Company Registration In Indonesia


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    Table of Contents

    Indonesia is one of the most rapidly expanding nations worldwide with an annual growth rate of 6%. It is located between the Indian and Pacific Oceans. Following China and India, it boasts Asia’s biggest domestic marketplaces. By the world bank’s reports, Indonesia has been placed at 73rd place out of 190 nations in 2020 for the “Ease of Doing Business” index.

    Indonesia is the 4th biggest nation in terms of inhabitants and a member of the G20 group of nations. This makes Indonesia a desirable business location for entrepreneurs. Additionally, more than one-third of the gross domestic product in Indonesia is produced by the country’s service sector. Particularly, tourism has become a significant source of revenue.

    This article discusses how an entrepreneur can register a company in Indonesia. It will go over the requirements, methods, documentation, and benefits of company registration in Indonesia.

    Steps to register a company in Indonesia

    Indonesia company registration can be done by following the steps given below:

    Propose a business name

    According to Indonesia’s Ministry of Law and Human Rights, a corporation’s name must have at least three distinct words. Once the name has been decided, the name must be reserved with the relevant authorities.

    Draft the Articles of Association

    After the business name has been reserved, the articles of association must be drafted in the presence of a notary and signed by the stockholders. The Ministry of Law and Human Rights will then review the document before approving it.

    Deed of Establishment

    The Ministry will provide a document of incorporation following approval of the article of association, signifying that the government has recognized your business as a legitimate organization.

    Obtain the letter of domicile

    A letter of domicile should be obtained from the local government office for a corporation residing outside the Jakarta area.

    Acquire your tax registration number (NPWP)

    To obtain additional permits, meet tax responsibilities, and create a business bank account in Indonesia, you must apply for a taxpayer registration number (NPWP) with the appropriate tax authority.

    Apply for a business identification number (NIB)

    A business identification number (NIB) is a 13-digit number that acts as the company’s identification and is used to submit applications for operational, commercial, and business permits. The business identification number can be acquired via the Online Single Submission (OSS) system.

    Open a business bank account

    After establishing your business, you should open a business bank account in which your paid-up capital can be deposited.

    Obtain business license

    Business license requirements vary based on the form of business and its activity. Before you can begin operations, you must submit licensing applications based on the type of company you are operating.

    Documents to register a company in Indonesia

    Here are the numerous documents needed for company registration in Indonesia:

    • Articles of Association
    • Notarized documents of the firm
    • Authorization to use the business name
    • Domicile Letter
    • Copies of the director’s passport and ID cards
    • Ministry of Law and Human Rights acceptance

    Corporate Structure available for company registration in Indonesia

    The various corporate structures available for company registration in Indonesia are:

    1. Foreign-Owned Company (PT PMA)

    Foreign-owned companies are the most prevalent among international entrepreneurs because they permit up to 100% foreign ownership. It is a business structure where an overseas shareholder may be the proprietor of the business. Overseas entrepreneurs favor establishing a PT PMA due to its ability to provide work permits and residence visas for its international staff. The basic amount of capital needed to form PT PMA is IDR 10 billion, and IDR 2.5 billion of that amount needs to be paid upfront as paid-up capital.

    2. Limited Liability Company (PT)

    A Limited Liability Company is the most popular form of corporate structure in Indonesia and is also referred to as a “Perseroan Terbatas.” A PT company can either be established as a SME or a large size business. The paid-up amounts for company incorporation differ based on the classification of the firm. Formal consent from the Capital Investment Coordinating Board is required before an LLC may begin conducting business operations.

    3. Representative Office (KPPA)

    The most straightforward legal entity to set up for entering the market in Indonesia is a Representative Office. Additionally, this form of business structure is exempt from local shareholder and director requirements and there is no prerequisite for capital to start a KPPA. As a representative of its parent organization, an RO is only permitted to engage in non-profitable business ventures. Work involving the marketing of services,  market study, and contract signing would be handled by a representative office. 

    4. Representative office for trading (KP3A)

    Such a representative office is capable of carrying out trading operations on behalf of the parent corporation. KP3As can serve as the selling, producing, and purchasing representatives for the parent firm in Indonesia.

    5. Branch Office

    A branch office isn’t a distinct legal organization and is merely an addition to the parent business. A branch office would do business on behalf of the parent corporation. 

    Eligibility criteria for Indonesia company registration 

    The eligibility criteria for Indonesia company registration are described below:

    • Shareholders: Foreign-owned companies (PT PMA) and limited liability companies (PT) require a minimum of two shareholders for company registration in Indonesia.
    • Directors: The requirements of directors differ based on the chosen business type.  For foreign-owned companies (PT PMA) and limited liability companies (PT) a minimum of 1 director is required for Indonesia company registration. 
    • Capital requirements: The minimum share capital for a PT company is IDR 500 million for medium-sized businesses, and IDR 10 billion for large-scale businesses. A PT PMA requires a minimum investment plan base amount of IDR 10 billion for each company activity.
    • Registered business address: For company registration in Indonesia, having a registered business address is required.

    Tax Structure for Indonesia Company Registration 

    Firms that are registered in Indonesia are required to pay various business taxes in the country.

    • Corporate income tax: When a corporation makes more than IDR 50 billion annually the ordinary corporate income tax is levied at a rate of 22% for both domestic and foreign incomes. Businesses with lower revenue are charged a lower tax.
    • Value-added tax: The VAT rate in Indonesia can range from 5% to 15% based on governmental restrictions, although normally, the standard rate is 11%.
    • Stamp duty: On specific papers, a nominal stamp duty fee of IDR 10,000 is due.
    • Social Security contributions: Employers are in charge of making sure that their staff is enrolled in the Social Security program. Employer premium contributions are computed as a proportion of regular earnings that can range from 0.24% to 4%.

    Cost to register a company in Indonesia

    The cost to register a company in Indonesia depends on the form of business organization as well as the sector you choose. In addition to that, Indonesia company registration depends on numerous other factors such as business name registration, tax reporting, business incorporation, acquiring the business address, etc.

    Here is the list of expenses that must be considered if you intend to register a company in Indonesia:

    Cost of a notary public:  The cost of a notary public is approximately IDR 200,000.

    Notarize business documentation: The highest amount that can be levied is 1.5% of the financial value of the deed’s subject, which can be anywhere between IDR100,000,000 and IDR1 Billion.

    PT company incorporation: PT company incorporation may cost approximately IDR 17,000,000.

    PT PMA company incorporation: Incorporating a PT PMA company may cost about IDR 30,000,000.

    Why register a company in Indonesia?

    • Indonesia has the fourth-largest population around the world with a GDP growth rate of 6% annually.
    • Indonesia has an extremely low cost of living in comparison to other nations.
    • The first Special Economic Zone (SEZ) was created in Indonesia’s Batam region. It provides entrepreneurs with a number of tax benefits. Additionally, there are no taxes on local services, VAT, or import duties.
    • The only member of ASEAN to be a G20 country is Indonesia.

    Advantages of company registration in Indonesia

    Here are the numerous advantages of Indonesia company registration:

    Affordable labor costs

    More than 40% of Indonesia’s enormous population is of working age, making Indonesia a country with a sizable labor force. In comparison to other nations, the nation has affordable labor prices.

    Tax incentives

    The corporate income tax (CIT) rate in Indonesia has been lowered from 25% to 22% by the state. Presently, Indonesia has 65 double-taxation treaties with various nations.

    Special Economic Zones

    In Indonesia, various SEZs have been developed. These SEZs offer a variety of advantages to entrepreneurs, including tax breaks, various types of subsidies, and advantages for manufacturing. Additionally, tax breaks including VAT exclusions and lower corporate income taxes would be provided.


    Indonesia is a popular choice for entrepreneurs who desire to incorporate their businesses in a new area. There are numerous advantages that you can get if you register a company in Indonesia, such as the nation having free trade agreements, special economic zones, approximately 65 double taxation treaties, affordable labor expenses, etc. 

    This article briefly covers company registration in Indonesia. If you wish to register a company in Indonesia, you can consult our business formation experts at Odint Consulting. Our experts will help throughout the process of Indonesia company registration.