a look at the documents required for company registration in Indonesia-
  • A copy of the deed of establishment
  • A copy of the director's identification card
  • A copy of the passport
  • A copy of the rental agreement or lease of the business office
  • A domicile letter from the concerned government where the company is located
  • A photograph of the director(s)
  • Power of Attorney (Signed by each shareholder)
  • Company letterhead & copy or sample design of the company stamp.
  • Business registration certificate
  • Board of Director structure
Procedure for Company Registration in Indonesia Given below is the stepwise guide to apply for company registration in Indonesia-
  • Choosing a Company Name
  • Drafting Documents
  • Depositing Share Capital
  • Appointment of Company Officers
  • Choosing a Registered Address
  • Preparation of MoA and AoA
  • Obtaining a Business License
How can we help you with Company Formation in Indonesia? At Enterslice, we provide an effortless Indonesia company formation for non-residents:
  • Hassle-Free Indonesia Company Formation for Non-Residents
  • Guided Expertise for Smooth Business Setup in Indonesia
  • Complete Solutions for Non-Resident Entrepreneurs
  • Simplified Business Registration with End-to-End Support
  • Efficient Company Incorporation Process for International Clients
  • Support in Demystifying the Indonesia Business Register Process

Simplify Company Registration in Indonesia with Us

Get your company registration in Indonesia done easily and smoothly.

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Understanding Company Formation in Indonesia

Indonesia is the fourth most populous country in the world, located in Southeast Asia, and is made up of over 17,000 islands. Known for attracting tourists from around the world, Indonesia has also evolved into a vibrant democracy with the largest and most dynamic economy in Southeast Asia. Company formation in Indonesia is an excellent choice for global entrepreneurs.

For businesses looking to expand internationally, company registration in Indonesia offers significant growth potential and opportunities for long-term commitments. With a growing economy and supportive business environment, registering a company in Indonesia opens doors to a diverse and expanding market. Additionally, as a member of the G20, Indonesia presents foreign investors with substantial growth prospects. Foreign investors consider Indonesia a hotbed for investment because of the reasons given below:

Diversify Presence in Asia

Access the ASEAN and South Asia Markets

Supplement their China Operations

Attractive Free Trade Agreement and Business Incentives

100% Reduction in CIT (Investments are Conducted in SEZ)

11% VAT- Standard Rate

Types of Structures for Business Registration in Indonesia

The types of structures for Business Registration in Indonesia are as follows:

Limited Liability Company

Limited Liability Company (PT PMA- Perseroan Terbatas Penanaman Modal Asing)

A foreign owned LLCs is a foreign investment company with foreign investors holding most of its shares. It allows foreign entrepreneurs to operate without local partnerships. Therefore, PT PMAs (Penanaman Modal Asing) allow 100% foreign ownership in a contract to Perseroan Terbatas (PTs), which require some degree of local ownership.

Representative Office

Representative Office (KPPA- Kantor Perwakilan Perusahaan Asing)

A representative office is a business structure model that does not require shareholders or directors and can be solely managed by one chief executive. They are designed for representative purposes and prohibited from engaging in revenue-generating activities.

Foreign Trade Representative Company

Foreign Trade Representative Company (KP3A- Kantor Perwakilan Perusahaan Perdagangan Asing)

A Foreign Trade Representative Company, often referred to as KP3A (Kantor Perwakilan Perusahaan Perdagangan Asing), is a form of entity for company registration in Indonesia. It is a foreign company established by a foreign company to promote and market its products within Indonesia without indulging in sales transactions.

Foreign Oil and Gas Representative Office

Foreign Oil and Gas Representative Office (KPPA MIGAS- Kantor Perwakilan Perusahaan Asing MIGAS)

It is a legal entity formed by a foreign oil and gas company in Indonesia. It is one of the business entities for company registration in Indonesia that focuses on market research, networking, and exploring business opportunities in the Indonesian oil and gas industry. It is one of the business structures for company formation in Indonesia.

Foreign Construction Services Representative Office

Foreign Construction Services Representative Office (BUJKA)

It is a type of representative office established by a foreign construction company. With its registration, businesses can operate as well as manage their construction-related activities within the country. It cannot directly undertake construction projects on its own. It can collaborate with a local Indonesian construction company to execute projects.

Legal Framework for Company Registration in Indonesia

The list of legal frameworks for company registration in Indonesia is as follows:

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  • Government Regulation Number 24 of 2018
  • Company Law (Law No. 40 of 2007)
  • Investment Law (Law No. 25 of 2007)
  • Ministry of Law and Human Rights Regulation
  • Indonesian Tax Law
  • Labor Law (Law No. 13 of 2003)
  • Public Notary Regulations
  • Regional Regulations
  • Free Trade Agreement & Double Taxation Agreements
  • Foreign Investment Regulations

Benefits of Business Registration in Indonesia

Here, given below are the lists of benefits of business registration in Indonesia:

Thriving Economy

Indonesia has been on an impressive growth trajectory, with most business sectors experiencing consistent and significant expansion. According to Standard Chartered Bank, Indonesia is projected to become a $10 trillion economy by 2025. It is one of the significant benefits of business registration in Indonesia.

Hassle-Free Onboarding and Registration

Unlike many other countries where business formation is complex, Indonesia offers a transparent and trade-friendly environment for business registration. The process is designed to be hassle-free for overseas businesses, with minimal legal formalities, making it an attractive destination for entrepreneurs.

Ample Skilled Manpower

Indonesia is home to over 144 million workforces, and the cost of acquiring the same is comparatively lower than other nations, with most of them serving the agriculture sector, retail, and manufacturing. It is one of the substantial benefits of company registration in Indonesia.

Minimal Regulations

Company formation in Indonesia does not necessarily attract dozens of legalities, unlike in other countries. Therefore, businesses seeking registration will experience minimal legal hurdles to keep business running in Indonesia.

Ample Capital Availability

Both foreign and local businesses in Indonesia have equal access to funding opportunities from several banking institutions and lending avenues. It is one of the incredible benefits of company registration in Indonesia that keep the business enthusiasts hooked.

Ease of doing business

The government of Indonesia has consistently put an effort to ease the business environment by improving the EODB (Ease of Doing Business). It is one of the key benefits of business registration in Indonesia.

Free Trade Agreements

Indonesia is an esteemed member of ASEAN (Association of Southeast Asia) and has sanctioned several free trade agreements with different countries across the globe. Thus, simplifying cross-border trade with less regulatory burden.

Double Tax Avoidance Agreements

Indonesia has also signed double tax agreements (DTAs) with various nations, including the United States, China, Australia, India, Canada, etc. Thus, waiving the extra trade burdens with such countries on transactions of goods.

Foreigners can Own Land

Foreign investors in Indonesia can legally own land and invest in real estate assets. However, there exist three distinct property ownerships, each characterized as the right to construct, the right to cultivate, and the right to use.

Process of Company Formation in Indonesia

Have a look at the stepwise guide for company formation in Indonesia-

Business Name Reservation with MOLHR

Our experts at Enterslice will help you reserve a unique business name with the Ministry of Law and Human Rights (MOLHR).

Prepare the Deed of Establishment

On your behalf, our local experts will prepare the Deed of Establishment. It includes business activity, Articles of Association, and shareholder information.

Application Submission to MOLHR

Our expert consultants will assist you with the submission of the Deed of Establishment to the Ministry of Law and Human Rights (MOLHR).

Review of the Company’s Founding Documents

The Ministry of Law and Human Rights (MOLHR) will review the founding documents of the company.

Issuance of Registration Certificate by MOLHR

Post evaluation and review, The Ministry of Law and Human Rights (MOLHR) will issue the company registration certificate.

Get the Tax Identification Number (NPWP)

Upon business setup, you need to register for a Tax Identification Number (NPWP) with the Directorate General of Taxes.

Apply for NIB through OSS (One Single Submission)

Our consultants will assist you in applying for the Business Registration Number (NIB) through OSS (One Single Submission).

Documents Required for Company Registration in Indonesia

The list of documents required for company registration in Indonesia is as follows:

A copy of the deed of establishment

A copy of the director's identification card

A copy of the passport

A copy of the rental agreement or lease of the business office

A domicile letter from the concerned government where the company is located

A photograph of the director(s)

Power of Attorney (Signed by each shareholder)

Company letterhead & copy or sample design of the company stamp.

Business registration certificate

Board of Director structure

Timeline for Company Incorporation in Indonesia

Have a look at the timeline for company incorporation in Indonesia-

Approval of Company Name

It takes around 1 day to get the approval for the company name.

Document Preparation

The document preparation usually takes around 2 to 3 days.

Document Submission

The document submission takes around 3 to 5 days.

Ratification from MOLHR

The Ministry of Law and Human Rights ratified it in 1 day.

Certificate Issuance from MOLHR

  • The MOLHR issues the certificate in 2 to 3 days.
  • Tax Card- Securing a Tax Card takes around 1 to 7 days.

NIB and Commercial License

Acquisition of NIB and Commercial License takes around 4 to 8 days.

Corporate Tax Rate for Company Registration in Indonesia

The corporate tax rate for company registration in Indonesia is as follows:

  • The standard corporate income tax in Indonesia is 25%.
  • Public companies owned by the state in proportion of 40% are subject to a 20% tax rate.
  • Small companies with an annual income of up to 50 billion Rp benefit from 50% of the standard corporate tax.
  • Companies with an annual income of up to 48 billion Rp benefit from a tax rate of 1%.
  • The standard VAT (Value Added Tax) rate is 11%.
  • 100% Reduction in CIT (In case, Investments are Conducted in SEZ)

Requirements for Company Incorporation in Indonesia

The requirements for company incorporation in Indonesia are as follows:

  • Minimum investment starts at IDR 10 billion (USD$700,000), with at least 25% deposited as initial share capital.
  • A minimum of two shareholders is required.
  • At least one director and commissioner are mandatory (the commissioner can be a foreign citizen).
  • Companies must conduct an annual general meeting to meet compliance requirements.
  • Local registered address (must be commercial building)

Profitable Industries for Company Formation in Indonesia

Have a look at the profitable industries for company formation in Indonesia-

  • E-commerce
  • Travel and Tourism
  • Infrastructure and Construction
  • Aviation
  • Mining
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Why Opt for Enterslice for Company Formation in Indonesia?

Given below are the reasons why Enterslice is the first choice for company formation in Indonesia-

  • 10+ Years of Expertise in Company Formation in Indonesia
  • In-depth Understanding of Indonesian Laws and Regulations
  • 99% Success Rate in Company Registration in Indonesia
  • Supported the Dream of 500+ Entrepreneurs with Online Company Setup in Indonesia
  • 120+ Local Partners to Empower your Business in Indonesia
  • Documentation Support to Help You Register Company in Indonesia
  • End-to-end Assistance for Company Registration in Indonesia
  • 24/7 Availability of Consultants for Online Company Setup in Indonesia
  • Good Coordination with Indonesia’s Investment Coordinating Board (BKPM)
  • Guidance in Indonesia Company Register Process

FAQs for Company Incorporation in Indonesia

Yes, foreigners can start a business after company registration in Indonesia, provided they meet the requirements further depending upon the type of business structure the requirements may differ. In general business model like PT PMA (Foreign-Owned Limited Liability Company) or partnering with local entity are mostly preferred choice among foreigners.

The steps to open a company in Indonesia are

  • Choosing a Company Name
  • Drafting Documents
  • Depositing Share Capital
  • Appointment of Company Officers
  • Choosing a Registered Address
  • Preparation of MoA and AoA
  • Obtaining a Business License

The main types of business structures for company formation in Indonesia are-

  • Limited Liability Company (PT PMA)
  • Representative Office (KPPA)
  • Foreign Trade Representative Company (KP3A)
  • Foreign Oil and Gas Representative Office (KPPA MIGAS)
  • Foreign Construction Services Representative Office (BUJKA)

The minimum paid-up capital in Indonesia for Indonesia company formation is 10 billion Indonesian Rupiah, approximately 53,000,000 Indian Rupees (INR).

The minimum requirements to register a PT in Indonesia are two local shareholders, one local director and one local commissioner.

The foreign investors looking to company set up Indonesia can have a complete ownership with no requirement of an Indonesian partner.

The timeline for obtaining company registration in Indonesia is 2 to 3 weeks, provided documentation is completed on time.

The most common type of business in Indonesia are a local company, foreign-owned company and representative office. For the local company owners must be Indonesian citizens, as foreign ownerships are not allowed. On the other hand, foreign owned company (PT PMA) is open to international investors.

The business tax or corporate income tax for company registration in Indonesia is 25%.

Foreign citizen in Indonesia is only taxed on their Indonesian-sourced income subject to certain requirements as per the laws and regulations.

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