Whether to kickstart or expand your business in Indonesia, understanding the right way to register your company in Indonesia is likely one of the steps you shouldn’t miss.
US News & World Report places Indonesia as the fifth best country to start a company. With the determination to achieve industry 4.0, Indonesia is likely a fresh field for investors to start their business. Knowing how to register and set up a company in Indonesia is the first step you have to go through before opening a business in this country.
Recently, we got the chance to interview one of Lets Move Indonesia’s trusted Legal Associates and Company Corporation experts Ricko Astono. Ricko and Lets Move Indonesia have pocketed years of experience in helping hundreds of individuals and international companies expand and grow across Indonesia by assisting them to register their companies.
This article will summarise his answers to the most common questions about the company business registration process in Indonesia.
What Options are Available for Foreign Investors and Local Investors Registering a Company in Indonesia?
There are multiple options for signing up for Indonesia company registration. Local companies could make a PT (Perseroan Terbatas/Limited Liability Company). In contrast, foreign companies have two options to make a company which are PMA (Penanam Modal Using/Foreign Investor Company) and KPPA (Kantor Perwakilan Perusahaan Asing/Representative Office).
Also read: Types of Companies in Indonesia You Need to Know
Registering A Limited Liability Indonesia Company (PT)
Perseroan Terbatas (PT) is a limited liability companies and running per Indonesian commercial law.
According to Ricko, a business legal entity needs at least two Indonesian (only) Entity Shareholders and at least two Indonesians hired as the President Director and President Commissioner of the company. In some cases, the Shareholders can also register as President Director and President Commissioner. Local shareholders should provide a valid Identity Card (KTP) and a valid Tax ID number (NPWP).
The company registration certificate will also require a company setting up a registration number or business address which later acts as a Registered Office Address. In some cases, companies must depending on their business license, it is possible to use a virtual office. Additionally, approval from the Capital Investment Coordinating Board (BKPM) is also mandatory.
There are two classifications of PT Companies which are UMK (Small Medium Enterprises) and Non-UMK (Non – Small Medium Enterprises) that should fulfil the paid-up capital.
The amount of minimum capital paid varies depending on the business.
For UMK, Ricko said, PT Company should have a minimum share capital starting from IDR 50,000,000. Meanwhile, Non-UMK must pay at least above IDR 5,000,000,000.
Company Registration in Indonesia ( PT PMA company )
PT PMA company registration is a type of business entity for foreigners who want to open a business in Indonesia. The concept of PMA (Penanaman Modal Asing) can be fully or partially foreign owned company. It runs under the stipulated regulations of the Foreign Investment Law and is approved by the BKPM.
To register for the Foreign Fully-Owned PT PMA, a business needs at least two Foreign Entity (can be in form of a Person or Company) to be shareholders. They must have a valid ID of foreign employees, as well as a company virtual office address that could reside in their own head country.
PMA must have a minimum investment of IDR 10 billion. Though the legal requirement amount for the registration process cannot be changed, your legal advisor can suggest several alternative ways. At Lets Move Indonesia, our legal advisors have been trusted to handle several company registrations across various businesses in Indonesia.
Company Representative Office
A Company Representative Office (KPPA) aids a foreign company or foreign government body in supervising and coordinating business or doing market research without the risk of significant investments.
To be a representative office, an entity will need to know a parent company to appoint them as its representative executive. If you are a foreign entity, you need to appoint a person as your Representative Executive in Indonesia.
There is no requirement for capital investment to apply for business and for representative offices because businesses should not make a profit in Indonesia or even issue an invoice.
When Will A Legal & Business Establishment Expert Come To The Rescue?
The process of getting a business company registration Indonesia license varies for each business type. Whether you are a foreign ownership investor or a local company, you must understand the steps thoroughly before applying for company operations in Indonesia.
The process will include filing loads of business license formation paperwork – and it’s likely a sign that your new business activity will need legal advice.
At Lets Move Indonesia, Ricko and his partners have helped a lot of businesses incorporate with complete assistance from starting to maintenance.
As a leading Business consultancy service in Indonesia, Lets Move Indonesia has achieved the title “Best Visa & Business Consultancy” from the National Award Foundation.
For more complete information about Company registration in Indonesia, please visit The Complete Guide by Lets Move Indonesia, here.
