In this article, Social Expat is joined with Givenia, a professional legal associate from LMI Consultancy, to answer your most common questions in regard to registering a company in Indonesia in 2025.
You may have noticed a lot of conflicting information on the internet and in social media groups about registering a new business in Indonesia. Therefore, we try to break down your most common questions and provide the answers.
What are the most common types of business entities in Indonesia?
Indonesia offers several types of legal entities, but the most common ones for commercial purposes are:
- PT (Perseroan Terbatas): A limited liability company, which is the standard legal entity for both local and foreign investors. PTs are further categorized based on ownership structure into:
- PT PMDN (Penanaman Modal Dalam Negeri): A locally owned limited liability company.
- PT PMA (Penanaman Modal Asing): A foreign-owned limited liability company.
- Representative Office (KPPA/K3PA): Designed for foreign companies that wish to explore the Indonesian market without engaging in direct commercial activities.
There are also several other types of legal entities available, depending on the business scope and structure. The most suitable entity depends on the ownership composition and the nature of the business activities involved.
Can foreigners operate all business types in Indonesia?
While Indonesia is open for foreign investment, not all industries support foreign business. Some business activities are restricted or partially limited based on the Positive Investment List (Presidential Regulation No. 10/2021 and No. 49/2021).
Industries like media, education, alcoholic beverages, and certain transportation services have foreign ownership restrictions (Negative Investment List) or require partnerships with local individuals or entities in the business structure.
It’s important to verify whether your intended business activity is fully open, conditionally open, or restricted for foreign investment.
How long does it take to register a company in Indonesia?
The process typically takes 20 working days, depending on the completeness of documents and coordination with related government institutions. However, this can vary slightly if you’re setting up a PT PMA, especially if additional licenses or permits are required.
How much does it cost to register a business in Indonesia?
At LMI Consultancy, we pride ourselves on being transparent, reliable, and one of the most affordable among top-tier agencies in Indonesia. Our pricing is straightforward with no hidden fees, ensuring you know exactly what you’re getting.
- PT PMA (Foreign-Owned Company) – IDR 30 million
Includes:
• Deed of Establishment (Akta Pendirian)
• Ministry Approval (SK)
• Business Identification Number (NIB)
• Tax ID Number (NPWP)
- PT PMDN (Locally-Owned Company) – IDR 17 million
Includes the same full-service process for local company registration.
What are the requirements to register a business in Indonesia?
For a PT PMA (foreign-owned):
- Minimum IDR 10 billion paid-up capital
- At least 2 shareholders (can be individuals or entities)
- 1 local director and 1 commissioner
- A registered office address in Indonesia
- Business classification must be allowed under the Positive Investment List
For a PT PMDN (locally owned):
- Capital requirement varies by company size
- Must have Indonesian shareholders
- Similar OSS (Online Single Submission) process and documentation
What are the investment values when registering a company Indonesia?
PT PMDN (Indonesian Limited Liability Company)
- Small: IDR 50 million – 500 million
- Medium: IDR 500 million – 10 billion
- Large: Above IDR 10 billion
PT PMA Company (Foreign Owned Company)
- Required minimum investment: IDR 10 billion
- Minimum paid-up capital: IDR 10 billion (can be declared, with proof of investment submitted to OSS BKPM)
Do you really need a physical office in Indonesia to start a business?
Yes, a registered office address is mandatory. However, this doesn’t have to be a full operational office—it can be a virtual or serviced office, especially during the initial phase. The address must be valid and located in a commercially-zoned area, as required for OSS and tax registration.
What are the monthly and annual obligations for operating a business in Indonesia?
Operating a business in Indonesia comes with key compliance requirements to ensure everything runs smoothly and within legal boundaries.
For Indonesian companies and multinational companies, the monthly obligations include:
• VAT reporting (if your business is VAT-registered)
• Employee withholding taxes (PPh 21)
• Corporate income tax instalment (PPh 25)
Annual obligations include:
• Annual corporate income tax filing (PPh 29)
• Submission of the annual financial statement along with annual general meeting of shareholders
• For PT PMA (foreign-owned companies): Quarterly LKPM (Investment Activity Reports)
These obligations might sound complex, especially if you’re new to the Indonesian system, but that’s exactly where LMI Consultancy comes in. We help ensure everything is done correctly and on time, so your focus stays on growth, not paperwork.
Can I employ foreigners if I make a business in Indonesia?
Yes, you can absolutely hire foreign employees. However, there are certain regulations to follow, such as obtaining a work permit (RPTKA and KITAS) and ensuring that the position is aligned with roles typically allowed for foreign expertise. Our team at LMI Consultancy specialises in handling these processes efficiently, making international hiring easier and fully compliant.
If I don’t make any profit, do I still have to do reporting?
Yes—even if your company isn’t generating revenue, you are still legally required to submit monthly and annual reports. This includes zero reporting for tax, which shows the government that your business is active and in good standing. Non-compliance can lead to penalties or tax audits, which are easily avoidable with the right guidance.
If I want to close a business in Indonesia what is the process?
Closing a business, or company liquidation, involves several formal steps, including:
• Holding a General Meeting of Shareholders to approve the dissolution
• Appointing a liquidator
• Settling outstanding liabilities and taxes
• Publishing a liquidation announcement
• Finalising the deregistration through the Ministry of Law and Human Rights and the Tax Office
It’s a meticulous process—but LMI Consultancy provides full assistance throughout, making the experience as stress-free as possible for our clients.
Why work with LMI Consultancy when setting up a business in Indonesia?
When it comes to legal matters and business operations, choosing the right partner is crucial. The wrong guidance can lead to delays, avoidable costs, or even compliance risks. That’s why working with a team that values trust, integrity, and doing the right thing isn’t just a smart decision — it’s an essential one.
LMI Consultancy stands as a trusted partner for business expansion in Southeast Asia, helping foreign investors to navigate the correct process of company incorporation and business authorisation. At LMI Consultancy, we bring together deep local expertise, transparent pricing, and personalised service to ensure your business journey in Indonesia is smooth, compliant, and strategically aligned with your goals. Whether you’re entering the market or scaling your operations, our team is here to make sure every legal and administrative detail is handled with precision and care. Let LMI Consultancy be your trusted ally in Indonesia,so you can focus on what truly matters: building and growing your core business.
If you would like a free consultation with the most trusted agency in Indonesia, then contact LMI Consultancy (formally known as Lets Move Indonesia). With multiple awards for being the number 1 agency in Indonesia, paired with their transparent and ethical values, no other agency in the country has done more to improve expatriate services in the country than them.
About The Writer: Givenia Shintia
Givenia Shintia Regina (Nia) is a highly experienced legal professional with a distinguished academic background from the Faculty of Law at Gadjah Mada University, Yogyakarta. Her strong academic achievements have laid a solid foundation for a career defined by legal precision, professional integrity, and a commitment to delivering impactful, results-oriented solutions.
As the Legal and Tax Manager at LMI Consultancy, Nia brings extensive expertise in establishing foreign investment companies, managing business licensing, and ensuring regulatory compliance within Indonesia’s dynamic and complex business environment.
What distinguishes Nia is her capability to distil complex legal frameworks into clear, actionable strategies. With a proven track record of working across diverse industries and collaborating with multi-functional teams, she provides legal counsel that is not only compliant but also aligned with practical business needs. Her cross-sector experience enables her to deliver strategic, client-focused legal advice that supports both operational efficiency and long-term business growth.
