Company Formation

How to make FDI Company in Indonesia

The foreign Direct Investment Incorporation Progress

Pre-Incorporation Decisions

  1. Check the proposed type of business and activities whether it is open for foreign investment.
  2. Choosing the corporate name for reservation.
  3. Selecting a registered office and a resident agent for the service of the process.
  4. Identification of shareholders and/or initial directors.
  5. Decide the minimum paid up capital and the percentage of each shareholders.

Brief understanding of requirements

  1. Minimum 1 Commissariat and 1 director to be appointed
    – (1 director shall be ordinarily residing in Indonesia).
  2. Minimum 2 shareholders (companies or individuals)
    – 100% foreign – own possible for some sectors.
  3. Minimum 25% paid up capital from the authorized capital.
  4. Local Registered Office within Indonesia is required.

The procedures

Stage one – Reservation of Company name
  1. Reserving the desired company name by inquiring the personnel for Registry of Companies (ROC) in the Ministry of Justice and Human Rights.
  2. ROC will require a minimum of 2 working days to process the availability of the name.

 

Stage two- Execution of the Approval of FDI (PMA)/PMDN
  1. Upon approval by ROC, a set of application documents for FDI (IP PMA/PMDN Approval) will be prepared for directors and shareholders (proxy) signatures.
  2. Approval will require a minimum of 14 working days to process.

 

Stage three – Execution of the Incorporation, business registration certificate domicile and tax number documents
  1. Based on the IP PMA (Letter of Approval from the Investment Coordinating Board) a set of incorporation documents will be prepared for directors and shareholders (proxy) signatures for Deed of Establishment (DoE) and Article of Association (AoA).
  2. The form will be a limited liability company (LLC) denoted as PT (Perseroan Terbatas).
  3. The incorporation and others will require a minimum of 45 working days to process.
  4. If in FDI company do not have a local director then FDI company must process the stay and work permit for foreign director.

 

Stage four – Opening bank account, Company Registration, Legalization and State Gazette
  1. Attach documents (2-4) to open the Company’s bank account.
  2. Pay the minimum paid up capital prior to Legalization.
  3. All these documents will require a minimum of 10 to 15 working days to process.

LOCAL COMPANY

PT is the most popular form of company in Indonesia. Although the form of the company is fully intended for Indonesian citizens only, but for certain situations PT can also be owned by foreign investors. There are 3 forms of companies that can be chosen by foreign investors when they decide to expand their business to Indonesia: PT PMA, Representative Office, and local PT Company.

The minimum requirements for establishing a local PT company are as follows:

  • 2 shareholders
  • 1 Local director
  • 1 Commissioner

This form of company is only allowed 100% ownership for Indonesian citizens.

Company Size PT Local

To establish a local PT company you have to invest some money, the range is from Rp 50,000,000 to over Rp 10,000,000,000. Based on the amount of paid up capital, the local PT company is divided into 3 sizes:

  • Small: above Rp 50,000,000 – Rp 500,000,000
  • Medium: above Rp 500,000,000 – Rp 10,000,000,000
  • Big: above Rp 10,000,000,000

 

Can a Local Company Recruit Foreign Employees?

Yes it can. For a local candidate company (foreign ownership) the size of the company required is the media at least, with paid up capital above Rp 1,100,000,000. Find out how to get a business visa and work permit in Indonesia.

The process of setting up local PT in Indonesia

Establishing a local PT company will take approximately 47 working days. You can check the detailed process below:

The process of Establishing Local PT in Indonesia

Establishing a local PT company will take approximately 47 working days. You can check the details of the process as follows:

 

No. Procedure Work Duration
1. Approval from MOJ for company name 2
2. Preparation from notary 4
3. Article of Association from Notary 3
4. Obtain company domicile 15
5. NPWP (Tax payer number) 3
6. Company license (SIUP) 10
7. Business registration certificate (TDP) from local goverment 10