Company Registration in Indonesia
Between the Indian and Pacific oceans is a series of islands that make up Indonesia. It is regarded as Asia’s southernmost region. After China, Japan, and India, Indonesia has the fourth-largest economy in the world. The population of this nation is the fourth-largest in the globe. So, it would be advantageous to register a corporation in Indonesia because of this. Indonesia company registration is quite simple, however it’s crucial to follow local legal criteria.
- Procedure for Company Registration in Indonesia
- Documents required for company registration in Indonesia
- Liaising with the concerned regulatory authorities for Indonesia company registration
- End to End Support
Company Registration in Indonesia- An Overview
Many small islands make up the country of Indonesia, which is one area. This nation is renowned for its rich history and varied cultures. It is situated halfway between the Pacific and Indian oceans. It is the fourth-largest economy in Asia. Its population is the fourth-largest in the world. As a result, Indonesia offers investors many chances.
After China and India, its domestic markets are the largest in all of Asia. The services industry has recently been fostered by the Indonesian government. As a result, several types of services are flourishing in Indonesia.
The GDP is expanding quickly and steadily. Indonesia’s GDP is currently 6.1%. This demonstrates Indonesia’s favourable status for foreign investment. So, an investor should take into account all of the aforementioned factors while registering a company in Indonesia.
In terms of daily costs, rent, and utilities, Indonesia has a very low cost of living. As a result, investors can easily establish a business in Indonesia. Several double taxation agreements exist between Indonesia and other nations, including those with China, Japan, and India.
Indonesia is ranked 34th globally for competitiveness, according to this metric. This would also involve access to cheap labour and local manufacturing services, all of which are available in Indonesia for conducting business.
Hence an investor should consider all the above benefits before going for Indonesia company registration.
Benefits of Company Registration in Indonesia
The following are the benefits of Company Registration in Indonesia:
- Several Cultures
Indonesia has a rich cultural history. Due to migration of many ethnic groups, the nation has diverse civilizations. An investor can so conduct business in Indonesia with ease.
After China and India, its domestic markets are the largest in all of Asia. The services industry has recently been fostered by the Indonesian government. As a result, several types of services are flourishing in Indonesia. Indonesia’s GDP is at 6.1% and is steadily increasing. This demonstrates Indonesia’s favourable status for foreign investment. So, an investor should take into account all of the aforementioned factors while registering a company in Indonesia.
- Zones Special Economic
In Indonesia, various SEZ have been developed. These SEZs offer a variety of advantages to investors, including tax breaks, subsidies, and advantages for manufacturing. There would also be tax breaks available, like a VAT exemption and a lower corporate income tax rate.
When compared to other Asian nations, Indonesia has relatively low labour costs. Hence, labour can be hired to complete work. In addition, Indonesia has a diverse labour force, which presents a variety of opportunities.
Eligible Business Structures for Company Registration in Indonesia
The following are the eligible business structures for Company Registration in Indonesia
- Entity wholly owned by foreigners
The term “Penanaman Modal Asing (PMA)” is also used to refer to this type of corporate entity. A foreign shareholder may be the owner of this type of entity. This would apply to the first 15 years of life. The business is required to designate a resident Indonesian after this time frame is over. The local Indonesian must own 5% of the business. Setting up this kind of corporate structure is advantageous for a foreign company. One resident director must be chosen in order to create this type of entity. In addition, two shareholders must be chosen. For this kind of organisation, USD 300,000 is the required minimum paid up capital.
- Limited Liability Company (LLC)
The name “Perseroan Terbatas” is also used to refer to this type of legal body. The most popular form of business in Indonesia is an LLC. A foreign shareholder is possible for an LLC. The e Capital Investment Coordination Board’s prior approval is required before an LLC may begin doing business (BKPM).
- Division Office
A branch office established in Indonesia is merely an addition to the parent business. A branch office would do business on behalf of the parent corporation. The branch office is not subject to a distinct limited liability.
- Reprographic Office
An Indonesian representative is only an outgrowth of the parent corporation. A representative office would handle non-project duties such as liaising.
- Trading Company Nominee
Typically, a company of this kind would use foreign capital to buy a property. The land would be purchased in the nominee trading company’s name. All limitations on foreign investment can be bypassed by a corporation using this type of structure. Two shareholders, two directors, and a minimum capital of 50 million Rupiah are needed to establish this sort of organisation. To function, this kind of entity needs to have a registered office address.
- Joint enterprise
A candidate for Indonesian company registration may choose for a joint venture to conduct business there. The Indonesian government encourages partnerships between domestic and international businesses. A PMA business is created when a joint venture is founded in Indonesia. A minimum of two shareholders and directors must be chosen in order to create this kind of business.
- Company Limited by Shares
The public may purchase shares from this type of company. An initial public offering can be used to sell shares to the general public (IPO). A corporation is referred to as a public limited company if it has more than 300 shareholders and a paid up capital of three billion rupiah.
Minimum Eligibility Criteria for Company Registration in Indonesia
- Essential Share Capital
To register a corporation in Indonesia, a minimum amount of shares must be held. For every business, the share capital would be unique. In order to incorporate a PMA, for instance, USD 300,000 in share capital is necessary. In a similar manner, 3 billion Rupiah in minimum share capital is needed to establish a public limited company. 50,000,000 Indonesian Rupiah is the minimal amount of cash needed to form an LLC.
- Shareholders Must Have a Minimum of
Again, depending on the sort of organisation, these needs would differ. One shareholder and one director, for instance, must be necessary in order to register the PMA. The minimal number of shareholders needed to form another company is two.
- Registered Address
For a corporation to be registered in Indonesia, a physical registered office is necessary.
- a minimum of two directors
According to the type of company, these needs would once again vary. One director, for instance, is necessary in order to register the PMA. Nonetheless, a minimum of two directors is needed to form other corporations.
- requirements for residency
There are some corporate structures where stockholders are required to be Indonesian citizens. There are some organisations, though, where a resident need not apply.
Procedure for Company Registration in Indonesia
The following procedure has to be considered for company registration in Indonesia:
The procedure mentioned below is for establishing up Foreign Limited Liability Company under Company Registration in Indonesia.
Reservation of Name
The applicant for Indonesian company registration must first reserve the name of the company. The Ministry of Law and Human Rights must hold the LLC’s name in reserve (MOLHR). Such a name must be in Indonesian in order to meet the name requirements. Government Regulation No. 43 of 2011, which is dated 4 October 2011, outlines the requirements for name registration.
approving the Association’s Articles of Incorporation
The MOLHR must receive the articles of association by electronic means. The appropriate notary can complete this. The aforementioned must be submitted within 60 days. This must occur 60 days after the deed of establishment’s execution, which contains the articles of organisation.
- Acceptance of Company
If the business can register as an LLC within 14 days, the MOLHR will assess the application electronically and grant approval. This endorsement would serve as official proof that the business has been created.
- LLC residence
After completing the aforementioned procedure, the company’s domicile would be received from the relevant Sub-District Office.
- Number for Tax Registration
The taxpayer’s registration number Nomor Pokok Wajib Pajak (NPWP) would be gained from the respective tax office.
- obtaining approval from the ministry of trade (MOT)
With MOLHR clearance, the business must register with the companies registration. Within three months of the business’ incorporation, this can be done at the relevant MOT regional office. The Online Single Submission (OSS) technology would then be used to integrate the application after that. For the registration of companies in Indonesia, this would provide a business registration number. The Nomor Induk Berusaha, or NIB, is the company’s business registration number and is issued by the OSS.
The Articles must be delivered to the State Printing Office after receiving the aforementioned permissions in order for this registration to be published in the State Gazette. The notary public will handle this.
Following a company’s registration in Indonesia, there are specific post-compliance obligations that it must adhere to:
- Ownership Meetings
Annual General Meetings must be convened no later than six months after the fiscal year’s end. LLC is required to do accomplish this. The firm may, however, also call an EGM at its discretion.
- Governing Body Meeting
LLC would not be required to hold board meetings until it was specified in the company’s articles of organisation. Board meetings are required for public limited corporations.
Documents for Company Registration in Indonesia
For the registration of a corporation in Indonesia, the following documentation is needed:
- Notarized Company Documents Deed of Appointment Articles of Association Memorandum of Association
- About the company’s name, approval
- The Notary Akta (Notarial Deed)
- Ministry of Law and Human Rights endorsement
- Copy of a Domicile Letter and a Current Passport
- A copy of the shareholders’ and directors’ passports, if they are foreign residents.
- Appointment letter from a foreign parent firm (for directors and shareholders) (This would be required for specific entities such as the branch office and representative office)
- registration with the foreign parent company’s chamber of commerce
- intended letter (for starting a branch office and representative office).
Frequently Asked Questions
Is a trip to Indonesia necessary for me to register my business?
No, you may complete the entire company registration process online. There is no necessity to visit to Indonesia.
Can I own everything outright?
The Penanaman Modal Asing (PMA) may indeed be owned entirely by foreigners. This ownership, nevertheless, is only valid for 15 years. They would then need to nominate a resident with a 5% stake in the business.
Is Indonesia open to foreign investment?
Sure, Indonesia accepts international investment.
Does the public need to have access to the shareholders’ and directors’ information?
Certainly, the general public would have access to such material.
Do all businesses operating in Indonesia need to file tax returns?
Indeed, all businesses are required to file corporation taxes. Representative offices, however, must not fulfil such standards.
The residence criterion must it be met?
No, the requirement for residency is not required. Some businesses do, however, have Indonesian stockholders.