As one of the largest countries in Southeast Asia, Indonesia presents plenty of business opportunities due to its rapidly growing economy, strategic location, and vibrant digital economy. This makes Indonesia an attractive destination for both local and international entrepreneurs looking to establish their business presence. However, before diving into the market, it is crucial to understand the process of company registration in Indonesia deeply. 

Indonesia’s company registration involves several procedures, including selecting a legal entity type, preparing the required documents, and completing the registration through authorized government channels. Business registration in Indonesia also comes with financial considerations. The cost for company registration in Indonesia may vary, depending on the type of business, business sector, and whether there will be professional services to assist with the process. Let’s delve deeper into the requirements and procedures for registering your company in Indonesia.

The Most Common Types of Business Entities for Foreign Companies in Indonesia

Before learning about company registration requirements and procedures in Indonesia, it is necessary to know the most common types of business entities in Indonesia. Knowing these types is crucial in choosing a suitable business entity according to business needs, whether it be business expansion or starting a new business in Indonesia.

Foreign-owned Limited Liability Company (PT PMA)

Foreign-owned Limited Liability Company, also known as Perseroan Terbatas Penanaman Modal Asing or PT PMA, is the most common business entity for foreign investors in Indonesia. This type allows foreigners to have full or partial ownership of the business. This makes PT PMA a popular choice for foreigners as they can fully own the company and hire foreign employees. However, an Indonesian is needed to fill the director or commissioner position.

Locally-owned Limited Liability Company

Locally owned Limited Liability Companies, also known as Perseroan Terbatas or PT, are one of the most popular choices for Indonesian entrepreneurs. This popularity is due to their minimum capital requirements and faster setup time than foreign-owned companies. However, compared to Foreign-owned Limited Liability Companies, foreigners can’t fully own PT, so it’s mainly for local entrepreneurs.

Representative Office

A representative office is a business entity set up by foreign companies to oversee their interests and explore opportunities in Indonesia. It’s a great choice for foreign companies who want to do market research or handle communications without having to commit to officially establishing their business in Indonesia. However, a representative office is not allowed to do business or make sales in Indonesia.

What are the Requirements to Register a Company in Indonesia?

If you are a foreign entrepreneur looking to establish a business presence in Indonesia, you will need a thorough understanding of the foreign company registration process in Indonesia. Here are the requirements needed to register a company in Indonesia:

• Obtain a business visa and work permit
• Select a legal business entity 
• Prepare ID of the founders (Passport for foreigners, KTP for Indonesians)
• Obtain approval for the name of your company
• Obtain the Deed of Incorporation, including Articles of Association. A notary needs to be present
• Obtain a letter of approval from the legal business entity granted by the Ministry of Law and Human Rights
• Register for a Tax ID (NPWP)
• Obtain a domicile letter that identifies the business’s location
• Obtain the unique company profile number (NIB), business license, and any necessary permits for the business

How to Register a Company in Indonesia?

In Indonesia, company registration involves several critical steps to ensure compliance with local regulations. Here is a step-by-step guide to registering a foreign company in Indonesia:

Reserve Company Name

The first step is to reserve your company’s name, which must be unique and comply with the regulations set by the Ministry of Law and Human Rights. You can check your company name’s availability through the Online Single Submission (OSS) system. If the name is available, you can proceed to register your company’s name with the Ministry of Law and Human Rights. 

Prepare the Deed of Establishment

After securing your company’s name, the next step is preparing the Deed of Establishment, which can be applied for online. This formal document outlines the company’s purpose, structure, and regulations and must be executed before a notary public. The Deed of Establishment is crucial to establishing your company’s legal identity and serves as a foundational document for subsequent registration processes.

Apply for the Certificate of Domicile Letter

The next step is obtaining the domicile letter from your building management where the company is located. If you are using a virtual office service, the service provider can issue the domicile letter. Later, you submit the letter to the regional government office to get a domicile certificate.

Obtain a Tax Registration Number (NPWP) & Business Identification Number (NIB)

After applying for a domicile letter certificate, you should obtain a tax registration number (NPWP) and business identification number (NIB). NPWP is essential for tax purposes and must be obtained from the local tax office. NIB is the unique number that serves as the primary identification of businesses in Indonesia. NIB is often a requirement for various regulatory processes and obtaining business licenses.

Obtain Other Relevant Documents

If your company operates in certain industries, you may need to obtain additional licenses or permits. For example, manufacturing companies are required to have an industrial business license. These licenses or permits can be obtained through the OSS system.

Establish Your Business in Jakarta’s Prime Locations with Effist Suite Office

A professional office in a strategic location is essential to establish your business presence in Indonesia. Securing a good workspace is also crucial for your company registration in Indonesia. Effist Suite Office offers flexible workspace solutions for foreign companies that are looking to establish their business in Indonesia. Our services include a serviced office solution with ready-to-use office spaces with complete equipment and a virtual office solution for companies that are operating remotely and looking for a professional business address in Indonesia.

Effist’s serviced office is equipped with premium working facilities to support your daily operations. Our facilities include an ergonomic working station, executive working equipment, high-speed internet, business lounge, pantry, meeting rooms of all sizes, and secretarial and cleaning services. 

Alternatively, our virtual office solutions provide a cost-effective and flexible option for establishing a local presence. Our virtual office solution has a prestigious business address, professional secretarial support, and mail handling services. Located in strategic South Jakarta locations, Gandaria 8 Office Tower and 88Office Kota Kasablanka, Effist Suite Office provides the perfect environment for your business to thrive. 

Choose Effist Suite Office and experience an effortless business setup in Indonesia. Contact us today at contact@effist.com to learn more about our serviced office and virtual office, or visit our “Book Tour” page.

Editor: Trie Ayu Feminin & Irnadia Fardila