Starting a business in Indonesia, whether as a local or foreign company, requires a deep understanding of the regulations and procedures involved. This article will discuss the essential steps in setting up a company, including the differences between local and foreign companies, requirements, and tips to ensure a smooth process.
1. Differences Between Local and Foreign Companies
A local company is an entity established by Indonesian citizens or legal entities, while a foreign company (PMA – Foreign Investment Company) is set up by foreign parties or with foreign capital participation. Foreign companies usually require special permits such as Principle License and Business License issued by BKPM (Investment Coordinating Board).
2. Steps for Setting Up a Local Company
- Document Preparation: Prepare documents such as ID, Taxpayer Identification Number (NPWP), and domicile certificate.
- Choose Business Entity Type: Select a business entity type such as CV, PT, or cooperative, based on your business needs.
- Legalization of Establishment Deed: Legalize the deed through a notary, then register the deed with the Ministry of Law and Human Rights.
- Business Licensing: Obtain licenses such as the Business Identification Number (NIB) through the OSS (Online Single Submission) system.
- Tax Registration: Register your company to obtain a business NPWP and VAT registration, if required.
3. Steps for Setting Up a Foreign Company (PMA)
- Investment Plan Preparation: Determine the business sector you wish to enter and ensure that the sector is open to foreign investment.
- Establishment Deed Creation: Like local companies, PMAs require the legalization of the establishment deed by a notary.
- Principle License from BKPM: Obtain the necessary principle license as the first step in setting up a PMA.
- Minimum Capital Requirements: Ensure that the paid-up capital meets the minimum requirements stipulated by regulations.
- Business Licensing and NIB: After obtaining the principle license, process the Business License and NIB through the OSS system.
- Registration with Relevant Authorities: Register the company with authorities such as the tax office for NPWP and the Social Security Agency (BPJS) for employees.
4. Tips to Simplify the Company Set-Up Process
- Consult with Legal or Business Consultants: Getting help from professionals can save time and reduce the risk of errors.
- Use the OSS Platform: This platform simplifies the process of obtaining business licenses online and in an integrated manner.
- Monitor Regulatory Changes: Business regulations often change, so make sure you stay updated with the latest developments.
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Conclusion
Setting up a company in Indonesia, whether for a local or foreign entity, requires a good understanding of the legal processes and requirements. With proper preparation and professional assistance, you can establish your business smoothly and in compliance with the applicable regulations. Do not hesitate to contact a consultant if you need further assistance in this process.