How to incorporate company in Indonesia?
Before you choose to incorporate company in Indonesia, Tetra Consultants advises you to read through this guide to fully understand the steps required for successful incorporation.
Simply put, we can break down each engagement into four different phases:
- Planning & strategy
- BKPM foreign investment approval
- Incorporation & bank account opening
- Staying compliant
To incorporate Indonesia company, there are multiple requirements and steps to take so that the newly-established company will be legally compliant. Tetra Consultants will advise you of all regulatory requirements to ensure all parties are clear of the steps to take throughout the engagement.
On average, you can expect to own an Indonesia wholly foreign-owned company (PT PMA) and a local Indonesia corporate bank account within 12 to 14 weeks depending on the business activity and corporate structure.
If you are looking for a fast solution to conduct business or sign contracts in Indonesia, Tetra Consultants recommends you to consider purchasing a local shelf company and start business within 6 weeks.
Planning & strategy
- Our team of experts will recommend the most suitable business entity depending on your business goals and activities. Tetra Consultants will advise you whether the intended business activity can be wholly foreign-owned, partially foreign-owned or fully local-owned as per the Negative Investment List.
- If the business requires Indonesian citizens to own the company partially, Tetra Consultants will act as your nominee shareholder. Our legal team will prepare all required legal nominee agreements to ensure we do not intervene in your business.
- Assuming your business does not fall under the Negative Investment List, you will be able to register a wholly foreign-owned company. Tetra Consultants will provide you a local registered office address and local nominee director.
- On your side, you will be required to appoint 2 shareholders of any nationalities and 1 commissioner of any nationality. Indonesia government allows the appointment of corporate shareholders.
- Once the corporate structure is finalized, Tetra Consultants will reserve your preferred company name with the Indonesia Company Registry. Our legal team will draft the articles of association and other required legal documents in both Bahasa Indonesian and English.
BKPM foreign investment approval
- At the same time, Tetra Consultants will prepare a comprehensive investment plan to secure BKPM foreign investment approval. The investment plan must include minimum expected investments of US$1,000,000 in Indonesia. In addition, 25% of the expected investments stated in the investment plan should be paid up.
- Tetra Consultants assists you to open a capital account with a local Indonesian bank. Once the account is opened, you are required to inject the minimum paid up capital and supply bank statements as proof to Tetra Consultants. This process will take approximately 2 weeks.
- Once above is completed, Tetra Consultants will submit a quality application to BKPM to secure the foreign investment approval. Upon approval, you will be presented with an in-principle business license for 3 years.
Incorporation & bank account opening
- Thereafter, Tetra Consultants will immediately proceed to register the wholly foreign-owned company with the Indonesia Company Registry.
- After the company is officially registered, Tetra Consultants will courier the Certificate of Incorporation, Memorandum & Articles of Association, Register of Directors/Shareholders and other corporate documents to your’ preferred addresses.
- These documents will be in Bahasa Indonesian. If required, Tetra Consultants will supply you the documents in their preferred language by working with a certified translator. This process will take approximately 8 weeks.
- Our banking team will immediately liaise with the Indonesian bank to convert your capital account into a corporate trading bank account. This process will take approximately 1 week.
Staying compliant
- After successful company registration, Indonesia government requires at least 2 employees to be registered with Healthcare and Social Security BPJS. Tetra Consultants will complete the registration within 2 weeks.
- You can be confident you are in the best hands when Tetra Consultants undertakes your Indonesian company’s accounting and tax services.
- Tetra Consultants will timely prepare your firm’s financial statements, corporate tax returns and bookkeeping on your behalf.
- Tetra Consultants will complete all annual filings and tax returns for your company before the stipulated deadlines set out by the government.
- If you plan to be physically present and working in Indonesia, Tetra Consultants will secure an Indonesian work permit for you. Some of the documents required are CV, highest academic qualifications, medical certificates, expected monthly income and job scope in Indonesia.
- Tetra Consultants will advise on the most suitable work visas as well as the expected timeline of each application.
Contact us to find out more about Indonesia company registration. Our team of experts will revert within the next 24 hours.
FAQ
Can foreigners register a company in Indonesia?
- Yes, as of 5 March 2021, changes to omnibus law in Indonesia have opened up most business classifications to 100% foreign ownership.
What are the different types of Company structures available in Indonesia?
- The three most common types of legal business entities in Indonesia for a foreign-owned limited liability company is known as a PT PMA (Perseroan Terbatas Penanaman Modal Asing), whereas a domestically owned limited liability business is known as a PT (Perseroan Terbatas), depending on the nature of your business, foreigners starting a business in Indonesia can opt for a branch or representative office (RO).
What are the minimum requirements for setting up a PT PMA in Indonesia?
- The incorporation of a PT PMA requires at least two shareholders of any nationality, a president commissioner, and a president director along with the equity capital requirement of US$200,000.
What is the tax implication for a business setup in Indonesia?
- Businesses in Indonesia are subjected to a corporate income tax rate of 25% for both global and local income.
What are the documents required to start a company in Indonesia?
- To proceed with company registration in Indonesia, for a start, you are required to provide the notarized passport copy, proof of address, CV, and proof of income of the individual director and shareholder of the company, lease agreement, or deed of purchase for a physical office.
- At a later stage of formation, you will be required to have a domicile letter, deed of establishment, proof of approval of business registration number (NIB), tax identification number (NPWP), taxable entrepreneur confirmation (PKP).
- If the shareholder is another entity, we will require the Certificate of Incorporation and Memorandum and Articles of Association of the corporate shareholder.
- Once Tetra Consultants receives the above, we will review the documents and provide you with an updated due diligence checklist with the list of outstanding documents.
