Indonesia’s economic growth and recent reform efforts have put the country at number 73 on The World Bank’s EoDB list and, before the COVID situation they were steadily increasing their position, some reports even suggest as much as 4%. Clearly then, there are investment opportunities to take advantage of, especially if you get in there before things get ‘back to normal’.
How to Start a Business in Indonesia: Frequently Asked Questions
In Indonesia, what are the different forms of contractual arrangements?
- Firstly, there are 3 common types of legal business entities to consider when you are starting a company in Indonesia, the best choice will depend upon your circumstances.
- A foreign-owned limited liability corporation is known as a PT PMA in Indonesia (Perseroan Terbatas Penanaman Modal Asing)
- A locally-owned limited liability company is locally referred to as a PT (Perseroan Terbatas). Depending on the nature of your business, foreigners starting a business in Indonesia Branch or Representative Office (RO)
What types of companies limit foreign ownership in Indonesia?
The current document and law to which new business owners must consult is Indonesia’s Positive Investment List (formerly known as Indonesia’s Negative Investment List – DNI). You may also want to consider the idea of a partnership in order to benefit from a vested interest.
The proportion of foreign possession, entity kinds (i.e., PT, PT PMA, RO), business sectors, and business lines (locally referred to as KBLI) are all detailed in Indonesia’s Positive Investment List. It is a detailed document that describes thousands of KBLIs, each with its own set of regulations. As a result, it is critical to first establish what KBLI does your company come under.
How long does it take to establish a company in Indonesia?
Starting a business in Indonesia takes between 1 and 3 months, depending on how quickly business owners are able to deliver company paperwork, deeds, and reports to their market-entry advisers to complete the process. Companies that have their entire set of paperwork ready can begin operations in less than 30 working days from the time their documents are submitted to Indonesian authorities.
Where can I get a Domicile Letter?
The Domicile Letter (also known as a Surat Keterangan Domisili in Indonesia) is legal documentation that your company’s office location or address has been registered. During the incorporation procedure, all foreign-owned firms are obliged by law to have an office. All that is necessary to get a Domicile Letter is an office leasing agreement. Domicile Letters are issued by both the Kelurahan (administrative village) and the Kecamatan (subdivision of the city/regency). It should be noted that a residential address is not suitable as a business location. For business owners who are looking to start small, a Virtual or Serviced Office is a total solution for obtaining your Domicile Letter, and space for small teams to remain productive.
Is it possible for a foreigner to establish a PT local company?
The short answer is, yes but, the solution is in Indonesia’s Positive Investment List (formerly known as Indonesia’s Negative Investment List – DNI). More information may be found by speaking with a local agent or specialist.
