FAQs

• What type of legal entities are available to foreign investors who wish to invest in Indonesia?

  This depends on the industry and nature of your business's activities. For example, if you plan to have activity in the social, religious, and/or humanitarian fields you should establish a yayasan.

  These are the types of legal entities available to foreign investors wishing to invest in Indonesia:

  • PT PMA – Limited Liability Company with Foreign Direct Investment.
  • KPPA – Representative Office.
  • KP3A – Representative Office for Trading.

  In addition, these types of legal entities are available for domestic investors wishing to invest in Indonesia:

  • PT Biasa – Domestic Limited Liability Company.
  • PT PMDN – Domestic Limited Liability Company with Facilities.

  PT PMA

  • Activity

    Can conduct business activities within the Indonesian Standard Classification of Business Fields (KBLI) of the PT PMA.

  • Best for

    Foreign investors looking for direct investment in Indonesia.

  • Restrictions

    The incorporation of a PT PMA must be pre-approved by the Head of the Investment Coordinating Board (BKPM). On the basis of the Negative Investment List (DNI), a Presidential Regulation that lists business fields which are open, partially open or closed to foreign investment, the BKPM will assess the envisaged investment. Any business field not specifically listed in the DNI or governed by any other legislation is in principle open to 100% foreign investment.

  • Minimum capitalization

    Regardless of the envisaged business field, the BKPM requires a minimum planned investment amount of more than IDR 10,000,000,000.00 (about USD 750,000.00) and at least 25% of which must be paid-up capital, as a general rule. The remaining 75% of the planned investment amount may be invested through loans. The paid-up capital can be used as working capital. The minimum paid-up capital is higher than the general BKPM standard in various business fields, subject to regulations and guidelines issued by the relevant regulatory authority and at the discretion of the BKPM.

  • Benefits

    Can fully operate as limited liability company within the KBLI of the PT PMA.

  • Disadvantages

    Large capital injection. Investment in certain business fields are restricted by the DNI or other legislation.

  • Work and resident permits

    • Directors and commissioners are eligible to obtain a work and residence permit.
    • Work permits can be issued to foreign experts that are employed by the PT PMA.
    • Unlimited amount of business visa sponsorships for foreign experts that are employed by the PT PMA.

  • Additional licenses

    • Permanent Business License from the BKPM.
    • Additional operating licenses for certain business activities.
    • Import license for importers, namely, API-U for trading company and API-P for producer company.

  • Compliance

    • Monthly withholding tax report.
    • Quarterly/semi-annual investment reporting (LKPM).
    • Annual tax report.

  PT Biasa

  • Activity

    Can conduct business activities within the Indonesian Standard Classification of Business Fields (KBLI) of the PT Biasa.

  • Best for

    Domestic investors looking for direct investment in Indonesia without involving any foreign shareholders.

  • Restrictions

    • Cannot have foreign shareholders.
    • Limited amount of work permits for foreigners in the PT Biasa.

  • Minimum capitalization

    As a general rule, the minimum authorized capital is:

    • Micro size company: less than IDR 50 million.
    • Small size company: IDR 50 million – IDR 500 million.
    • Medium size company: IDR 500 million – IDR 1 billion.
    • Large size company: above IDR 10 billion.

  • Benefits

    Low capital injection and fast establishment process as long as no foreign shareholders are involved.

  • Disadvantages

    No foreign shareholders.

  • Work permits and visas

    • Only a large-sized company can apply for work a permit for its foreign worker.
    • Unlimited amount of business visa sponsorships.

  • Additional licenses

    • Import license for importers.
    • Additional operating licenses for certain business activities.

  • Compliance

    • Monthly withholding tax report.
    • Annual tax report.

  KPPA (Representative Office)

  • Activity

    • Market research.
    • Local representation.

  • Best for

    • Foreign companies surveying the Indonesian market.
    • Foreign companies that do not generate revenues in Indonesia.

  • Investment restriction

    Not applicable.

  • Minimum capitalization

    Not applicable.

  • Benefits

    • The easiest way to have legal presence in Indonesia.
    • Fast establishment process.
    • No capital injection requirement.
    • Unlimited renewals for KPPA license.

  • Disadvantages

    • Cannot seek or generate revenues in Indonesia.
    • KPPA license generally valid for 3 years.
    • Cannot do product promotion.

  • Work permits and visas

    • Unlimited amount of business visa sponsorships.
    • Work permit for chief representative office.
    • Need to hire 3 Indonesians for every one foreigner hired.

  • Additional licenses

    Not applicable.

  • Compliance

    • Monthly withholding tax report.
    • Annual tax report.
    • Semi-annual and/ or annual business activity reporting.

  KP3A (Representative Office for Trading)

  • Activity

    • Market research.
    • Act as selling / buying agent.
    • Product promotion.
    • Local representation.

  • Best for

    • Foreign trading companies surveying the Indonesian market.
    • Foreign companies that do not generate revenues in Indonesia.

  • Ownership restriction

    Not applicable.

  • Minimum capitalization

    Not applicable.

  • Benefits

    • The easiest way to have legal presence in Indonesia.
    • Fast establishment process.
    • No capital injection requirement.
    • Permanent KP3A license can be extended every 3 years.

  • Disadvantages

    • Cannot seek or generate revenues in Indonesia.
    • Cannot do sale and purchase transactions.

  • Work permits and visas

    • Work permit for chief representative office.
    • Need to hire 3 Indonesians for every one foreigner hired.
    • Unlimited amount of business visa sponsorships.

  • Additional licenses

    Not applicable.

  • Compliance

    • Monthly withholding tax report.
    • Annual tax report.
    • Semi-annual and/ or annual business activity reporting.
• Who is able to establish a company in Indonesia?

  To establish a company in Indonesia, you must have a minimum of two capable persons and/or companies.

• How much will your establishment cost?

  At Plato, we offer a straightforward company establishment service. For a quote, simply contact us. We'll then provide you with clear step-by-step guidance and the documentation that you're legally required to have to ensure you're compliant.

• How long will it take to establish your company?

  We'll first manually review your application. Once we have confirmed its accuracy, we will lodge the complete form - including all information and required documents - to the relevant authorities.

  • For domestic investments

    • You’re able to sign the company deed of establishment (DOE) and within 10 working days of this signing, a copy of the DOE will be ready.
    • Next, the Minister of Law and Human Rights (MOLHR) will need to approve the DOE. This will be ready within 2 working days of the authority receiving your completed documents and information.

  • For foreign investments

    • Within 14 working days of receiving your complete documents and information, you’ll get your principal license from the Head of Indonesian Investment Coordinating Board (BKPM).
    • You’re able to sign the company deed of establishment (DOE) after getting your principal license. Within 10 working days of this signing, a copy of the DOE will be ready.
    • Next, the Minister of Law and Human Rights (MOLHR) will need to approve the DOE. This will be ready within 2 working days of the authority receiving your completed documents and information.
• What will you receive if your application is approved?

  After your application is successful, you’ll receive:

  • For domestic investments

    • Your DOE or “company deed of establishment”.
    • Your Indonesian company registration number issued by Minister of Law and Human Rights (MOLHR).
    • Other legal documents, such as: share certificates*.

  • For foreign investment

    • Your company principal license from the Head of Indonesian Investment Coordinating Board.
    • Your DOE or “company deed of establishment”.
    • Your Indonesian company registration number issued by the Minister of Law and Human Rights (MOLHR).
    • Other legal documents, such as: share certificates*.
• What is a principal license (IP) and do you need one?

  Before an investor can invest in Indonesia through a PT PMA or a PT PMDN, he or she must first hold a license known as a principal license (IP).

• What is a general corporate license and do you need one?

  These are the general corporate licenses:

  • SKDP.
  • NPWP.
  • TDP.
  • SIUP*.

  If you have a company / representative office / representative office for trading in Indonesia, you’ll need a general corporate license.

  You’re able to apply for your general corporate licenses once you have signed the company deed of establishment or obtained approval from the BKPM for the establishment of a representative office / representative office for trading.

  *Foreign investment companies do not require a SIUP.

• What is an SKDP and do you need one?

  An SKDP (i.e. domicile letter) is a certificate that confirms the permanent residence of a company (or its domicile) and is issued by the local authorities. If you have a company / representative office / representative office for trading in Indonesia, you’ll need an SKDP.

  You’re able to apply for an SKDP once you have signed the DOE or obtained approval from the BKPM for the establishment of a representative office / representative office for trading.

  Initially, you’ll receive a temporary SKDP from the local authority within 5 working days of the authority receiving your completed documents or information. You are eligible to apply for a permanent SKDP after obtaining an NPWP.

  You will receive a permanent SKDP from the local authority within 5 working days of the authority receiving your completed documents or information.

• What is an NPWP and do you need one?

  A tax identification number, known as an NPWP, is a unique 15 digit number issued by the local tax office to help identify you as a taxpayer.

  Each Indonesian will need to have an NPWP to be able to establish your company. Your company / representative office / representative office for trading will need to have a separate NPWP than your NPWP. Also note that each foreigner who is employed in Indonesia will also need to have a separate NPWP.

  Your company / representative office / representative office for trading is eligible to apply for an NPWP after obtaining a temporary SKDP.

  You'll receive the NPWP from local tax authorities within 10 working days upon the authorities receiving complete documents and information.

• What is a TDP and do you need one?

  A Certificate of Company Registration, or TDP, is an official record held under the provisions of the law or the regulations of its implementation. It contains matters which must be registered by each company and then authorized by the local authority.

  Your company is eligible to apply for a TDP, in case it is a Domestic Limited Liability Company, after obtaining a SIUP or, in case it is a PMA company, after obtaining an NPWP.

  You'll receive a TDP from local authorities within 10 working days upon the authorities receiving your completed documents and information.

• What is a SIUP and do you need one?

  A business license, or SIUP is a permit issued by the local authorities to a Domestic Limited Liability Company to carry out business in the field of trade and services. Each Domestic Limited Liability Company must have a SIUP.

  Your Domestic Limited Liability Company is eligible to apply for a SIUP after obtaining an NPWP.

  You'll receive your SIUP from local authorities within 10 working days upon the authorities receiving your completed documents and information.