COMPANY SET-UP (FOREIGN & LOCAL)​

To establish a company in Indonesia, the investors will need to identify the types of Limited Liability Company that are recognized based on the regulations and law. A foreign-owned company (PT PMA) is for investors originating from overseas companies or foreign individuals. Local company or commonly known as PT PMDN is for those investing domestically and of national citizens and legal entities.

Requirements

FOREIGN-OWNED COMPANY PT PMA

  • PT PMA can only contribute to large-scale business in Indonesia;
  • PT PMA is required to have minimum capital of IDR 10 billion;
  • The Company consists of minimum 2 Shareholders;
  • The Company will be required to have at least 1 Director and 1 Commissioner;
  • Business activities must be classified under the Business Classification Code based on Indonesian Regulations; and
  • Certain business activities will be required to have joint venture form with local investors.

Requirements

LOCAL-OWNED COMPANY PT PMDN

  • PT. PMDN can contribute to several sizes of business model: small, medium and large;
  • PT. PMDN of small size business is required to have minimum more than IDR 50 million;
  • The Company consists of minimum 2 Shareholders;
  • The Company will be required to have at least 1 Director and 1 Commissioner; and
  • Business activities must be classified under the Business Classification Code based on Indonesian Regulations.

PROCEDURES TO INCORPORATE LIMITED LIABILITY COMPANY IN INDONESIA

Acknowledged as Legal Entity – Indonesia Company Law No. 40 of 2007 and Omnibus Law No. 11 of 2020

consulting, edp, businessman, business people, notebook, meeting, consulting, consulting, consulting, consulting, consulting, meeting, meeting, meeting

Initial Consultation:
to determine the proper activity

laptop, office, hand, writing, business, document, contract, paper, education, work, notebook, data, pen, meeting, recruitment, agreement, paperwork, office, business, business, business, business, business, contract, contract, education, work, meeting, meeting

Preparation of Incorporation Documents in Notary

company incorporation Indonesia - DITJEN AHU

Registration with the Ministry of Law and Human Rights

Tax Identification Number

Registration of Corporate Tax Identification Number (NPWP)

dispute resolutions

Finalizing and Acquiring Business ID & Permit

GENERAL BUSINESS PERMIT FOR COMPANIES IN INDONESIA

Decree by the Ministry of Law and Human Rights

Upon incorporation, Companies are required to obtain a decree issued by the Ministry of Law and Human Rights of Indonesia. the issuance involves the following stages:

  • Company name reservation: before the incorporation, the intended company name should be reserved and later be approved by the Ministry to ensure compliance upon Company Name as in accordance with the law.
  • Documents submission: founders/shareholders are required to submit the incorporation documents: identity of the shareholders, board of directors and board of commissioners, Articles of Association of the company, and the Deed of Incorporation.
  • To submit  the incorporation documents, the notarial deed is submitted through the system of the Directorate General of General Legal Administration under the Ministry of Law and Human Rights of the Republic of Indonesia.

The Company is required to register for number tax identification number from the regional Tax Office where the Company has its address be registered. 

The Company will later be compulsory to apply for Business Registry Number, commonly known as NIB through the Online Single Submission (OSS) Indonesia. The system is aimed at simplifying business licensing process. The issuance of NIB will be determined by business activities registered based on the Article of Association.

The process is done through several steps as follows:

  • Registration
  • Input of Business Data (including the Business Activity based on the Classification system applied in Indonesia/KBLI)
  • Verification
  • Documents: in certain KBLI, NIB is required to be accompanied with certain licensing documents to ensure its validity and activation status.

In Indonesia, obtaining an environmental license is a crucial aspect of the business establishment process, especially for industries that may impact the environment. Under the Online Single Submission (OSS) system, environmental licensing is inclusively integrated. Depending on the type of business and its potential environmental impact, businesses may need to obtain an Environmental Impact Assessment (Amdal) or Environmental Management Efforts and Environmental Monitoring Efforts (UKL-UPL).

For certain business activities, based on the qualifications, licensing documents are required to be fulfilled through the OSS-RBA system. In Indonesia, the Online Single Submission (OSS) system features a module known as Risk-Based Approach (RBA) for business licensing. This approach is designed to streamline the licensing process by assessing potential risks associated with different business activities, enabling a swift licensing process based on the risk classification of the business.

Licensing Requirements are as follows:

  • Low-Risk Business: Businesses deemed low-risk might only require a simplified business license and may not need extensive environmental or operational permits. In this category, NIB is sufficient.
  • Medium-Risk Business: Medium-risk businesses are divided to Medium-Low Risk and Medium-High Risk. This classification may need to submit additional self-declared standard certificate, including basic environmental compliance.
  • High-Risk Business: Those categorized as high-risk will be subject to more stringent requirements, including detailed environmental assessments (AMDAL) and various business licenses/permits.

In Indonesia, the structure of a company can vary widely depending on the type of legal entity and the nature of its business activities. Here are the commonly implemented company structure in Indonesia:

For Limited Liability Company:

  1. Requires at least two shareholders and a maximum of 50;
  2. Classify Authorized Capital, Issued and Paid-Up Capital;
  3. Requires to fulfill the Paid-up capital as stipulated by law;
  4. Determine the registered address (domicile) of the Company, period of incorporation, and business activities following KBLI classification;
  5. Has at least 1 (one) Director and 1 (one) Commissioner; and
  6. Shall the Company has Board of Directors and Board of Commissioners, then the President Director and President Commissioner shall be appointed.

Foreign Director in a PT. PMA (Foreign Limited Liability Company) is required to apply for Limited-Stay Permit for Work/Work Visa - commonly known as KITAS in Indonesia

Why Choose Us?

Expert Guidance and Compliance

Our legal services ensure expert guidance and compliance with both local and international regulations, facilitating a smooth and lawful establishment of PT PMA and PT PMDN.

Strategic Legal Counsel

Our legal expertise spans diverse areas, offering strategic counsel in taxation, collaboration with local partners, and comprehensive legal protection, enhancing the overall success and sustainability of your business ventures.

Efficient Ownership Structuring

We streamline the ownership structuring process, providing efficient solutions for both foreign investors (PT PMA) and Indonesian citizens (PT PMDN), fostering ease of management.

Get Started!

Our dedicated team is ready to assist you and providing the necessary legal support to address your concerns in accordance with Indonesian law.

logo Andalan

At Andalan Consulting, we prioritize the confidentiality of your personal data and will take all necessary measures to protect it in accordance with the laws of Indonesia and the your country as detailed in our Privacy Notice.

Scroll to Top