How to Expand Business to Indonesia?

With the rapid growth of the middle-income population segment and the launch of several new government initiatives, international expansion in Indonesia has become popular. Indonesia’s economy is on the rise and has been attracting many foreign investors and businessmen to expand to the country. Indonesia is also renowned for being the leading exporter of numerous high-value commodities such as palm oil and thermal coal.

Indonesia is not the easiest country to navigate in terms of setting up a new company – however, it possesses a huge opportunity for foreign investors in terms of the sheer size of the domestic market.

The following are mandatory Indonesia requirements for Foreign Owned Company Incorporation (“PMA”), which is the most common structure used for foreign companies/businessmen investing into Indonesia:

• Minimum investment plan is above IDR 10,000,000,000 or equal with above USD 800,000, in which minimum of above IDR 2,500,000,000 or equal with USD 200,000 is paid-up capital. The investment plan could include non-financial investment and the paid-up capital could be submitted after the company established and has a bank account (stated on capital statement letter)
• Minimum 2 Shareholders (corporate or individual)
• Minimum 1 Local Director
• Minimum 1 Commissioner. If the Foreign Director does not have a work permit (KITAS) yet, there should be 1 Local Director to represent the company during the incorporation process (a nominee director can be used)

As for international expansion in Indonesia, the following are mandatory requirements for Local Company Incorporation (PT”). Depending on the business activities, the government has placed restrictions of foreign ownership in certain industries and only reserved them for local ownership. Therefore, foreign companies can explore alternatives to establish a local PT Company which is allowed to conduct specific business activities with local nominee shareholders/business partners.

• Minimum 2 Local Shareholders (corporate or individual),
• Minimum 1 Local Director
• Minimum 1 Local Commissioner.
• The PT company can register up to 3 types of business activities on the business license
• Sizes of PT companies, according to the amount of paid-up capital:
  • Small : above IDR 50,000,000 – 500,000,000
  • Medium : above IDR 500,000,000 – 10,000,000,000
  • Large : above IDR 10,000,000,000
• The paid-up capital can be submitted after the company is established and has a bank account (stated on capital statement letter)
• If the company plans to hire foreign employees, the type of entity required is a medium company, with paid-in capital above IDR 1,000,000,000

---

Corporate and Accounting Services

Post incorporation of your Indonesian entity, we will be able to support your business with the following services:

• Company secretarial services
• Annual compliance to the local regulators
• Provision of Registered Office
• Accounting and Book-Keeping Services
• Tax Planning Advisory
• Market research reports

---

How We Can Help You?

We assists companies in setting up and doing business in Indonesia. We provides services such as company incorporation and business registration, government compliance, visas and immigration, work permits, accounting, payroll, and recruitment. Its clients are multinational corporations and small-and-medium enterprises from diversified industries including outsourcing and offshoring, product import and export, network marketing, recruiting, real estate, travel and accommodation, trading and manufacturing, etc.

Related Read:
Ease of Doing Business Singapore vs Indonesia »
Top 5 Reasons To Expand Your Business in Indonesia in 2021 »