Indonesia Company Registration

1、Indonesia has international maritime transportation lines
 Located in Southeast Asia, Indonesia is strategically located and controls key international maritime traffic routes and important international trade routes such as the Straits of Malacca. Composed of 17,506 islands, Indonesia is the largest archipelagic country in the world and is known as the “Land of 10,000 Islands”.
 2、Indonesia has a lot of room for investment and development
 In recent years, the economies of India, Vietnam, and Indonesia have been growing rapidly, and the huge room for development is recognized by investors as three countries in Southeast Asia worth investing in.
 3、Indonesia has a large population dividend
 Indonesia is the fourth most populous country in the world, with a population of over 280 million people. At the same time, Indonesia has a relatively large young labor base and a large demographic dividend.
 4. Indonesia has a friendly political and business environment
 Indonesia has a stable political situation, the capital city is Jakarta, and the legal system is relatively sound and the investment environment is good.
 5、Indonesia is rich in natural resources
 Indonesia has large reserves of coal, tin, nickel, bauxite, copper, etc. The mining industry is also an important source of export earnings and fiscal revenue.
 6、Indonesia attaches importance to attracting foreign investment
 With the deepening of the RCEP agreement, the relationship between China and Southeast Asia is getting closer and closer, and trade flows are becoming more and more convenient, so the scale of Chinese investment in Indonesia is gradually expanding.
 7、Indonesia’s economic development potential is high
 Indonesia’s economic growth rate has been maintained at around 5% for many years, ranking among the top among the major economies in the world; Indonesia is also the largest economy in ASEAN and an important member of G20.
 8、Indonesia Corporate Tax Advantage
 ①. New or expanded investments in Indonesia in the form of registered limited companies and cooperatives are entitled to income tax benefits.

Income tax benefits include:

30% of the net operating profit on the total investment is payable over 6 years, which is 5% per year.

● Accelerated repayment and depreciation.

The income tax paid by foreign enterprises for dividends is 10%, or a lower rate is adopted in accordance with the current agreement on avoidance of double taxation.

● A longer loss recovery period than 5 years, but not more than 10 years.

②. In order to facilitate business, especially in the area of agricultural development and its competitiveness, the government has eliminated the income tax attached to major agricultural products.

There are 3 major types of company structures you can choose from during the Indonesia company registration process. The main ones are: limited liability company (PT), foreign limited liability company (PT-PMA) and representative office.

Limited Liability Company (PT)

If you want to register a 100% locally owned company in Indonesia, the most suitable business entity would be Perseroan Terbatas (PT).

The business entity allows only 100% ownership by Indonesian citizens.

If you are a foreign investor and the nature of your business requires your company to be 100% locally owned, you will need a nominated company to act on your behalf. In such a case, EnterpriseBang will act as your local Indonesian shareholder and director. Our legal team will prepare a nominee shareholder agreement to be signed by all parties stating that Wan Enterprise has no authority or decision-making power in your company.

The PT can be set according to the following requirements:

-2 shareholders of any nationality

-1 local resident director

-1 Commissioner of any nationality

Paid-in capital depends on whether you are registered as a small, medium or large company

Foreign Investment Limited Liability Company (PT PMA)

If you are a foreign investor wishing to set up a company in Indonesia, Penanaman Modal Asing (PMA) is recommended. As long as your business activities are not prohibited by the Indonesian government, you will have 100% guaranteed full control of the foreign limited liability company (PT PMA).

In order to conduct business in Indonesia, you will need to obtain foreign investment approval from BKPM, which will require you to submit a US$1,000,000 investment plan and deposit a minimum of US$200,000 in equity.

If required, Manetic will provide you with a nominated permanent director. As usual, our legal team will prepare a comprehensive nominee director agreement for all parties to sign. This is to ensure that our nominated director will not interfere with your business and that the following requirements are met in order to complete the registration of a foreign company in Indonesia:

-2 shareholders of any nationality

-1 local resident director

-1 Commissioner of any nationality

-Equity US$200,000

If you plan to start a business outside of the negative investment list, Wan Enterprise recommends setting up a PT PMA in Indonesia, where you have full control over the Indonesian company, despite the large paid-in capital before incorporation.

Representative Office

The Representative Office can only conduct market research and marketing for the parent company and is not allowed to enter into contracts, sales agreements and earn revenue in Indonesia. This would be a good option for foreign companies seeking to expand their market before settling in Indonesia.

Representative office licenses are valid for two years, so some foreign investors prefer to establish a representative office in Indonesia before setting up a PT or PMA to gain local influence. Please note that foreign companies are currently not allowed to establish a branch office in Indonesia.

Before registering your company, Manetic will understand your business activities and recommend the appropriate legal entity form for you.

Step 2: Check that you meet all the requirements

Once you have selected the right business entity, you will need to check that you meet all government requirements, which vary depending on the type of company.

If you would like to learn how to check the availability of Indonesian company names, you can visit the official company directory on the government website.

After that, you need to get the permission for the name through a notary public. Manetic will assist you in appointing a notary who will first pay IDR 200,000 at a local bank to get the permission of your desired name through the electronic processing system.

The notary will be provided with a code and a payment receipt confirming the transaction, which will then be used to submit an online booking for the name to the Indonesian Ministry of Law and Human Rights.

Step 4: Prepare all necessary files

We will prepare the necessary documents for you to register your company in Indonesia, depending on the structure of your company.

For foreign limited liability companies (PT), the required documents include:

-Provide a copy of the shareholder’s passport if the shareholder is a natural person, or a copy of the legal business documents and director’s passport if the shareholder is a legal entity.

-Company Registered Address

-To purchase physical office space, you will need to submit a lease agreement or purchase deed.

Then, your file must be notarized with the help of a notary.

Step 5: Apply for a deed of establishment and proof of residence

The MEP will then proceed to apply to the Ministry of Law and Human Rights for the creation of a deed, which must be done before 60 days after the creation of the deed, and approval will take place within 2 weeks of the application.

You will then receive a certificate of domicile from the local government, as well as other documents required to start your business in Indonesia.

For businesses with a physical presence in an office building in Indonesia, you must first apply for a Construction Management Residence Certificate from the Construction Management Office.

Step 6: Apply for a business license (SIUP)

Next, MSE will assist your company in obtaining a SIUP, or permanent business license, from the Ministry of Trade. This is necessary for non-facility businesses involved in trading. The license will include information about the individual responsible for the business and the nature of the business activity.

Step 7: Apply for Taxpayer Registration Number (NPWP)

We will help your business register with the local tax office where you are registered to obtain a tax identification number (NPWP). Then, our dedicated team of accountants will assist you in meeting all tax filing and financial reporting requirements to maintain compliance.

Step 8: Apply for a business license (SIUP)

The company is then required to apply to the Ministry of Trade for a permanent business license (SIUP), which constitutes the business license for non-facilities companies engaged in trading and contains detailed information about the company’s activities and the person responsible for the company.

Step 9: Register your company in OSS

After completing the above steps, EnterpriseHelp will continue to register your company in the Single Submission System (OSS).

Upon completion of the registration process, you will receive a Certificate of Incorporation, which will also contain the company’s Business Identification Number (NIB).

Upon completion of the registration process, you will receive a Certificate of Incorporation, which will also contain the company’s Business Identification Number (NIB).

Step 10: Apply for a Certificate of Incorporation (TDP) and related permits

Depending on your business activities and capital, you will also need to apply for the appropriate business license to start your business in Indonesia.

You can also apply or register for other necessary systems locally, including applying for health insurance for your company’s employees, registering for social security and VAT collection.

Step 11: Open a Business Bank Account

Once the company is established, we will assist you in opening a corporate bank account with a reputable bank.

We will use our extensive banking network to open a corporate banking account with a local or international bank of your preference. Then, you will be able to start your business.

The entire Indonesia company registration can be done without you having to travel to Indonesia.

We have prepared a step-by-step guide for you to successfully register your Indonesian company, which includes all the steps, as well as the Indonesian company.

After registering your Indonesian company with the Indonesian Business Registry, you will receive your new company’s documents, including the Certificate of Incorporation, Memorandum and Articles of Association, and the Register of Directors and Shareholders.

The Indonesian company registration documents will be in Indonesian, and Manetic will assist you to have the documents translated by certified translators.

If you want to start your business in a shorter period of time, we recommend you to consider buying a ready-made company in Indonesia, and if you choose this option, you can have an Indonesian company and a local bank account in just 6 weeks.