Company establishment in Jakarta is a strategic move for businesses aiming to enter Indonesia’s thriving economy. As the capital and economic hub of the country, Jakarta offers unparalleled access to government institutions, skilled labor, infrastructure, and a large consumer base. For both multinational corporations and SMEs, establishing a presence in this bustling metropolis can unlock significant growth opportunities—if done with the right approach.

Why Choose Jakarta for Company Establishment?

Jakarta is not only Indonesia’s political and administrative center but also a major economic engine driving the nation’s GDP. The city is home to top decision-makers, trade associations, and multinational headquarters. It offers a highly connected ecosystem for launching and scaling a business within Southeast Asia.

Understanding the Legal Framework for Company Establishment in Jakarta

Before initiating a company establishment in Jakarta, it’s crucial to understand the legal framework and regulatory requirements that apply to foreign and domestic investors. The most common legal entity for foreign investors is the PT PMA (Perseroan Terbatas Penanaman Modal Asing), or foreign-owned limited liability company.

Key Requirements for Foreign-Owned Companies

• Minimum two shareholders (can be individual or corporate)
• A minimum investment plan of IDR 10 billion per business classification
• A deed of establishment notarized and registered with the Ministry of Law and Human Rights
• Business Identification Number (NIB) issued through the OSS (Online Single Submission) system
• Sector-specific licenses, depending on the industry

Indonesia applies a Negative Investment List, which outlines business sectors that are restricted or closed to foreign ownership. It’s essential to check this list when planning your company activities.

Step-by-Step Process for Setting Up a Company in Jakarta

1. Determine Business Classification and Structure

Define your business line based on the Indonesian Standard Classification of Business Fields (KBLI) and choose your ownership structure.

2. Reserve Company Name and Draft Deed of Establishment

Reserve a unique company name, prepare the Articles of Association, and execute the deed before a local notary.

3. Obtain Legal Entity Status

Submit the deed to the Ministry of Law and Human Rights for approval and registration.

4. Register with OSS System

Obtain the Business Identification Number (NIB), which functions as the main business license in Indonesia.

5. Secure Additional Licenses

Depending on the sector, apply for additional licenses or permits required for operations (e.g., environmental licenses, industry permits).

6. Open a Corporate Bank Account and Set Up Tax ID

Once legally registered, open a local bank account and obtain a Taxpayer Identification Number (NPWP) from the tax office.

7. Recruit Staff and Set Up Payroll

Hiring local employees may require registration with BPJS (Indonesia’s social security agency) and setting up HR systems.

Benefits of Establishing a Company in Jakarta

There are several strategic advantages to choosing Jakarta for your business incorporation:

• Market Access: Jakarta provides access to a consumer market of over 10 million people locally, and over 270 million nationally.
• Talent Pool: The city hosts top universities and vocational institutions, producing a skilled and diverse workforce.
• Infrastructure: Jakarta is a hub for logistics, with highways, ports, and Soekarno-Hatta International Airport nearby.
• Networking Opportunities: Close proximity to chambers of commerce, embassies, and trade associations enhances opportunities for partnerships.
• Government Access: Being near key government bodies helps in smoother licensing, lobbying, and regulatory compliance.

Challenges to Consider

While company establishment in Jakarta is highly rewarding, it also comes with challenges:

• Bureaucratic complexity: Licensing and regulatory processes can be time-consuming.
• Language and cultural barriers: Business negotiations and documentation often require Bahasa Indonesia proficiency.
• Infrastructure issues: While improving, traffic and logistical inefficiencies can impact operations.
• Changing regulations: Businesses must stay updated on evolving tax and labor laws.

These challenges can be effectively managed by partnering with a local consulting firm experienced in navigating Indonesian regulations.

How Double M Can Help with Company Establishment in Jakarta

At Double M, we specialize in helping foreign companies establish their presence in Jakarta and other parts of Indonesia. Our services include:

• Business advisory and feasibility assessment
• Company incorporation (PT PMA and local entities)
• Legal document preparation and licensing
• Liaison with government authorities
• Accounting, payroll, and tax compliance support

By handling the end-to-end process, we ensure that your entry into Jakarta’s market is smooth, compliant, and strategically sound.

Planning for Long-Term Growth

Establishing a company is just the first step. To thrive in Jakarta, companies should invest in long-term planning, including:

• Local talent development
• Regulatory compliance systems
• Scalable digital infrastructure
• Strategic partnerships and networking

With the right foundation, your company can not only succeed in Jakarta but use it as a springboard to expand across the ASEAN region.

Virtual Office Jakarta has gained significant traction among businesses seeking a professional presence without the high costs of physical office space. These setups offer a strategic and cost-effective solution for startups, small businesses, and international corporations. Beyond convenience, virtual offices play a critical role in ensuring compliance with government regulations, especially in company registration and tax requirements.

What is a Virtual Office Jakarta?

A virtual office provides businesses with an official address and essential office services without requiring physical office space. These offices cater to companies operating remotely or following hybrid work models, offering flexibility and professionalism at a fraction of the cost of a traditional office.

Key Features of a Virtual Office

Businesses opting for a virtual office Jakarta gain access to:

• Prestigious Address: A professional address in a prime Jakarta location, ideal for business registration and client interactions.
• Mail Handling: Services for receiving and forwarding mail securely and efficiently.
• Meeting Rooms: On-demand access to fully equipped spaces for meetings or presentations.
• Administrative Support: Services like call forwarding, receptionist assistance, and document handling.

These features allow businesses to maintain a professional image while reducing operational overhead.

Government Regulations for Virtual Office

Company Registration Requirements

In Indonesia, every business must have a registered address to complete the incorporation process. Virtual offices fulfill this requirement by providing a legal and professional address for businesses.

However, compliance with local zoning laws is essential. These laws determine the types of businesses allowed in specific areas. Companies using virtual office services must ensure that the address aligns with zoning regulations to avoid legal complications.

Tax Compliance in Indonesia

The registered address provided by a virtual office is also used for tax purposes. This address is required when registering for a Taxpayer Identification Number (NPWP) and, if applicable, VAT registration. Authorities may use this address for correspondence, audits, or inspections, making it crucial to choose a compliant provider.

Licensing and Permit Restrictions

While virtual office Jakarta services are suitable for most industries, businesses requiring physical facilities, such as manufacturing or logistics, may face restrictions. Companies should confirm that a virtual office setup meets the licensing requirements specific to their industry.

Why Businesses Choose Virtual Office Jakarta

Simplified Market Entry

For foreign companies entering Indonesia, a virtual office offers an easy and cost-effective way to establish a local presence. It eliminates the need for expensive leases and simplifies compliance with regulatory requirements, allowing businesses to focus on growth.

Professional Image

A prestigious address in Jakarta enhances credibility and helps build trust with clients, investors, and partners. This is especially important for startups and small businesses striving to establish themselves in competitive markets.

Flexibility and Cost Savings

Virtual office services operate on a pay-as-you-use model. Businesses can access additional services, such as meeting rooms or administrative support, only when needed. This approach minimizes fixed costs while maintaining operational efficiency.

Compliance with Regulations

Choosing a reputable virtual office provider ensures compliance with Indonesia’s legal and regulatory framework. This reduces the risk of penalties and operational disruptions, offering peace of mind for businesses.

Conclusion

Virtual office services are a practical and strategic solution for businesses looking to establish a professional presence in Indonesia. They offer flexibility, cost savings, and compliance support, making them ideal for startups, SMEs, and multinational corporations.

For businesses exploring virtual office options in Jakarta, working with a reliable and experienced provider can make all the difference. Double M, with its expertise in supporting companies entering the Indonesian market, may be able to assist in navigating this process. By combining professional services with an understanding of local regulations, businesses can establish a strong foundation for growth and success in Jakarta.

Startup Company in Indonesia is generally defined as a company in the first stages of operations. Startups are commonly founded by one or more entrepreneurs who want to develop products or services which they believe can solve an issue or fulfill a demand in the location they are based in. These days, startups are also commonly associated with advanced usage of technology in their operations, more specifically the use of the internet as a means of distributing their products or services to their target market. 

Startup Company in Indonesia

In Indonesia, startups have emerged as the biggest players and it’s not an overstatement to call them the anchor of the country’s economy. This is due to the fact that currently, Indonesia has 9 startups successfully reaching unicorn status (valued above USD 1 billion) and 2 startups reaching decacorn status (valued above USD 10 billion). This means that Indonesian startups have managed to put the country on the map and go toe to toe with the biggest startups in the world. 

For foreign investors, establishing a startup in Indonesia is definitely an exciting prospect. In this article, we will explain the reasons why you must establish a startup in Indonesia.

Why Establish Startups in Indonesia

1. Size of Economy

Indonesia’s internet economy is currently thriving, growing with an average rate of 49% since the year 2015. These numbers have positioned the country as the biggest internet economy in Southeast Asia. It is projected that the valuation of Indonesia’s internet economy will pass USD 130 billion by 2025. Among the big players in this sector are e-commerce, online travel, online media, and ride-hailing. The glooming effects of the pandemic doesn’t seem to affect the Indonesian startup landscape. Investors are still quite comfortable injecting their funds to Indonesian startups.

According to DailySocial, there were 71 funding transactions involving startups in Indonesia during the second quarter of 2022, with a valuation estimated to exceed USD 1,4 billion. In terms of the nominal, it recorded an USD 300 million increase from the previous quarter. Furthermore, it is also reported that around 17 Indonesian startups received more than USD 50 million funding during this period. These numbers highlight the immense potential of the Indonesian startup ecosystem

2. Amount of Internet Users

According to a 2022 report by DS Innovate, Indonesia boasts an amount of 204,7 million active Internet users. That accounts for 73.7% of the population. Considering the fact that almost every startup is counting on the usage of the internet to advance their operations, it is no wonder that Indonesia emerged as a huge market for them. By investing in Indonesia, they have the opportunity to market their products and services to the large majority of the population.

According to the e-Conomy SEA 201 Report, the Indonesian e-commerce market represents nearly 50% of the region’s total market size.

3. Government Assistance

When you’re establishing a startup in a foreign company, the local government will always be an important stakeholder. Upon your startup’s inception, you must be sure to follow all the laws and regulations in regards to company establishment. In Indonesia, the government does not just sit back and watch, but rather offers support for emerging startups. In the first parts of this article, we mentioned the amount of decacorns and unicorns in Indonesia. These details were actually brought up by the President of Indonesia Joko Widodo in his annual speech in front of the People’s Consultative Assembly. In his speech, the President also reaffirmed his government’s commitment to fully support up and coming technology-based startups.

Through numerous Ministries, the Indonesian government also made real efforts and programs in support of startups in the country. For example, the Ministry of Communications and Informatics facilitated early stage startups with incubator and accelerator program which aimed to help the companies get on their feet. The Ministry of Research and Technology offered funding and special coaching for startups in relation to the use of technology. Indonesian governmental organizations such as the Financial Services Authority (OJK) is also around to oversee the operations of startups in P2P lending, crowdfunding, insurance technology etc. 

4. Plenty of Issues Need Solving

Around the world, startups are hugely successful because they typically serve one purpose: to solve real life problems. In Indonesia, that is also the case. Ride-hailing startups like Gojek were built upon the people’s need of vehicle options that can be summoned anytime and anywhere. That being said, it is fair to conclude that the key for successful startups is to know exactly what problem they are trying to solve. In Indonesia, many startups are already established to solve recurring issues but problems still persist. 

One example is road traffic. In Indonesia, especially in Jakarta, traffic jams have become a common sight that has been going on for years with seemingly no solution in sight. On the way to and from work, the traffic will be so jammed that it’s taking hours off people’s lives on the road. It also has a direct knock-on effect on the productivity of the people.

Another huge problem is misinformation. In the era of technological advancement, information spreads at such a quick rate that it is no longer feasible to differentiate truth from lies. Misinformation, also commonly known as hoax, has dangerous implications because it could spark unwanted conflicts among groups in the society. Furthermore, the country is also facing serious data breach issues which are discovered to have sold precious consumer data in exchange for money.

All these problems have one thing in common:  there’s no existing startup in Indonesia that has the capabilities to tackle and solve these problems. This represents demands that are waiting to be met. For prospective startups still in ideation stage, these aforementioned problems could be the centerpiece for the start of their endeavors. 

5. Relatively Low Cost of Living

As a lower-middle income country, the cost of living in Indonesia is substantially lower than Western countries. Living in Jakarta, the capital city, is 60% cheaper than living in New York or London, 40% cheaper than living in Berlin, and 50% cheaper than living in Melbourne. Compared to its neighbors, living in Jakarta is over 50% cheaper than living in Singapore. You can find accommodation at very cheap prices, apartments and hostels prices vary and lots of options are at your disposal, especially with the emergence of accommodation mobile applications. Eating out is also very affordable. With less than 10 USD, you can easily afford 3 meals per day.

In terms of establishing a startup, the usual foreign company establishment charges a fee of around 675 USD, all-in. In terms of workplace, the common choice is to rent separate office spaces in buildings. Recently, the emerging trend is to use co-working spaces. Using co-working space is more cost-effective than traditional office spaces. For investors, cost of living is also an important thing to consider. With significantly lower cost of living, you can allocate more of your funds for your investment. 

6. Ease of Hiring Talents

With the country expected to become the biggest online economy in the region by 2025, the demand for high quality talents in the startup industry has risen higher than ever. New and emerging fields like AI, DevOps, data and programming are becoming popular discourse and young talents with these skills on their repertoire are also increasing.

If you establish your startup in Indonesia, you will have the opportunity to recruit local talents with soft and hard skills in fields like e-commerce, data analysis, fintech, and machine learning. Furthermore, it is worth noting that top universities in Indonesia are now implementing the Kampus Merdeka program. In this program, final year students have opportunity to do an internship that relates with their majors. Many of these students chose to do their internships in startups. With this type of program, it is hoped that the best young talents in Indonesia will be accustomed to the work culture of highly-performing startups. After they graduate, they could potentially go on to work at your startup and perform at a high level. 

How can Double M help?

If you have decided to establish a startup in Indonesia, there are multiple procedures that you must go through. At Double M, we offer all the services you could possibly need starting from company establishment, obtaining work permits, recruiting the best talents and many more.