Limited Liability Company (LLC) in Indonesia: A Brief Guide

Limited Liability Company (LLC)A Limited Liability Company (PT) is Indonesia’s most popular business structure. It is a separate legal entity from its shareholders, meaning that the shareholders’ personal assets are protected when the company goes into debt or incurs losses. There are two primary types of PT in Indonesia:

Foreign Company (PT PMA)

PT Penanaman Modal Asing (PT PMA) is a preferred option for foreign investors. It allows foreign businesses or individuals to own shares within the company, either entirely or partially, depending on the industry sector. Some sectors have restrictions on foreign investment, necessitating Indonesian partners.

To determine eligibility, check the Negative Investment List, which outlines the permissible foreign ownership percentage.

Local Company (PT)

A Local Indonesian Limited Liability Company (PT) has complete Indonesian ownership and faces no business activity restrictions. Capital requirements vary:

  • Small Size: IDR 50,000,000 – IDR 500,000,000
  • Medium Size: IDR 500,000,001 – IDR 10,000,000,000
  • Large Size: Above IDR 10,000,000,001

 

Advantages of Establishing a PT in Indonesia

  • Limited Liability: Shareholders enjoy personal asset protection up to their investment.
  • 100% Foreign Ownership: Allowed in non-restricted sectors.
  • Investment Incentives: SEZs offer incentives.
  • Transferable Shares: Share transfer is straightforward.

 

Requirements for Setting Up a PT in Indonesia

  • 2 Shareholders: For local companies, both must be Indonesian. For foreign companies, at least one must be foreign.
  • 1 Director: Local or foreign, residing in Indonesia.
  • 1 Commissioner: Non-resident individuals accepted.
  • Paid-up Capital: Foreign companies need a total investment plan of IDR 10,000,000,000, with IDR 2,500,000,000 paid-up.

 

Steps and Requirements for a PT

Principle License and Business License: Obtain from BKPM.

Deed of Establishment: Detail shareholders, Directors, Commissioners, and capital structure, notarised by a public notary.

Legal Entity Status: PT PMA obtains it from the Ministry of Law and Human Rights.

Domicile Letter: If outside Jakarta.

Tax ID (NPWP) and Taxable Entrepreneur Confirmation (PKP).

Business ID Number: From Online Single Submission and Business License.

Annual Reports: Submit to the Ministry of Manpower.

Setting up a Limited Liability Company in Indonesia involves adhering to legal procedures and regulatory compliance, ensuring compliance with Indonesian laws.