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Indonesia, an economic powerhouse with a diverse and vibrant economy, is the destination of choice for many international investors. However, navigating through the complexities of Indonesian business law can be daunting. That's where we, at NP Consultant, step in. As seasoned law professionals in Indonesia, we are here to simplify this journey for set up a PT PMA in Indonesia.
1. Choose the Right Business Entity
The first step in your journey is choosing the right business entity. For foreign investors, we usually recommend the PT PMA (Penanaman Modal Asing), a foreign investment limited liability company that allows foreign ownership of up to 100%, depending on the business sector. The PT PMA is established by 2 (two) or more individuals through a notarial deed made in Indonesian language. Each founder of the Company is required to take part in the shares at the time of the Company's establishment. At NP Consultant, we provide expert guidance on making this crucial decision and handle all the paperwork, ensuring a seamless process.
2. Navigate the Negative Investment List
The Negative Investment List (Daftar Negatif Investasi) is an important regulation that outlines business sectors either closed, opened 100%, or partially open to foreign investment. Our team at NP Consultant will help you navigate this list, ensuring your business is in compliance with Indonesian law.
3. Company Name Reservation
Reserving your company name is a necessary step, and it must adhere to specific Indonesian regulations. Please be aware that the company name you select must be composed of three unique words. These words may originate from languages other than Indonesian. However, it is essential that neither the combination nor any part of these names have been previously registered with Indonesia's Ministry of Law and Human Rights' system. Our team at NP Consultant can help streamline this process, saving you time and effort.
4. Preparation of Articles of Association
The Articles of Association, outlining your company's purpose, internal structure, and other operational aspects, must be notarized by an Indonesian public notary. NP Consultant's proficient corporate secretarial team is on hand to manage this task, guaranteeing compliance and professionalism.
5. Company Registration
Once your Articles of Association are notarized, you can register your company through the OSS system. Upon successful registration, you will receive your Business Identification Number (Nomor Induk Berusaha or NIB). NP Consultant will manage this process, ensuring a hassle-free experience.
6. Fulfillment of Capital and Investment Requirements
The minimum of issued and paid up capital for a PT PMA is Rp10,000,000,000 (ten billion rupiah), unless otherwise stipulated by the law. Further, in general, the minimum amount of investment for a PT PMA shall be more than Rp10,000,000,000 (ten billion Rupiah), excluding land and building per 5 (five) digits KBLI per project location. Our consultants at NP Consultant will guide you through the capital and investment requirements, ensuring you understand and meet them fully.
7. Obtain Necessary Licenses
Depending on your business activities, the PMA Company may be required to obtain the following business licenses, among others:
(a) Basic requirements for business license, namely: space utilization activity suitability approval or confirmation (persetujuan/konfirmasi kesesuaian kegiatan pemanfaatn ruang (PKKPR or KKKPR), building permit (persetujuan bangunan gedung or PBG), utilization eligible certificate/sertifikat laik fungsi (SLF) and building ownership evidence certificate/surat bukti kepemilikan bangunan gedung (SBKBG), and/or environmental documents and approval.
(b) Risk-based business licenses, namely: Business Identification Number (Nomor Induk Berusaha or NIB), license, and/or standard certificate (sertifikat standar); and
(c) Business license to support the business activity (izin usaha menunjang kegiatan usaha or UMKU).
At NP Consultant, we specialize in license processing, ensuring you get the licenses you need quickly and efficiently. Please note that, some business activities may require more complicated and complex business licenses.
8. Tax Registration
Lastly, you must register your company for tax and obtain a Taxpayer Identification Number (nomor pokok wajib pajak or NPWP). NP Consultant will handle this process and, if applicable, also register your company for Value Added Tax (pajak pertambahan nilai or PPN) so that you will obtain Taxable Enterpreneur Confirmation Letter (surat pengukuhan pengusaha kena pajak or PKP).
9. Hiring Employees
Understanding Indonesian labor laws and social security programs (badan penyelenggaran jaminan sosial or BPJS) is critical when hiring employees. At NP Consultant, we provide expert guidance on these regulations, ensuring your business is compliant.
Setting up a business in Indonesia may seem like a challenging task, but with NP Consultant, the process becomes smooth and manageable. We provide all the guidance, services, and expertise you need to navigate the Indonesian market successfully. Our commitment is to ensure you feel confident and well-informed every step of the way.
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. 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:
Yuliana Pertiwi Siagian
(yuliana@np-consultant.com/+62811 – 8013 – 088)
NP Consultant Indonesia
18 Office Park, 25th Floor Jl. TB Simatupang Kav. 18 South Jakarta DKI Jakarta 12520 Indonesia Office Phone: +6221 – 2780 – 6577
Disclaimer: This blog provides a general overview and does not constitute legal advice.