This post is also available in: Indonesia (Indonesian) 简体中文 (Chinese (Simplified))

Complete Guide of Indonesia Company Registration 2024

A Comprehensive Guide to Registering Your Indonesian Company

Indonesia’s large market is the primary reason it attracts foreigners for company registration. If you intend to set up a company in Indonesia,

this guide to company registration in Indonesia is a must-read.

What You Need to Know Before Your Indonesia Company Registration?

Home to the world’s fourth-largest population, competition is not as stiff in Indonesia compared to some of its neighbours. Being a member of the G20 group of countries has also made it a promising business destination. Indonesia is classified as a bureaucratic country. Foreign investments are monitored and regulated by the local Badan Koordinasi Penanaman Modal (BKPM), also known as the Indonesia Investment Coordinating Board. Indonesia companies are established based on the Indonesia’s Company Law No. 40 of Year 2007 and has been amended by Omnibus Law in Job Creation No. 11 Year 2020 dated 2 November 2020.

To set up a company, there needs to be a Deed of Establishment, which is to be done once you have selected the name of your company and that name has been approved. You would need to engage the services of a registered notary public. The notary public will be responsible in helping you draft your company’s Articles of Association. Indonesian law requires that the Articles of Association contains the following information:

Company name
Company’s place of domicile
Company’s objectives i.e. business activities or line of business
Capital details (i.e. authorize capital, paid-up and issued capital)
Value and amount of company shares
Minimum 2 shareholders
Minimum 1 director & 1 commissioner (which the director and commissioner cannot be the same person)
Duties and responsibilities of director & commissioner
Location of shareholders’ meetings
Method of conducting shareholders’ meetings
Procedure of distribution and use of company’s dividends and profits

To apply for a company registration number and the relevant licenses, you will need the Deed of Establishment, approval from the Indonesian Ministry of Law and Human Rights (“MOLHR”) and the identification documents of all the shareholders, director & commissioner. If the shareholder is a company, you will need to provide the Deed of Establishment, MOLHR’s approval, with all the amendments (if any) of the corporate shareholder and all business licenses.

Based on the BKPM guidelines, PMA companies are required to register for a minimum authorised capital not less than IDR10,000,000,000/- with 25% of the authorized capital as the minimum paid-up capital. There are two alternative ways to demonstrate to the relevant authorities on the existence of the minimum paid-up capital:

Furnishing a Capital Statement Letter stating that the shareholders have sufficient funds to inject the capital after the incorporation; or
Depositing the monies in the company’s bank account

All the shareholders will need to place their signature on the Articles of Association. The document must be signed in the presence of a notary public. If a shareholder is unable to sign the Articles of Association in the presence of a notary public, the shareholder can appoint a power of attorney to act for him/her. The Articles of Association will be submitted to the MOLHR by the notary public. Upon approval, you will be issued with the Deed of Establishment with the MOLHR approval.

If you need to amend any information in your company’s Articles of Association after the Deed of Establishment with the MOLHR approval are obtained, you will need to prepare a Deed of Amendment for approval at a shareholders’ meeting. You must engage the services of a notary public to prepare the Deed of Amendment.

If you are a foreigner, before you incorporate a business in Indonesia, you need to determine the best legal entity suitable for your business. You will also need to identify the industry your business will be involved in. To determine if the industry is open to foreign investment and the percentage of foreign ownership requirement, you can refer to the Indonesia Negative Investment List (“DNI”), which is made to protect Indonesian economy as well as to provide more business chances to investors. It is a set of business sectors list which let investors know which sectors are they allowed to invest in, and its regulations, especially regarding shares ownership. If your company is a Foreign Investment Company (“PMA”) with 100% foreign ownership but is involved in any business that is listed in the DNI, which requires you to have a local shareholder based on the percentage requirement mentioned in the DNI, you will need to hold a general meeting of shareholders (“GMOS”) to approve the deed of amendment with the following agenda:

Change the shareholders composition
Change the authorised capital, issue and paid-up capital (if necessary)

If your company is a local company and a foreign investor would like to put a share/invest as a shareholder in your company, you will also need to hold a GMOS to approve the deed of amendment with the following agenda:

Change the company registration status
Change the shareholders composition
Change the authorised capital, issue and paid-up capital

For both situations above, you may need to change your business licences as well.

An official business name in Indonesia must fulfil certain criteria such as it must be written in roman letters; it is not the same or substantially the same with a company name which is lawfully used by another company; it is not contrary to public order and/or morality, it is not the same or similar to the name of the state bodies, government bodies, or international bodies, unless it obtained permission from such bodies; it does not consist of numbers or series of numbers, letters or series of letters that do not form a word; it contains at least three words, etc. A PMA is allowed to have English word for their company name. Official company names are only used for legal purposes. You may choose to register another name that is more distinct to your product or brand if needed.

To establish a PMA company, it is possible that the director and commissioner members are all foreigners. However, for the practicality of business operations, it is recommended that the company also appoint a local director. In the absence of a local director and if the foreign directors do not have work permit and Tax ID, the business operation in Indonesia including the signing of documents such as for bank account opening, Electronic Tax filing system (“EFIn”) registration, etc, will be limited.

The registration of EFIn will require that the foreign director has a TAX ID and Personal EFIn which can only be obtained if the foreign director has a Work Permit. With a work permit, the foreign director will need to obtain a personal Tax ID (Tax resident). With the Tax ID, the foreign director can enjoy local tax rate for his/her income tax in Indonesia. A foreigner who does not have a Tax ID will have 20% more tax cut on his/her personal income tax.

If the foreign director or commissioner will not be stationed in Indonesia to work, it is recommended that one of them apply for a KITAS after all the processes have been completed if they would like to visit Indonesia frequently to supervise and monitor their business. Otherwise, they may face entry issues at the Indonesia custom for setting up a company.

If you are a foreign director, the identification documents required include:

Passport
Tourist Visa only if you will rarely visit to Indonesia
Business Visa if you already have potential clients and will have several meetings in Indonesia
KITAS (Temporary Permit) if you already established a company in Indonesia and want to have regular such as weekly meetings in Indonesia
IMTA (Working Permit) if you sit and work daily in your office/company in Indonesia

Types of Companies in Indonesia

Indonesia considers all foreign companies as PT PMAs (Perseroan Terbatas Penanaman Modal Asing). A common misconception is that foreign ownership means a smoother registration process. However, this is untrue because only if there is a local partner with 100% share ownership, the registration process will be smoother.

To incorporate a business in Indonesia, you can choose from the following types of entities:

Company Type and Structure	Suitable For	Advantage	Disadvantage
Local Company (PT)	Foreigners who want to do business in Indonesia. They have the option to conduct business as a local or a foreign investor using a local director. Requires a minimum of 2 shareholders (individuals or companies). Licensing handled through Online Single Submission (OSS).	Not subject to strict limits and requirements like foreign entities.	100% local ownership only
Foreign Owned Company/Limited Liability (PT PMA)	Foreigners who want 100% ownership of the company. Requires a minimum of 2 shareholders (individuals or companies). Licensing handled through Online Single Submission (OSS).	100% foreign ownership allowed. You have the same rights and responsibilities like local companies. Able to participate and join tenders locally. Able to apply for business licences and import. Able to apply for product registration. Foreign employees able to apply for KITAS (a limited stay permit in Indonesia or a temporary residency permit that is valid for six months to one year) or a work visa. Able to sponsor business visas for visitors and foreign clients under your company. Even 1% foreign ownership can be considered a PT PMA.	Maximum ownership (foreigners) will be decided by the business activities and sector through the Negative List Restrictions provided in the Indonesia Negative Investment List.
Representative Office	A branch of the overseas parent company. The first step for investors who want to enter the local market. Set up for marketing activities purposes, preparing to establish a PT PMA or for market research.	Ideal option for testing the local market. Focus on research to help you determine the next step forward. No minimum capital. No shareholder and director required. No commissioner required.	Direct selling or revenue generation is not permitted. Coordinator, supervisor, or representative has limited role.

Alternatively, there are other options to consider besides the three primary entities above. These options include:

Purchasing a ready-made shelf company. This will allow you to skip the company registration process.

Nominee Company – The nominee company will act as the registered owner on behalf of the real owner. It is important to source for a partner who will have your best interests at heart if you go with this option.

Generally, the cost of setting up an Indonesia company starts from US$1,500. This is for a local company (PT company) that is based in Jakarta. The cost will differ based on the type of business entity, the location you choose and service provider who you engaged.

Registration Timeline and Procedure

In Indonesia, there are three entity options for investors to register their Indonesia company:

Representative Office
Local Company (PT)
Limited Liability Company (PT PMA). This entity is also referred to as a Foreign Direct Investment Company

Your company can be registered within a month or 1.5 months. Once fully registered, you can immediately commence business operations. You can open a bank account under the company’s name by submitting your Deed of Establishment and all your completed business licences to the preferred bank.

Most businesses in Indonesia can be established through the OSS system, which makes the process quicker and easier. To establish a PMA company in Indonesia, these are the requirements involved:

Step 1 – Approval of Company Name and Acquiring Deed of Establishment	Choosing the right type of classification for your business is an important first step. This will ensure you don’t encounter problems later. Company name approval takes one business day. The place of domicile, or your office registration address is required. You will need to execute a Deed of Establishment. This can be done in two – three days. The Deed of Establishment must be certified by the Ministry of Law and Human Rights. This can be done in 3 days after the submission of the deed of establishment to the MOLHR. 3E Accounting will assist with the checking of your intended business activities. From there, we will recommend the best route that you can take.
Step 2 – Processing the Domicile in Local District Office (only applies for areas outside Jakarta)	Requires Deed of Establishment, MOLHR Approval, rental office agreement, ID of director. This takes 2-3 days.
Step 3 – Registering for Taxes	Acquire a Tax Identification Number (NPWP). This can be done at the local tax office. This process can be done in 2 days. To receive the original card depends on the schedule from the Tax Dept
Step 4 – Registering for Business Identification Number	To operate in Indonesia, you need an Identification Number or Nomor Induk Berusaha (NIB). You will need to register your company with the OSS. Once done, you will receive your NIB. This can be done in two day. NIB will serve as your Import Licence, Customs Identification Number (NIK), and Business Registry Number. NIB will automatically register your business under the Health and Social Security System (BPJS Kesehatan dan BPJS Ketenagakerjaan) and LKPM (Investment Report), which you can process it at a later stage.
Step 5 – Acquiring Operational and Commercial Licence	This is usually issued on the same day as your NIB. Applicable if your business has no further requirements. Certain business activities may need additional fulfilment, in which cases licences can take months to be approved.

This registration timeline procedure applies to businesses based in Jakarta as an example. For other areas of Indonesia, the registration may take longer times. The timeline above is merely an estimate, as the nature of your business may affect the speed of registration too.

Post-Registration Formalities Involved

Once successfully registered, you can start business operations in Indonesia. You will be able to conduct the following activities on behalf of your company:

Opening a bank account under your company
Purchase assets and property
Hire staff
Join a tender
Obtain permits for any foreign employees
Obtain operating business licences (if needed)
Obtain company regulation (“PP”) when you have permanent employee already
Report your investment report to BKPM on a quarterly basis (it’s called LKPM – Laporan Kegiatan Penanaman Modal)

Anytime you would like to change the company information that was stipulated on your Deed of Establishment, you will need to engage a Notary public to do the amendment. All shareholders of the company are to sign on the form of amendment at the General Meeting of Shareholders, and the Notary will process the Deed of Amendment.

For your easy reference, please see table below for a summary of the company registration requirements in Indonesia

Type of Company	Position	Local /Foreigner	Requirement Document	Document to Sign	Presence	Absence
Local	Director	Indonesia Citizen	KTP & NPWP (ID & Tax Card)	Statement Letter Opening bank account	No need
	Director	Foreigner (possible, but this is not preferable since you might find obstacle when your company apply for business licence also depends on your authorised capital and line of business from your company)	Passport	Statement Letter	No need
	Commissioner	Indonesia Citizen	KTP & NPWP (ID & Tax Card)	Statement Letter	No need
	Shareholders	Indonesia Citizen	KTP & NPWP (ID & Tax Card)	Notary Deed & Statement Letter	Physical in front of Notary for signing the Notary Deed	Provide power of attorney, the attorney needs to provide ID
	Shareholders	Local Company	· Deed of Establishment & MOLHR Approval · Each Deed of Amendment & MOLHR Approval · Business Licences (domicile, NIB, NPWP)	Notary Deed & Statement Letter	Physical in front of Notary (One Director of the Local Company) for signing the Notary Deed	Provide power of attorney, the attorney needs to provide ID
PMA (Foreign Company)	Director	Foreigner	Copy of Passport	Statement Letter	No need
	Commissioner	Foreigner	Copy of Passport	Statement Letter	No need
	Director	Indonesia Citizen	KTP & NPWP (ID & Tax Card)	Statement Letter & Opening Bank account	No need
	Commissioner	Indonesia Citizen	KTP & NPWP (ID & Tax Card)	Statement Letter	No need
	Shareholder	Private individual (Indonesia Citizen)	KTP & NPWP (ID & Tax Card)	Notary Deed & Statement Letter	Physical in front of Notary for signing the Notary Deed	Provide power of attorney, the attorney needs to provide ID
		Private Individual (Foreigner)	Copy of Passport	Notary Deed & Statement Letter	Physical in front of Notary for signing the Notary Deed	Provide power of attorney which notarized by Public Notary overseas, the attorney needs to provide ID
		Local Company	· Deed of Establishment & MOLHR Approval · Each Deed of Amendment & MOLHR Approval · Business Licences (domicile, NIB, NPWP)	Notary Deed & Statement Letter	Physical in front of Notary (One Director of the Local Company) for signing the Notary Deed	Provide power of attorney, the attorney needs to provide ID
		Foreign Company	· Eg. Singapore ACRA BizFile · Memorandum And AoA	Notary Deed & Statement Letter	Physical in front of Notary (One Director of the Foreign Company) for signing the Notary Deed	Provide power of attorney which notarized by public notary overseas, the attorney needs to provide ID

What is a PMA Company in Indonesia?

As of the first quarter of 2021, Foreign Direct Investment (FDI) in Indonesia has risen to USD7.72 billion. This is a year-on-year rise of 14% and clearly indicates that FDI is gaining traction in Indonesia. Therefore, establishing a PMA Company in Indonesia is the most viable way for foreign investors to do business here.

Any foreign-owned company is known as a PMA (Penanaman Modal Asing) or PT PMA (Perseroan Terbatas Penanaman Modal Asing). PTs are limited liability companies, and with foreign direct ownership, the addition of PMA modifies the company’s legal entity status. PMA type of companies allows foreign investors to generate income and earn revenue in Indonesia legally.

Previously, incorporating a company and doing business in Indonesia has not been a straightforward activity. The lack of codification and transparent governance, and administrative bureaucracy have been a constant headache for foreign investors. However, the introduction of several economic reforms now facilitates the ease of doing business in Indonesia, including the Omnibus Law.

In particular, Presidential Regulation 10 of 2021, which came into effect in March, opened up more sectors to foreign investors. This regulation, which acts as an antithesis to the Negative Investment List, allows 100% foreign investment unless expressly limited. Thanks to this ‘positive investment list’, it is now easier and more viable to establish PMAs in Indonesia.

General Requirements to Establish a PMA Company in Indonesia

Presidential Regulation 10 of 2021 has resulted in far-reaching changes as far as foreign-owned companies are concerned. Before establishing a PMA company, you should be aware of the categories as they apply to foreign investors. Fully open business sectors such as restaurants, etc., can be owned 100% by foreign investors without specific conditions. Fully closed business sectors such as casino activities, etc., are not open to foreign investors at all.

A hybrid category is the partially open business sectors such as the oil palm industry, etc. It requires foreign investors to have local shareholders and partners in order to do business in this sector.

Foreign investors and shareholders can wholly or partially own a PMA Company in Indonesia. Provided all documentation is in order, the incorporation process should take between two to three weeks. The following requirements should be noted before you begin your entrepreneurial journey:

Foreign ownership percentage can be anywhere from 1% to 100%.
A PMA will need to have a minimum of two shareholders, one director and one commissioner.
Foreign investors who hold the position of director or commissioner will require an investor KITAS or Indonesian stay permit.
Foreign employees will need a work permit from the Indonesian Ministry of Manpower.
Depending on the type and sector of business, specific licences may be required before the company starts its business activity.
There is a minimum investment of IDR10 billion needed to establish a PMA in Indonesia.
The company will need a registered office address with a location in an area designated for business or commercial activities.
Ensure you get a building permit or Izin Mendirikan Bangunan (IMB) for any of your business properties.

What is a Company Registration Number in Indonesia?

Any company that wants to conduct business in Indonesia will need to acquire a business or company registration number. This is a legal requirement that applies to all companies by virtue of Article 1 BKPM Reg 1/2020. Known as Nomor Induk Berusaha (NIB) it is recognised as a company registration certificate or Tanda Daftar Perusahaan.

Previously, Indonesian companies needed to get a business registry number, import licence and a customs identification number. These were separate documents, and the application process was long, tedious, and costly.

However, new reforms and initiatives such as the OSS (Online Single Submission) system and the Omnibus Law have streamlined the process. The NIB is now an amalgamation of necessary business registration documents – everything a company needs to trade legally. As a one-stop solution, it eliminates administrative bureaucracy and increases the ease of doing business in Indonesia.

Local PT companies, as well as foreign PT PMAs, will need this unique number to trade in Indonesia. In addition, it facilitates visa sponsorship for foreign clients and employees and allows your company to acquire assets. Everything from participating in tenders to getting a corporate bank account, licenses and tax file number begins with the NIB. The NIB also acts as an automatic registration under the Health and Social Security System (BPJS Kesehatan and BPJS Ketenagakerjaan).

Once your company is registered, it will be listed in the Indonesian company registry. It is the best evidence that your business is legally incorporated and protected under Indonesian law. Trading or running your business without a valid NIB can lead to the dissolution of your company.

How to Get a Company Registration Number in Indonesia?

Applying for an Indonesian company registration number should be done after the first two steps of the incorporation process. Hence, after obtaining a deed of establishment and registering for a business tax number, the next step is NIB. The OSS system, which handles the online registration of companies in Indonesia, will issue your company’s NIB.

The NIB is a unique 13-digit number that acts as your company’s legal identification and authorisation to conduct business. You will need to set up an OSS account first by filling out the online registration form. This requires submitting information such as the NIK number of the Person in Charge of your company, etc.

Upon successful submission, the OSS system will issue your company’s OSS user ID and account verification email. After verification, you will need to log into the OSS system and complete the registration. Some of the relevant data that needs to be submitted may include:

Company identification such as name, location, shareholders’ information, tax number, etc.
Business information and classification data, i.e., the Indonesia Standard Industrial Classification (Klasifikasi Baku Lapangan Usaha Indonesia or KBLI)

Upon submission, the OSS system validates the data and may request additional information. Once that is completed, and the submission is successful, the OSS system will then issue your company’s NIB. Your company is now ready to begin its entrepreneurial journey.

Ready to Incorporate Your Indonesia Company?

Looking for help in how to incorporate a company in Indonesia, 3E Accounting is always there for you. Get in touch with our friendly consultants and let us help you prepare for your Indonesia company registration process.

Guide to Indonesia Company Registration