Indonesia is a rapidly growing economy with a population of over 270 million people. The country offers a number of opportunities for foreign investors, including a large and growing market, a young and educated workforce, and a favorable investment climate.
If you are considering investing in Indonesia, you will need to register a company. The process of company registration in Indonesia can be complex, but it is important to follow the correct steps to ensure that your company is properly established.
This blog post will provide you with a comprehensive guide to company registration in Indonesia. We will discuss the benefits of investing & starting a business in Indonesia, the different types of legal entities available to foreign investors & Frequently Asked Questions, the process of setting up a company, and the costs involved.
Benefits of Investing in Indonesia
| Benefit | Summary |
| Large and growing market | Indonesia has a population of over 270 million people, making it the fourth most populous country in the world. The country’s economy is also growing rapidly, with a GDP growth rate of around 5% per year. |
| Young and educated workforce | Indonesia has a young and educated workforce. The median age in Indonesia is 27 years old, and the literacy rate is over 90%. |
| Favorable investment climate | Indonesia has a relatively favorable investment climate. The government has made a number of reforms in recent years to make it easier for foreign investors to do business in the country. |
| Promotion of investment | The Indonesian government has a number of programs in place to promote investment, such as the Negative Investment List (Daftar Negatif Investasi) and the One-Stop Service (OSS) system. |
| Tax incentives | The Indonesian government offers a number of tax incentives to foreign investors, such as tax holidays and reduced corporate tax rates. |
| Infrastructure development | The Indonesian government is investing heavily in infrastructure development, which will create new opportunities for foreign investors. |
Large and growing market: Indonesia has a population of over 270 million people, making it the fourth most populous country in the world. The country’s economy is also growing rapidly, with a GDP growth rate of around 5% per year.
Young and educated workforce: Indonesia has a young and educated workforce. The median age in Indonesia is 27 years old, and the literacy rate is over 90%.
Favorable investment climate: Indonesia has a relatively favorable investment climate. The government has made a number of reforms in recent years to make it easier for foreign investors to do business in the country.
Different Types of Legal Entities
There are four main types of legal entities available to foreign investors in Indonesia:
| Legal Entity | Description | Advantages | Disadvantages |
| PT PMA (Foreign-owned Company) | A foreign-owned limited liability company. It is the most common type of legal entity for foreign investors in Indonesia. | Can own assets in Indonesia, raise capital from Indonesian investors, and employ Indonesian workers. | It is a more complex registration process than other types of legal entities. |
| KPPA (General Representative Office) | A non-profit office that is used to represent a foreign company in Indonesia. | Does not have the same legal rights as a PT PMA but can be a good option for small businesses that do not need to own assets or raise capital in Indonesia. | Limited legal rights. |
| KP3A (Representative Office for Business Trading) | A non-profit office that is used to represent a foreign company that is engaged in business trading in Indonesia. | Does not have the same legal rights as a PT PMA but can be a good option for small businesses that are engaged in import and export activities. | Limited legal rights. |
| BUJKA (Representative Office for Construction Company) | A non-profit office that is used to represent a foreign construction company in Indonesia. | Does not have the same legal rights as a PT PMA but can be a good option for small construction companies that are working on projects in Indonesia. | Limited legal rights. |
PT PMA (Foreign-owned Company): A PT PMA is a foreign-owned limited liability company. It is the most common type of legal entity for foreign investors in Indonesia. PT PMAs have several advantages, including:
- They can own assets in Indonesia.
- They can raise capital from Indonesian investors.
- They can employ Indonesian workers.
KPPA (General Representative Office): A KPPA is a non-profit office that is used to represent a foreign company in Indonesia. KPPAs do not have the same legal rights as PT PMAs, but they can be a good option for small businesses that do not need to own assets or raise capital in Indonesia.
KP3A (Representative Office for Business Trading): A KP3A is a non-profit office that is used to represent a foreign company that is engaged in business trading in Indonesia. KP3A do not have the same legal rights as PT PMAs, but they can be a good option for small businesses that are engaged in import and export activities.
BUJKA (Representative Office for Construction Company): A BUJKA is a non-profit office that is used to represent a foreign construction company in Indonesia. BUJKAs do not have the same legal rights as PT PMAs, but they can be a good option for small construction companies that are working on projects in Indonesia.
How to Register a Company in Indonesia
The process of setting up a company in Indonesia can be divided into three stages:
Stage 1: Pre-registration
- Choose a legal entity.
- Select company officers.
- Prepare the necessary documents.
Stage 2: Registration
- File the documents with the relevant government agencies.
- Obtain a taxpayer identification number (NPWP).
Stage 3: Post-registration
- Apply for a business identification number (NIB).
- Obtain other licenses and permits.
Costs of Company Registration in Indonesia
The costs of company registration in Indonesia vary depending on the type of legal entity you choose. However, the following are some of the main costs involved:
Government fees: The government fees for company registration in Indonesia are relatively low. The fee for registering a PT PMA is IDR 500,000.
Legal fees: The legal fees for company registration in Indonesia will vary depending on the law firm you use. However, the legal fees are typically between IDR 10 million and IDR 20 million.
Other costs: There are several other costs involved in company registration in Indonesia, such as the cost of obtaining a tax ID number and the cost of registering for a business license.