Guide to Start a Business in Indonesia

To run a business and set up a company in Indonesia, here are few things that a foreigner needs to know on incorporation of company in Indonesia:

1. Foreign Owned Company in Indonesia (PT PMA)

If a foreign investor wishes to establish a company in Indonesia to get revenues and profits, he/she shall need to establish a foreign-owned company (PT PMA) in Indonesia.

A company is a PMA if a foreign individual or foreign company holds any shares in the company – even it is just 1%.

2. Business Activities

Not all business activities can be run by foreign investors. The Indonesian government regulates some restrictions for certain business activities to be run by foreign investors. For example, some business activities can only be run by foreign investors together with Indonesian investors.

3. Minimum Paid-Up Capital

The minimum paid-up capital for a foreign owned company in Indonesia is Rp2,500,000,000 (approximately US$175,000). The shareholders will have to sign a statement letter saying that they have enough funds for the capital requirements.

4. Minimum Shareholder

PT PMA in Indonesia must have at least two shareholders. The shareholders can be individuals, corporate shareholders, or both.

5. Commissioner and Director

PT PMA must have at least one director and one commissioner. One of the directors should be an Indonesian citizen and must have a valid taxpayer identification number (NPWP).

The foreign director needs to obtain a work permit and a stay permit after the company is established. The commissioner’s job is to supervise the director’s work. The commissioner can be filled by a foreigner.

6. Office Address

To run your business in Indonesia, you need to have an office address that can be registered in your permit. If you are running a small business, you can use virtual office as your office address. We can also help you to get the virtual office address that you need.

Advice for Starting Up Business in Indonesia

This article was prepared and drafted by Yuliana Pertiwi Siagian, the partner and founder of NP Consultant Indonesia (www.np-consultant.com).

NP Consultant Indonesia is a one stop legal consultant providing high quality standard of Indonesian law expertise, market entry service, licensing service, corporate secretarial service and immigration service, etc. With years of knowledge and experience, NP Consultant Indonesia has assisted many local or foreign individuals and corporations in various legal problems in Indonesia.

Yuliana and Gesiu are Indonesian lawyers assist wide range of legal practices, including corporate and commercial, merger and acquisition, mining, energy, natural resources, forestry, trade, investment, tourism, dispute resolution, and marriage law, etc.

For assistance on foreign investment in Indonesia, kindly contact:

(1) Yuliana Pertiwi Siagian

(yuliana@np-consultant.com/+62811 – 8013 – 088)

(2) Gesiu Nicholas Manurung

(gesiu@np-consultant.com/ +62813 – 1143 – 9048)

NP Consultant Indonesia

18 Office Park, 25th Floor Jl. TB Simatupang Kav. 18 South Jakarta DKI Jakarta 12520 Indonesia Office Phone: +6221 – 2780 – 6577