Indonesia presents attractive opportunities to foreign investors looking to do business in emerging markets. To legally run a business in indonesia as a foreigner, you need to set up a PT PMA. This entity allows you to generate revenue streams and profit from business conducted within the Indonesian territory.
Registering a PT PMA provides companies with foreign investors with the same rights and responsibilities as a local company in Indonesia. This includes the ability to build on and use land, participate in local tenders and sponsor visas that allow foreign employees to live and work legally in Indonesia.
Read on to find out more about the requirements and the steps you need to take to register a PT PMA in Indonesia.
What is a foreign-owned company in Indonesia?
All foreign companies in Indonesia are PT PMAs (Perseroan Terbatas Penanaman Modal Asing) which means a “limited liability company with foreign direct investment.”
A company is a PMA if a foreign national or foreign company holds any shares. It doesn’t matter if it’s 100%, 51% or even 1% – if there are foreign shareholders, it is a foreign-owned company.
People commonly believe that having local partners makes company registration smoother, but this is not true. In fact, it only really makes a difference if the local partner owns 100% of the shares.
Benefits of incorporation in Indonesia
Upon completion of the establishment process, you can start running your business in Indonesia and conduct activities such as:
- Buy property and other assets on behalf of your company
- Register your products (see cosmetics, food, IT equipment)
- Obtain industry licenses, such as import license to import goods to Indonesia
- Start other preparations for your operation, such as but not limited to hiring staff, preparing office renovations, etc.
- Proceed to obtain work and stay permits for foreign employees in your company
Foreign company ownership limitations
As of 5 March 2021, changes to omnibus law in Indonesia has opened up most business classifications to 100% foreign ownership.
There are now 45 business classes that maintain a partial limitation on foreign ownership. The proportion of these companies that are open to foreign ownership depends on the business line in question.
A total of 58 business classes remain closed to foreigners. These areas of business are reserved for small to medium businesses with 100% domestic ownership and include:
- Small construction firms
- Small accommodation services (guest houses, villas, 1 star hotels)
- Services such as laundrettes, barbershops, beauty salons)
- Retail that is not online or in a department store
- Business types under national protection such as the cultivation of marijuana
Requirements for setting up a PT PMA in Indonesia
1 Paid-up capital
The minimum paid-up capital for a foreign-owned company in Indonesia is Rp. 10 billion (~700,000 USD).
Shareholders will have to sign a capital statement letter saying that the shareholders have sufficient funds for the capital requirements.
2 Structure of a foreign owned company in Indonesia (PT PMA)
Every limited liability company in Indonesia must have at least two shareholders. They can be individuals, corporate shareholders, or both.
Commissioners and directors
You must appoint at least one commissioner and one director. The commissioner is the supervisor of the director(s) and can be a non-resident.
The directors are in charge of the daily operations of the company. At least one director should be a citizen or a resident of Indonesia and must have a tax card (NPWP).
The foreign director may apply for a work permit after the incorporation of the company. While waiting for the work permit, the company should appoint a local director, or professional director service.
Read more about commissioners and directors of a PT PMA
3 Business location
Indonesia is a decentralized country. A lot of the government’s work takes place at the district level. Because the local district is in charge of local permit approvals, it is important to choose your business location before starting the registration process.
If you would like to find the best district of Indonesia to run your business, get in touch with one of our experts for free advice.
Requirements for your company address
Different areas of Indonesia have different rules for the registered address. In Jakarta, the address must be in a building with a building permit (IMB) that allows the operation of an office.
Deciding to use a virtual office
A virtual office can significantly lower your overhead costs. You also won’t have to worry about building permits and if you can use your address as an office.
Completing the registration for your business can also be much faster when you use a virtual office service. Emerhub provides a virtual office service in Jakarta and Bali. We can register your business in five days if you use our virtual office service.
You can maintain your virtual office as the official address even after you move into a physical office. This also saves you from having to update your Articles of Association.
Read more on finding an office space in Jakarta or Bali.
How to set up a PT PMA in Indonesia
The establishment process for most business lines goes through a centralised system called One Single Submission (OSS). This has made registration easier and faster. The registration of a PT PMA used to take 10 weeks, with the OSS, registration can be completed in 1 to 2 weeks if your business does not need additional licenses.
The step-by-step process for PT PMA registration
Step 1: Deed of Establishment
Emerhub will check your planned business activities and recommend the business classification (KBLI) that will work best for you. It is important to choose the right classification for your business so you won’t run into any issues in the future. The Ministry of Law and Human Rights ratification of the Deed of Establishment will be obtained during this step.
Step 2: Tax Registration
Upon the establishment of the company, the next step is to get a Tax Identification Number (NPWP) from your local tax office for your company. As soon as you are a registered Taxpayer, you must adhere to several compliances.
Step 3: Identification Number to Operate/Nomor Induk Berusaha (NIB)
Next is the registration of your legal entity in the One Single Submission System (OSS). After this, you will receive your company’s Identification Number to Operate (NIB).
A NIB is a unique number that identifies your company profile in Indonesia. It also serves as:
- Your import license (previously API-U)
- Customs Identification Number (NIK)
- Your business registry number (previously TDP)
The NIB also automatically registers your PT PMA under Health and Social Security System (BPJS Kesehatan dan BPJS Ketenagakerjaan)
Step 4: Operational License/Commercial License
The business’ operational license/commercial license is usually issued on the same day as NIB. This is applicable if there are no other requirements for your business, for instance, with trading and consulting businesses. However, other business activities may need additional fulfillment. In cases like this, it can take months before the government grants your business a license. For example, fintech companies in Indonesia need an OJK license.
Timeline of foreign-owned company registration in Jakarta
|Process||Timeline in working days|
|Approval of company name||1|
|Minute of the Deed of Establishment|
|Deed of Establishment||1|
|Ratification from MOLHR on Deed of Establishment|
|NIB and Commercial License/Operating License||1|
The above timeline applies to businesses registered in Jakarta. Registration usually takes longer in other places and would depend on the local government of that area. Please also note that the timeline above may change depending on the specifics of your business.
After the registration process, Emerhub can facilitate opening a bank account for your company. We have a special arrangement with several banks, and you will not need to make a personal appearance at the bank.
Accelerated Company Registration Process in Jakarta
The decentralised nature of Indonesian government means that there are significant differences in ways the local permit are processed. Even within Jakarta, which itself is divided into five different municipalities, the process varies from one to a couple of weeks.
Emerhub Indonesia has built a proprietary online system that cuts down several of the time-consuming application processes. This allows us to provide the fastest company registration service in Indonesia. As long as you are using Emerhub’s registered address and your industry doesn’t need additional industry licenses, the registration will take just five working days.
Alternatives to company registration in Indonesia
Buying a ready-made shelf company
To skip the whole registration and establishment process, you can purchase a shelf company. Doing this will allow you to issue invoices, sign contracts, or participate in tenders immediately.
However, make sure the shelf company has the necessary licenses for your business classification. Emerhub can provide you shelf companies or verify whether the shelf company you wish to buy has all the required permits.
Learn more about shelf companies in our previous article about buying a shelf company in Indonesia
Nominee company in Indonesia
You may have come across the term “nominee shareholder” when talking to other foreign investors doing business in Indonesia. The phrase refers to using a local person or entity to hold shares on your behalf. While common in many countries, in Indonesia it does not offer you any legal protection. The “nominee” does not have any obligation to hand over the shares to you.
If you operate in an industry where the foreign ownership is restricted, there are better solutions that are both legal and protect your assets. The specific legal arrangement depends on your planned activities. Reach out to Emerhub to discuss your specific case.
Representative office in Indonesia
A PT PMA is not the only option for someone who wants to conduct business activities in Indonesia or simply just wants to relocate personally. If you want to set up an office in Indonesia but do not intend to generate income from local activities, you can open a representative office instead. If you’re looking to personally relocate to or hire employees in Indonesia, you can use an employer of record service.
Outsourcing business processes in Indonesia
Setting up a legal entity is not always the fastest or the most cost-effective way to enter a new market. If you wish to start operating immediately or to test the market first, using an outsourced operations model would be the best option for you.
It allows you to do business activities like earn revenue, provide services, and conduct sales without establishing a local company or meeting the minimum foreign investment requirements.
Some of our services include:
Read more on how to enter emerging markets by using outsourcing services
How to start with company registration in Indonesia
If you have any additional questions, feel free to reach out to our consultants via [email protected] or by filling in the form below. Or proceed straight to company registration. We also set up companies in Vietnam, the Philippines, Myanmar, Bangladesh, and Pakistan.
LeonJanuary 5, 2013
My company’s name Phyto Science Sdn Bhd (PT) in Malaysia, we would like to set up a packaging factory to supply goods to our country stockist in Indonesia, we need to register a PT and open a bank rekening in Indonesia. please give us a consultation or guideline to proceed.
LauriJanuary 5, 2013
We have sent you a private email to discuss the specifics of your company.
Thank you for contacting us!
ThenFebruary 5, 2013
Hi. I am foreign investor from HongKong and want to set up a company in Jakarta Indonesia. I want to register a PT in Indonesia but I am foreigner. is it different process when I do it and when an Indonesian register a PT? I know that if i want to business in Indonesia I need a local partner. Is there any ways for me to do check with Indonesian courts for their past activities, as I heard alot of fraudulence occur in Indonesia if foreigners are not careful. Please help me with some guides on how a local and and international business set up a PT in Jakata. Where can i get information on this and are there records in the court?
Your help will be very much appreciated.
IndosightFebruary 5, 2013
It is possible to have 100% foreign owned business in Indonesia as long as your activities are not in the negative investment list. If they are, you will need local partners.
It is possible to check whether your local partner has been legally established, but other than that there is not much information you can receive. I advise to have local partners that you have met in person and know more about.
We have also sent you more details to your email.
Justin CheongJuly 2, 2013
Hi there! I am Justin and I wish to open a PT company based in Surabaya. I wish to open a Bubble Tea business in Surabaya. I have a few questions,
1.) If I am the director of the company, can I apply for KITAS myself and converting to a KITAP after 5 consecutive years?
2.) What are the requirements of opening a PT company in Indonesia?
3.) The time frame and documents needed for a PT company registration?
Could you advise me and furnish me with more details.
I can be contacted at
Thank you very much.
Dumitru POPERESNIUCSeptember 23, 2013
The company I work for is Alewijnse from the Netherlands with its Romanian office responsible for International activities of the group (business area: maritime electrical services). We would like to set up a Representative Office in Surabaya. In order to support our local shipbuilding projects and to facilitate knowledge transfer activities in Indonesia, we need to register a Rep.Office and in Indonesia. Would you please give us a guideline to proceed together with costs for your services and time schedule for them?
Thank you in advanc.
+40 731 560 946
Teng Hon YeongOctober 18, 2013
I would like to set up a Indonesian PT registered company, for general trading within the Riau Islands.
Kindly advise us on procedure and data need to be provided.
IndosightOctober 18, 2013
Thanks Teng, our consultant will be in touch with you very soon.
shahNovember 11, 2013
I would like to set up a Indonesian PT registered company, for IT business.
IndosightNovember 11, 2013
Thank you Shah for the inquiry! Our consultant will contact you ASAP with some additional questions and based on that will prepare detailed overview of the process and fees.
arleneJanuary 28, 2014
I would like to set up a Indonesian PT PMA registered company for medical instruments, so there’s any restricts on this business catagory.
And, can you tell me the differences between the principal license and permanent business license?
Waiting for your early reply, thanks very much.
IndosightJanuary 28, 2014
Are you going to import or manufacture medical instruments? You can send details to our email [email protected] so we can check what are the restrictions for your business activities.
Principal license is an approval of your investment so that you can get started in Indonesia and you need to acquire permanent business license once you are ready to fully operate.
eric19800509March 17, 2014
if i have already done the paid-up capital, when will i be supposed to pay the left registered capital as foreign investor?
IndosightMarch 17, 2014
The rest you are expected to pay as you realize your investment plan.
paekFebruary 1, 2016
If a PMA company and a foreign company invests together to form a JV, will the PMA’s capital regarded as “foreign” when there’s cap limit of foreign ownership(negative list)?
marlissaFebruary 8, 2016
Yes, the PMA Company is consider as a foreign shareholder.
Hope this helps! I also sent you an email for further information.
Chris HsiehMay 16, 2016
I’m Chris, and I would like to register a local PT, not PMA, company. Because I wont be able to invest $250,000 at the first year. I have read your info regarding to Nominee. My question is, if I use a nominee to register a local PT, will I be able to be the director of the company, even though I am a foreigner. After the company setup, I can apply for Kitas ?
Angeline TaniwanMay 24, 2016
Yes, you can but be informed that you have to put a minimum of 1 billion rupiah as paid up capital in your company article of association (Akta Pendirian), but since it is a local PT, you don’t actually need to inject this much. If you wish to know more and get our help for this, talk to our consultant by dropping us an email [email protected]
Tracy LeMay 18, 2016
My company is in Vietnam, we would like to do business in Indonesia but we don’t know which kind of company is the most suitable for us ? My company do design consultant . when we set up a company, what do we prepare for this? I’m so grateful àn hope your help!
Angeline TaniwanMay 24, 2016
First, you need to make sure if you want to generate income or not in here. If yes, then you need to establish PT/ PT PMA. If not, you can just established KPPA. You can talk to our consultant regarding this by kindly drop us an email to [email protected]