Foreign Company Registration in Indonesia

In Indonesia, foreign company registration falls under the category of a known term in the Company Law as Perseroan Terbatas Penanaman Modal Asing (PT PMA) or Foreign-Owned Limited Liability Company. The term is used to define all investments made by foreign entities in Indonesia, either as an individual, a fully owned foreign company, be it single venture or joint venture alongside the Indonesian companies or legal entities.

Requirements of Foreign Company Registration in Indonesia

Foreign-owned companies can only participate in large scale businesses. Furthermore, foreign-owned companies are prohibited to partake in sectors like: narcotics, gambling and casino, chemical weapons, etc.

The minimum investment value for foreign companies stands at IDR 10 billion, excluding land and buildings, as regulated by the government in the Standard Classification of Indonesian Business Fields (KBLI) 2020.

Foreign-owned companies must be established as Perseroan Terbatas (PT) or Limited Liability Company.

The minimum capital value for foreign companies stands at IDR 10 billion. However, there are exceptions for companies in sectors that would require more capitals.

Procedures of Foreign Company Registration in Indonesia

Preparations of Establishment Documents:

Details about the company, such as:

A company name selection that consists of minimum 3 (three) words.
Authorized Capital and Paid-Up Capital Value (for a Foreign-Owned Company, the minimum is above IDR 10 billion).
Address of the Company that will then be linked to the Tax ID registry.
Determination of Company’s structures, at the minimum of 1 (one) Director, 1 (one) Commissioner, and 2 (two) Shareholders and its ownership percentage.
The Business Activities in accordance with the Business Classification Code as regulated in Indonesia.

Electronic Letter of Completion, stating that the applicant has collected all the necessary documents.
Deed of Establishment (Akta Pendirian), a document that verifies the establishment of the company, which consists of the complete Articles of Association of the Company and signed with the presence of a notary. This document will then be uploaded to the Legal Entity Administration System (SABH) of the Ministry of Law and Human Rights by the Notary.
The Deed of Establishment will then be submitted to the SABH in accordance with the Company Establishment Form and the aforementioned document will be uploaded to the system by the Notary.

The Publication of the Certificate of PT Registration (Sertifikat Pendaftaran PT)

Upon submission, the documents uploaded for the application will be verified and processed by the Ministry of Law and Human Rights. Should the submission be accepted, the certificate will be issued and the Company would acquire the legal entity status afterwards.

Business Permit Registration for Foreign Companies

After securing the certificate and being officially established as a Perseroan Terbatas (PT), a company still needs to obtain and register their tax identity then process a business permit (Perizinan Berusaha) before starting their operations, which consists of Basic Requirements (Persyaratan Dasar) and Risk-Based Business Permit (Perizinan Berusaha Berbasis Risiko).

The Basic Requirements would consist of:

Kesesuaian Kegiatan Pemanfaatan Ruang (KKPR), a document the verifies the planned usage of the location being used by the Limited Liability Company.
Persetujuan Lingkungan/Environmental Permit, a document that verifies that the operations of the will not endanger the environment. This document is issued by the Ministry of Environment and Forestry.
Persetujuan Bangunan Gedung dan Sertifikat Layak Fungsi, documents that verifies that the building used by Limited Liability Company follows a certain quality and safety standard, this particular requirement will be reconsidered based on the ownership status of the company upon the registered address.

The Risk-Based Business Permit consist of:

Low-Risk Business

A Low-Risk Business is required to have a Nomor Induk Berusaha (NIB)/Business ID Number.

Medium–Risk Business

A Medium-Risk Business is required to have NIB and standard certificate.

High–Risk Business

A High-Risk Business is required to have NIB and a business license.

After all documents are submitted, the application will be reviewed by the Online Single Submission (OSS) system under the jurisdiction of the Ministry of Investment. Should the application be approved, the business permit will be issued by the aforementioned ministry on behalf of the government.

How can Double M Help?

The process of Foreign Company registration in Indonesia involves intricate procedures and requires multiple documents from different institutions. Double M is committed to assisting the clients through the entire process in the most time-efficient manner. Should you have any inquiries, please contact us.