Unlocking Indonesia company registration

Preface: Indonesia company registration becomes a hassle-free endeavor when you partner with Fionza Consultants. With us handling the intricacies, you can focus your valuable time and resources on more critical aspects of your business.

Trust Fionza Consultants to guide you through the Indonesia company registration process effortlessly, allowing you to achieve operational readiness in no time. Your success in the Indonesian market is our priority.

Can foreigners register a company in Indonesia?

Establishing a business in Indonesia as a foreign investor or entrepreneur can be a nuanced process. To obtain approval from Indonesian authorities for registering a company with foreign ownership, specific criteria must be satisfied.

The extent of foreign ownership can range from 0% to 100%, contingent upon the nature of your intended business activities in Indonesia. For detailed insights, you can consult the Negative Investment List.

Moreover, to secure BKPM foreign investment approval, your business will need to demonstrate a paid-up capital of approximately US$250,000. This financial requirement is a crucial consideration when venturing into the Indonesian market.

How to register company in Indonesia?

Our team of dedicated professional consultants has streamlined the essential steps for Indonesia company registration. It’s crucial to familiarize yourself with these steps for a smooth setup in Indonesia.

Step 1: Optimal Business Structure Selection Before proceeding, Fionza Consultants will assess your business activities and recommend the most suitable legal entity for your needs.

Step 2: Meeting Government Requirements Once you’ve chosen a business entity, ensure compliance with government requirements. These requirements vary depending on your chosen entity type, as elaborated below.

Step 3: Name Reservation To check the availability of your company name, refer to the official government company directory. Fionza Consultants will assist you in obtaining clearance for your chosen name through a notary, including the payment of IDR 200,000 at a local bank. The notary will provide a code and payment receipt, which will be used to reserve your name online with the Indonesia Ministry of Law & Human Rights.

Step 4: Document Preparation Fionza Consultants will guide you in preparing the necessary documents for Indonesia company registration, tailored to your business structure. For a foreign Limited Liability Company (PT), required documents include shareholder passport copies or corporate entity documents, the registered office address, and, if applicable, a lease agreement or purchase deed for the office space. Notarization of these documents will also be arranged.

Step 5: Deed of Establishment and Certificate of Domicile Fionza Consultants will apply for the deed of establishment with the Ministry of Law and Human Rights within 60 days of its creation. Approval typically takes about 2 weeks. You will receive the Certificate of Company Domicile from the local government, along with other necessary documents for your business operations. If you have a physical office in Indonesia, you’ll also need a Domicile Certificate for Building Management from the Building Management Office.

Step 6: Permanent Business Trading License (SIUP) Your company will need assistance from Fionza Consultants to obtain the SIUP, a permanent business trading license from the Ministry of Trade. This is essential for trading businesses, containing details about the business activities and the responsible individual.

Step 7: Taxpayer Registration Number (NPWP) Fionza Consultants will aid in registering your business with the local tax office to secure a Tax Identification Number (NPWP). Our dedicated accounting team will ensure compliance with tax filing and financial reporting requirements.

Step 8: Register in OSS Upon completing the above steps, Fionza Consultants will register your company in the One Single Submission System (OSS). You will receive the company registration certificate, which includes the Company’s Business Identification Number (NIB).

Step 9: Company Registration Certificate (TDP) and Relevant Licenses Depending on your business activity and capital, you may need to apply for specific business licenses to operate in Indonesia. Additionally, registration with local systems, such as healthcare insurance, social security, and VAT collection, may be required.

Step 10: Corporate Bank Account Opening After company incorporation, it’s essential to open a corporate bank account with a reputable bank. Fionza Consultants will leverage our extensive banking network to assist in opening an account with either a local or international bank, based on your preference. This will enable smooth business transactions.

Types of business structures available for company registration in Indonesia

Registering a company in Indonesia as a foreigner can be a complex process due to government regulations and restrictions outlined in the Negative Investment List. To help you navigate the options available, Fionza Consultants offers expertise in Indonesia company registration, tailored to your business needs. There are three primary business entity types to consider:

1. Limited Liability Company (PT):
   1. Ideal for businesses 100% owned by Indonesian citizens.
   1. Foreign investors needing local ownership can use a nominee company like Fionza Consultants to act as local shareholder and director.
   1. Requirements include 2 local resident shareholders, 1 local resident director, 1 commissioner of any nationality, and variable paid-up capital depending on company size.
   1. Recommended for businesses protected by the Negative Investment List.
2. Foreign-owned Limited Liability Company (PT PMA):
   1. Suitable for foreign investors who want full ownership and control.
   1. Requires foreign investment approval from BKPM, an investment plan of US$1,000,000, and a minimum share capital of US$200,000.
   1. Fionza Consultants can provide a nominee resident director if needed, with a comprehensive agreement to ensure non-interference.
   1. Requires 2 shareholders of any nationalities, 1 local resident director, 1 commissioner of any nationality, and an equity capital of US$200,000.
   1. Recommended for businesses outside the Negative Investment List.
3. Representative Office:
   1. Designed for market research and marketing for parent companies, but cannot engage in income-generating activities.
   1. Valid operating license for two years.
   1. A strategic choice for foreign companies exploring the Indonesian market before committing to a PT or PMA.
   1. Note: Branch offices for foreign companies are currently prohibited in Indonesia.

Navigating Indonesia’s business environment can be challenging for foreigners, but with Fionza Consultants’ expertise, you can establish a strong foothold in this dynamic market.

Why choose to register your company in Indonesia?

Before proceeding with company registration in Indonesia, it’s crucial to gain a comprehensive understanding of the local business landscape. This knowledge ensures that your newly established entity can operate legally and effectively while aligning with your long-term business objectives.

Political Environment:

• Indonesia ranks 85th on the Corruption Perceptions Index by Transparency International, indicating a relatively low level of corruption but potential delays in the company establishment process.
• Indonesia maintains positive diplomatic relations with neighboring countries and is actively involved in international organizations like ASEAN, East Asia Summit, the United Nations, the Organisation of Islamic Cooperation (OIC), and the World Trade Organization (WTO).

Economic Landscape:

• Indonesia is the 16th largest economy globally, boasting a GDP per capita of $3,871.
• The World Economic Forum’s Global Competitiveness Report ranks Indonesia as the 50th most competitive economy, with a score of 64.63%.

Social Factors:

• Bahasa Indonesian is the official language, meaning your company documents won’t be in English. Fionza Consultants can provide certified translations if necessary.
• Indonesia ranks 13th in Asia for English proficiency according to the EF English Proficiency Index, which may pose communication challenges with local authorities and bankers.
• Indonesia has a sizable population of approximately 268 million, with a labor force participation rate of 69%, mainly concentrated in manufacturing and agriculture sectors.

Technological Advancements:

• Indonesia’s government is actively promoting technological advancements, such as the “Making Indonesia 4.0” initiative, focusing on sectors like F&B, automotive, chemical, textile, and electronics.
• Plans to transform Indonesia into a tech hub are underway, with a focus on artificial intelligence, 3D printing, and robotics. However, there is a shortage of highly skilled workers in these fields.

Legal Framework:

• Indonesia ranks 73rd among 190 economies in the ease of doing business, according to the latest World Bank ratings. The company registration process can be time-consuming, and some entities require local directors, commissioners, and shareholders.
• Foreign investors must apply for BKPM approval and meet capital requirements of approximately US$250,000.

Environmental Considerations:

• Indonesia ranks 113th on the Environmental Performance Index.
• The country’s geographical location, consisting of thousands of islands between Asia and Australia, makes it an attractive destination for both domestic and international tourists.

Conclusion

Understanding these factors is essential for a successful company registration process in Indonesia. Fionza Consultants can provide valuable guidance and support to navigate the complexities of establishing your business in this diverse and promising market.