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Effortless Company Registration in Indonesia with CPT Corporate Business Consulting

We provide comprehensive services, from business setup to ongoing compliance support so you can focus expanding your market into Indonesia.

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Forms of legal entities
to consider if you're
a foreign investor

Our corporate specialist with 10+ years of experience on company registration and more can help you navigate the complex process of acquiring legal permit to do business in Indonesia.

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Foreign Liability Company

A Foreign Liability Company (PT PMA) is a limited liability company established under Indonesian law with foreign ownership. It allows foreign investors to conduct business activities in Indonesia, subject to the Positive Investment List which regulates the sectors open to foreign investment. PT PMA provides full legal protection and enables businesses to hire local and foreign employees, own assets, and enter contracts under Indonesian law.

It is called a foreign-owned company in Indonesia if any foreign individual or foreign entity holds share(s) in an Indonesian company. A foreign-owned company is often called PT PMA which stands for Perseroan Terbatas Penanaman Modal Asing or the limited liability company (LLC) of foreign investment.

Most of the business open for foreign investor, but for some sectors it may have a maximum ownership and/or close for foreign business. Under PT PMA, the company is allowed to fully operate in Indonesia, such as generating revenue, hiring staff, buying property in Indonesia under the name of PT PMA, declaring dividends, and sponsoring foreign workers to get visas and/or work permits.

Further, the company can operate its business and can do the activities as below:

To obtain a business license or import and export license
Buy property such as land and building in the name of the company
Hire staff
Open a bank account
Doing the sales and marketing
As a sponsor to obtain a work permit and stay permit for the foreign employee(s)
To separate the liabilities of the business with the parent company
To register your products (cosmetics, food, medicine) so that you can sell your products within Indonesian jurisdiction
To submit a bidding proposal to your Indonesian customers or Indonesian government

The following requirements must be met to register a PT PMA in Indonesia:

Minimum Paid-Up Capital

IDR 2,500,000,000 (two point five billion Rupiah), or approximately USD 150,000 (one hundred fifty thousand US Dollars). The shareholders must sign a statement letter that they will inject the capital in accordance with the shareholding composition in the newly-established company.

Minimum Capital per Foreign Shareholder

IDR 10,000,000 (ten million Rupiah) for each foreign shareholder.

Minimum of Two Shareholders

Shareholders can be individuals and/or corporations. Most businesses are open for foreign investors, but some sectors may have a maximum ownership limit and/or may be closed to foreign business.

Board of Directors and Board of Commissioners

Minimum of 1 (one) Director and 1 (one) Commissioner. The director and commissioner can also hold shares in the company (acting as shareholders). Director and commissioner cannot be the same person.

Should you hire a Local Director? You have to appoint a local director if the appointed foreign director does not obtain a work permit & stay permit in Indonesia. Work permit and stay permit of the foreign director are crucial as they are required to open a corporate bank account and file tax reporting. If the foreign director does not plan to obtain a work permit, you must hire a local director. The advantage of having a local director is that they can also take care of administration purposes during the absence of the foreign director, such as signing relevant documents or invoices.

Registered Office Address

The address must be in a commercial area.

Name of the Company

The name shall consist of 3 words. The words cannot contain terms meaning Corporation, Company, Limited Liability, Incorporation, or any similar name. Example of Indonesian company names: PT Tata Boga Indonesia, PT Jaya Success Indonesia. After you select the name, you must check whether it is available and not similar to other registered Indonesian companies.

No physical presence is required during the registration of company in Indonesia. The steps to register the company in Indonesia are below:

Step 1:

Onboarding Process — Client to sign the service agreement and/or countersign our proposal. After that, we will issue invoice and send you the application form. Upon receipt of payment and application form, we will start the process.

Step 2:

Requirements — Preparing the requirements as mentioned in the previous section i.e. name of the company, registered address, composition of the board of directors and commissioners and shareholders, etc.

Step 3:

Signing the Statement Letter and Power of Attorney — We will provide a statement letter including the statement letter to inject the capital and power of attorney from the shareholders to us to take care the registration process.

Step 4:

Incorporation Process — Articles of Association, Approval from Ministry of Law and Human Right, Tax ID Number (NPWP), Business Identification Number (NIB).

Step 5:

Apply for Work Permit and Stay Permit (KITAS) — You can skip this step or do a parallel process with step No. 6 below if you have a local director to open the bank account.

Step 6:

Open a Bank Account — Limited stay permit and/or work permit is required if the director is a foreigner.

Step 7:

Further License — Some business activities may require a further license. In Indonesia, business activities are categorized based on risk:

License Categories by Risk:

1. Low Risk → NIB

2. Medium Risk → NIB and Standard Certificate (no verification required)

3. Medium-High Risk → NIB and Verified Standard Certificate

4. High Risk → NIB and Permit (izin)

Certain business classifications may also need additional licenses. For example, e-commerce businesses need a PSE Certificate, and businesses selling products consumed by humans need BPOM registration.

Other options to consider

Here are the entity options for you to consider other than company and representative office

Local Company Service

The minimum paid-up capital to establish a PT PMA is quite high. But this requirement does not apply to Indonesian companies whose shares are held 100% by Indonesian. Therefore, if you still need a legal entity and do not want to inject the minimum paid-up capital of PT PMA, you can consider using local company service. Annual charge is applied.

The employer of the Record

The employer of the record is a service where we, CPT Corporate, hire your talent or staff under our company but they will work on behalf of you. The employer of the record is one of the options for you if you do not want to open an entity in Indonesia, but you need someone to take care of the business. We will provide you the services with the payroll, transfer the employee salary, sign an employment contract, and advise you on the Indonesian employment law.