Introduction 

Registering a company in Indonesia involves several key steps. Foreign investors often choose legal entities like PT PMA, representative offices, or branch offices. The process includes fulfilling minimum investment requirements, preparing necessary documents such as articles of association, obtaining a Tax Identification Number (NPWP) and a Business Identification Number (NIB), submitting documents to the Indonesia Investment Coordinating Board (BKPM), and completing registration with the Ministry of Law and Human Rights. The post-registration phase involves obtaining additional licenses and permits. 

Types of Legal Entities for Foreign Investors in Indonesia

Foreign investors in Indonesia can choose from various legal entities, including:

1. PT PMA (Perseroan Terbatas Penanaman Modal Asing):

• A Limited Liability Company with Foreign Capital.

• Common choice for foreign investors.

2. Representative Office:

• Allows foreign companies to establish a presence without engaging in commercial activities.

• Suitable for market research or liaison purposes.

3. Branch Office:

• An extension of a foreign company.

• Permitted to engage in commercial activities.

What are the Requirements to Set Up an Indonesian Company?

The specific requirements for setting up an Indonesian company can vary based on the chosen legal entity, but generally include:

• Investment Plan: Prepare a detailed investment plan outlining the proposed business activities, capital investment, and operational plans.

• Minimum Capital Requirements:  Fulfill minimum capital requirements, which depend on the type of legal entity chosen.

• Articles of Association: Draft and notarize the articles of association (Akta Pendirian), specifying the company’s structure, objectives, and operational details.

• Local Address: Provide a local business address for registration purposes.

• Director and Shareholder Information: Submit information about directors, commissioners, and shareholders, including passports, CVs, and other relevant details.

• Tax Identification Number (NPWP) and Business Identification Number (NIB): Obtain an NPWP and NIB from the tax office.

• Approval from BKPM: Submit the required documents to the Indonesia Investment Coordinating Board (BKPM) for approval.

• Ministry of Law and Human Rights Registration: Complete the registration process with the Ministry of Law and Human Rights.

• Other Licenses and Permits: Depending on the industry, acquire additional licenses and permits.

Company Registration Timeframe in Indonesia

The timeframe for company registration in Indonesia can vary based on factors such as the chosen legal entity, completeness of documentation, and government processing times. Generally, the process takes several weeks to a few months. 

Here is a rough estimate:

• Preparation: 1-2 weeks (varies based on readiness of required documents).

• Submission to BKPM: 2-4 weeks for BKPM approval.

• Ministry of Law and Human Rights Registration: 2-4 weeks for final registration.

Documents for Company Registration in Indonesia

The documents required for company registration in Indonesia generally include:

• Investment Plan: Detailed plan outlining business activities, investment amounts, and operational details.

• Articles of Association (Akta Pendirian): Drafted and notarized document specifying company structure, objectives, and operational details.

• Passports and CVs: Copies of passports and Curriculum Vitae (CV) for directors, commissioners, and shareholders.

• NPWP and NIB: Tax Identification Number (NPWP) and Business Identification Number (NIB) obtained from the tax office.

• Proof of Capital Injection: Documentation demonstrating the injection of minimum required capital.

• Deed of Establishment Approval from BKPM: Approval from the Indonesia Investment Coordinating Board (BKPM) for the Deed of Establishment.

• Company Registration Certificate (TDP): Issued by the local government after registration is complete.

• Other Industry-Specific Documents: Depending on the industry, additional licenses or permits may be required.

Ensure all documents are accurate, complete, and meet the specific requirements for the chosen legal entity. 

Procedure for Company Registration in Indonesia

The procedure for company registration in Indonesia typically involves the following steps:

• Choose Legal Entity: Decide on the type of legal entity suitable for your business, such as PT PMA, representative office, or branch office.

• Prepare Documents: Gather required documents including the investment plan, articles of association, director/shareholder information, passports, and other relevant papers.

• Minimum Capital Injection: Ensure the minimum required capital is ready for injection into the business.

• Obtain NPWP and NIB: Acquire a Tax Identification Number (NPWP) and Business Identification Number (NIB) from the tax office.

• Submit to BKPM: Submit documents to the Indonesia Investment Coordinating Board (BKPM) for approval.

• BKPM Approval: Await approval from BKPM for the Deed of Establishment.

• Ministry of Law and Human Rights Registration: Complete registration with the Ministry of Law and Human Rights.

• Receive Company Registration Certificate (TDP): Obtain the Company Registration Certificate from the local government.

• Post-Registration Obligations: Fulfill additional requirements, such as obtaining industry-specific licenses and permits.

Why set up a company in Indonesia?

Setting up a company in Indonesia can be advantageous for several reasons:

• Growing Market: Indonesia has a large and dynamic market with a rapidly growing middle class, offering opportunities for various industries.

• Strategic Location: Geographically positioned as a gateway to the Asia-Pacific region, providing access to key markets.

• Investment Incentives: The government offers incentives and facilities to attract foreign investment, such as tax incentives and simplified regulations in certain sectors.

• Diverse Economy: Indonesia’s diverse economy spans sectors like manufacturing, natural resources, services, and technology.

• Population Demographics: With a young and digitally connected population, there’s a growing consumer base and potential for tech-driven businesses.

• Natural Resources: Abundant natural resources can be beneficial for industries such as mining, agriculture, and energy.

• Strategic Industries: Focused government initiatives on key sectors, including infrastructure, renewable energy, and tourism.

• Regional and Bilateral Agreements: Membership in regional agreements and trade partnerships, facilitating international business activities.