How to Register a Company in Indonesia: Your Complete Guide to Business Setup

Indonesia’s 2024 economic climate presents a mix of opportunities and challenges for foreign investors. While the country continues to display resilience, with GDP growth projected at 5.1% for the year, there are headwinds stemming from a slowing global economy and fluctuating commodity prices. However, the government’s commitment to attracting foreign investment, coupled with robust domestic demand and a young, digitally savvy population, makes Indonesia a promising destination for long-term growth.

However, navigating the intricacies to start a company in Indonesia can be a daunting task.

This comprehensive article will guide you through the process, demystifying the steps involved and providing valuable insights to ensure a smooth and successful setup.

What is Company Registration?

Company Registration is the process of establishing your business as a recognized entity in Indonesia that involves going through the legal process. Operating legally entails meeting various requirements and acquiring the appropriate licenses and permits.

Consider it as the official documentation, like a birth certificate, that authorizes your company to legally function and conduct business operations. It’s a multi-step journey that involves fulfilling specific requirements set by the Indonesian government to establish a proper legal entity to start business activities.

Should I register my business to open a company in Indonesia?

The answer is yes. You should register your business in Indonesia is a legal necessity to avoid severe penalties like fines or deportation. It also boosts your company’s credibility and trustworthiness, opening doors to financial services and potential local investment gateway.

Moreover, registering as a limited liability company (PT) shields your personal assets from business debts, providing a safety net for your finances. While navigating the process can be complex, seeking professional assistance ensures compliance and streamlines your entry into the Indonesian market.

How do I check if a company is registered in Indonesia?

To ensure you’re dealing with a legitimate entity, it’s vital to verify companies through Indonesia’s official company registry. The Ministry of Law and Human Rights has made this process straightforward with the SIMBA system (Sistem Informasi Manajemen Administrasi Badan Hukum), a comprehensive database of registered companies in Indonesia.

Foreign investors can visit the official website of the Ministry of Law and Human Rights ( AHU ). Locate and access the SIMBA platform within the website.

After that, you may search for your PT PMA Company or PT you registered. You have a few options to find the company you’re looking for:

• Company Name and Registration Number
• Registered Address
• Director(s) and Shareholders
• Date of Establishment
• Company Status (active or not)

Do I need a company registration number?

Yes, in Indonesia, companies must have business registration number (Nomor Izin Berusaha). Upon successful registration, your company will be issued a unique Business Identification Number (NIB), which serves as your company’s official identifier.

What is NIB?

NIB ( Nomor Induk Berusaha or Business Registration Number ) is a new policy through Presidential Regulation Number 91 of 201. With NIB in place, entrepreneurs are no longer required to endure the lengthy and complex procedures associated with acquiring various business permits such as SIUP, IUI, TDP, and others. Officially effective since May 2018, NIB streamlines the process, making it easier for entrepreneurs to obtain the necessary documentation.

Read more about NIB here: What is NIB? Why Business Identification Number Essential for PT PMAs

Where to register a corporation?

The primary authority responsible for every new company registration in Indonesia is the Ministry of Law and Human Rights (MOLHR). However, the process also involves interactions with other government agencies, such as the Investment Coordinating Board (BKPM) and the Online Single Submission (OSS) system.

How to Incorporate a Company in Indonesia? 7 Steps to Register a Company in Indonesia

While the specific requirements and procedures may vary depending on the type of business entity you choose, here’s a general outline of the 7 steps involved in company incorporation in Indonesia:

Choose a Business Structure

PT PMA (Foreign Investment Company)

The foreign-owned companies are ideal for foreign investors seeking to establish a presence in Indonesia. The PMA company in Indonesia allows foreigners and international business ownerships to get various benefits.

Also read: What is a PMA Company in Indonesia?

PT (Local Company)

PT or Limited Liability Companies are suitable for Indonesian citizens or entities looking to set up a business. It requires at least two Indonesian shareholders and directors.

Representative Office

This type of company is a liaison office for foreign companies to conduct market research and promote their products/services. It cannot engage in direct sales or generate revenue.

Reserve a Company Name

• Check Availability: Conduct a thorough search to ensure your desired company name is unique and not already registered.
• Submit Application: Reserve your chosen name through the online system of the Directorate General of General Legal Administration (AHU).

Prepare Company Documents

• Articles of Association: This legal document outlines the company’s purpose, structure, and operational guidelines. A public notary must notarize it.
• Other Documents: Depending on the business structure, additional documents may be required, such as shareholder agreements, domicile letters, and identification documents.

Obtain Approval from The Ministry of Labour and Human Resources

• Submit Application: Submit the completed company documents to the Ministry for approval.
• Processing Time: The approval process typically takes several weeks.

Register with OSS System

• Create Account: Register your company on the OSS system and obtain a Business Identification Number (NIB).
• Obtain Licenses and Permits: Depending on your business activities, you may need to apply for additional licenses and permits through the OSS system.

Fulfill Other Requirements

• Tax Registration: Obtain a Taxpayer Identification Number (NPWP) from the local tax office.
• Open Bank Account: Open a corporate bank account in the company’s name.

Commence Operations

• Obtain Necessary Business Licenses: Ensure you have all the required licenses and permits before commencing business operations.

How Do I Register a Company Online?

• OSS System: The Indonesian government has streamlined the company registration process through the OSS system, allowing you to complete most of the procedures online by filling the form.
• For document submission, while some documents may still require physical submission, the majority can be uploaded through the OSS system.

How Much to Register a Company in Indonesia?

• Registration Fees: The cost of registering a company in Indonesia varies depending on the chosen business structure, legal and notary fees, and other associated expenses.
• Capital Requirements: PT PMAs have minimum capital requirements, which also vary based on the business sector.

Registering a Company Without Local Shareholders

• Special Purpose Vehicle Company: If you don’t have local shareholders, you may be able to establish a special purpose vehicle (SPV) company in certain sectors, allowing 100% foreign ownership.
• Consult with Experts: It’s crucial to seek professional advice from experienced consultants like Lets Move Indonesia to explore the best options available for your specific situation.

Frequently Asked Questions

What is the difference between Indonesian LLC or Ltd?

In Indonesia, there’s no exact equivalent to the “LLC” or “Ltd” used in some other countries. However, the closest counterpart is the Perseroan Terbatas (PT), which translates to “Limited Liability Company.”

A PT offers limited liability to its shareholders, meaning their personal assets are generally protected from the company’s debts. There are two main types of PTs:

PT PMA (Foreign Investment Company): Allows for foreign ownership, subject to specific regulations and minimum investment requirements.
PT (Local Company): Fully owned by Indonesian individuals or entities.

What registration certificates do I need to open a trading company?

To open a trading company in Indonesia, you’ll need several registration certificates and licenses, including:

Business Identification Number (NIB): Obtained through the Online Single Submission (OSS) system, it serves as your company’s unique identifier.
Trading Business License (SIUP): Specific license for trading activities, also obtained through OSS.
Other Licenses: Depending on the specific goods you trade, you might need additional licenses, such as import/export licenses or permits for specific products.

Why do we need an Indonesian partner?

In some sectors restricted by the Negative Investment List, foreign investors are required to partner with an Indonesian individual or entity to establish a PT PMA. This is typically to promote local participation and knowledge transfer. However, many sectors allow 100% foreign ownership.

How long does it take to register a company?

The company registration process in Indonesia typically takes several weeks to a few months. The exact duration depends on factors such as the chosen business structure, complexity of the application, and government processing times.

Got other questions?

Navigating Indonesian company registration can be complex. Feel free to ask us any further questions you have. Lets Move Indonesia has a team of experienced consultants ready to provide personalized guidance and support, ensuring a smooth and successful company setup.

Set up a Company in Indonesia with Lets Move Indonesia

Registering a company in Indonesia may seem like a challenging endeavour, but with the right guidance and preparation, it can be a smooth and successful process. By following the outlined steps, understanding the legal requirements, and seeking professional assistance when needed, you can lay a strong foundation for your business venture in this thriving market.

Thorough planning and adherence to regulations are key to a seamless experience opening business in Indonesia. Lets Move Indonesia is your trusted partner in navigating the complexities and unlocking the vast potential of the Indonesian market. We are boasting offices across Jakarta and Bali offering business consultancy services to ensure all details are accomplished and well organized. Start surfing the local market by opening a company in Indonesia smoothly by contacting our professionals now.

Click here to start navigating your PT PMA Company in Indonesia!

Disclaimer: This article provides general information on company formation in Indonesia. For specific legal advice tailored to your situation, please consult with qualified professionals.