If we consider options for entering Asian markets, then Indonesia deserves attention no less than China or India. Limitless prospects for the promotion of goods and services are opening up for foreign investors in the country in connection with growing consumption and the increase of the middle class – the solvent part of the population.


Company registration in Indonesia is a complex procedure due to the presence of a number of bureaucratic nuances. However, starting in 2021, the country will allow the establishment of legal entities with 100% foreign ownership. Therefore, it is not worth rejecting Indonesia as a jurisdiction for business. It is better to find a reliable assistant who will provide a solution to all issues related to company registration in Indonesia.


Attorney’s Association Lawrange is ready to become such an assistant. Our representatives will make sure that your transnational business project starts without obstacles, delays in time and in full compliance with local laws.



Features of Indonesia as a jurisdiction for business


Indonesia is a country with a population of about 270 million people, i.e. it is second only to China and India in terms of population. And it is the largest economy in Southeast Asia. Annual GDP growth has been reaching 5% for two decades, which is an impressive indicator. The country is at the stage of active development in every sense of the word.


Notice! So far, Indonesia still has a high percentage of the poor population – the country is characterized as a lower-middle income economy (an economy with income below the average, GNI per capita is from $1,036 to $4,045). The availability of skilled labor is also below average. However, analysts reasonably assume that by 2030 the middle class will increase from 52 to 118 million people.


Indonesia maintains loyal relations with foreign partners, is a member of the World Trade Organization (WTO). It is now one of the world’s leading countries with an emerging market. Among the main advantages of Indonesia for doing business are:

  • developed mechanisms for receiving foreign direct investments (FDI);
  • the state leaves available to foreigners a wide list of types of economic activity;
  • a large number of young and cheap labor;
  • rich natural resources and favorable climate;
  • established relations with the international community, in particular, the existence of a large network of treaties on the avoidance of double taxation.



Benefits of registering a company in Indonesia with Lawrange


The growing popularity of Indonesia among entrepreneurs from all over the world has not gone unnoticed by the experts of JSC Lawrange. Our team has worked out optimal and profitable packages of services for business registration in the country. We work closely with Indonesian partners, which allows us to quickly solve tasks that require a presence in the country.


Important! Our approach does not involve the provision of separate services (although similar services can also be provided at the client’s request), but the solution of the assigned task. As a result, we are talking about a package of services: company registration + opening a corporate account + obtaining a license.



Features of company registration


Indonesia is not only the “paradise island” of Bali. The country is an archipelago of almost 18,000 individual islands. Living conditions and doing business in different parts of the country are very different. There is a gulf between running a business in Jakarta and somewhere on the outskirts.


In some regions and cities, the local authorities, along with the “rules from above”, establish their own regulations and conditions for businessmen. Therefore, in order to successfully start your project in Indonesia, it is necessary to conduct a preliminary reconnaissance of the region in which you plan to develop your business. A similar study can be ordered from the consultants of JSC Lawrange.


Important! On March 5, 2021, the “Omnibus Law” (on job creation) entered into force, according to which foreign investors received the right to 100% ownership of companies in some business areas. Open and very popular among foreign entrepreneurs are such activities as transport and forwarding services, tourism, hotel and restaurant business, sale and lease of real estate.


Meanwhile, 45 business classes retain a partial restriction on foreign ownership, while 58 business classes remain closed to foreigners as they are reserved for small and medium-sized businesses with 100% local ownership. In addition to the localization factor, when establishing a company in Indonesia, the accessibility of the direction for foreign entrepreneurs should be taken into account.


Important! To do business in Indonesia, you must obtain a business identification number (Nomor Induk Berusaha, NIB). (NIB) is actually a license issued by the OSS system managed by the Ministry of Investment/Indonesia Investment Coordinating Board (BKPM) after businesses have completed an application through the OSS system (single online submission). In order to obtain a NIB, a business must first be registered.


In Indonesia, a standard industry classification of activities is used (Klasifikasi Baku Lapangan Usaha Indonesia, KBLI). At the same time, KBLI and the process of its application sometimes confuses foreign investors. If the business activity differs from the classification indicated in the KBLI certificate, this can cause problems.


Within the framework of one KBLI, the conditions for obtaining a license differ depending on the level of capitalization and riskiness (Tingkat Risiko). The full list of KBLI can be found at the link. When choosing the type of activity, you should choose KBLI with a low level of risk, which is most suitable for the planned business activities. In case it is not possible to select KBLI with a low level of risk for the planned activity, KBLI with an average level of risk can be used. In this case, the company registration process will be longer and more expensive.



Types of business structures in Indonesia


Private, municipal and state enterprises operate in the jurisdiction. Among the main organizational and legal forms of business are limited liability companies (Perseroan Terbatas), representative offices (Kantor Perwakilan Perusahaan Asing, KPPA), cooperatives (Koperasi), partnerships (Maatschap, Firma, Commanditaire Vennootschap).


Notice! Legal entities with the ownership form of Perseroan Terbatas (PT), in turn, are divided into:

  • local companies (PT PMDN – Perseroan Terbatas Penanaman Modal Dalam Negeri);
  • companies with foreign investments (PT PMA – Perseroan Terbatas Penanaman Modal Asing).


Under Indonesian law, foreign direct investment is only allowed with a PT PMA license. As an option, you can open a representative office. But such an entity will not be able to conduct a full-fledged economic activity. However, PT PMA registration allows for 100% foreign ownership.



Conditions for PT PMA registration in Indonesia


In order to issue a PT PMA, firstly, it is necessary to comply with a number of requirements and go through a lot of bureaucratic procedures, and secondly, to make quite large financial investments. Let’s consider the main points related to the opening of PT PMA in Indonesia.



Share capital

The minimum authorized (investment) capital for PT PMA, according to Perka BPKM No. 4 of 2021, should be 10 billion Indonesian Rupiah (IDR) – approximately 670 thousand US dollars. According to the registration documents, this amount of capital has the status of “placed”. However, actual placement at the start is not required. Control by the regulator regarding the placement of authorized capital is carried out within the framework of reports provided by the company.


The authorized capital can be contributed in parts, there are no strict terms of placement. At the same time, the regulator must see the constant flow of funds. Replenishment of the company’s account for the purpose of “investment capital contribution” is not taxable. And this, with the right approach, provides an opportunity for tax maneuvers.




A legal entity in the form of PT PMA must have at least two shareholders. These can be individuals or legal entities. The option with private individuals allows you to register much faster and easier, so it is better.



Authorized representatives

Mandatory officers for a company in Indonesia are commissioner and director. It can be shareholders. At the same time, the director must be a resident of Indonesia and have a tax card (NPWP).


***Note: If the company registration in Indonesia is carried out without the presence of shareholders, representatives of Lawrange JSC open a company in which one of the two shareholders is a commissioner and the director is a local nominal working for the client under the contract.



Local director

We take it upon ourselves to resolve the issue with the local (nominal) director. Such a hired person will work under the contract, performing all the necessary assignments, including collecting original documents from registration authorities and opening a corporate bank account.


Notice! The services of a nominal director cost from 200 euros and more every month. At the same time, you can do without a nominal director. But then you will have to be present at the opening of the company in person.


The contract with the director, in particular, regarding the restriction of access to corporate accounts, does not remove 100% of all risks. To ensure full control of funds by the business owners, we recommend removing the director from the company after opening all accounts and then appointing a second shareholder as director.



Taxation in Indonesia


The corporate tax (income tax) rate for PT PMA is 22%. The government’s announced reduction in income tax to 20% was canceled at the last moment. Companies must also pay VAT at the rate of 11%.


Important! Young companies can take advantage of tax relief. If the company has been in existence for less than 3 years and the annual turnover does not exceed IDR 4,800,000,000 (approximately USD 320,000), the tax will be only 0.5% of the turnover. When calculating the annual turnover, funds received as investment capital are not taken into account (replenishment of the company’s account for the purpose of “investment capital contribution” is not taxable). After 3 years or in case of exceeding the annual turnover, the standard taxation system is included. Tax preferences in Indonesia are also given to companies operating in free economic zones. There are 19 special economic zones/free trade zones in Indonesia. Activities on their territory provide simplified access to the world market, as well as certain benefits in the field of taxation.


Reporting in Indonesia must be submitted on a quarterly and annual basis (in some cases – monthly). In addition to the main tax reports, reports should be submitted:

  • on investment activities and capital investments (LKPM),
  • to the social security body (BPJS).


Notice! If the owners plan to use the PT PMA company not for actual business in Indonesia, but for the transit of funds, payment of bills, buying and selling of cryptocurrency or other similar purposes, it is necessary to create an appropriate legal structure with affiliated firms and partner companies. Such a structure will provide freedom of tax maneuvers without attracting the attention of the regulator.


In such cases, we advise:

  • submit all reports in a timely manner;
  • to show income for corporate tax, according to the type of activity and compared to the volume of investments.



Necessary documents for company registration


To open a company in Indonesia, you will need the following documents:

  1. personal documents of the owners (passports, documents confirming the place of residence, etc.) and a photo with a red background, size 3×4 and 4×6 (4 pieces each);
  2. a description of the management structure and share of ownership or capital for the founders of PT PMA;
  3. application for obtaining a basic business license (BKPM approval);
  4. a bank certificate confirming the contribution of authorized capital;
  5. a document confirming the presence of an office.



Company registration process


The step-by-step algorithm for business registration in Indonesia with the support of the Lawrange Bar Association looks like this:



Step 1.

The client sends us the passport data of the shareholders in whose name the company will be registered. It should be at least two people.


Step 2.

The client creates a company name in accordance with the requirements:

– at least three different words (according to the terms of the Ministry of Justice and Human Rights);

– in English;

– combinations of letters and numbers that have no meaning are not allowed;

– the words must not contradict morality or mislead, be similar to the names of state institutions or organizations that are already functioning.


***Notice: The company name is reserved by the General Administration of Legal Affairs and then checked by the Legal Entities Information System to ensure that other companies have not already used the name.



Step 3.

The client selects and informs us of the types of activities (KBLI) – can be viewed at the link.



Step 4.

Business owners sign a contract with a nominal director – he is given the right to sign documents at a notary. Photocopies of this and other documents are immediately forwarded by e-mail. Originals are delivered to Indonesia within 30 days.



Step 5.

The client makes a 50% advance payment.



Step 6.

Company registration and issuance of statutory documents are carried out within five working days. If a non-standard license is required, the term may increase to 15 working days.


A legal entity is registered in the One Single Submission System (OSS). Company is provided with NIB.


Important! NIB is a unique 13-digit number that identifies a company profile in Indonesia. It is also used as:

– Import license (formerly API-U);

– Customs identification number (NIK);

– Business registration number (formerly TDP).


NIB also automatically registers PT PMA with the Health and Social Security System (BPJS Kesehatan dan BPJS Ketenagakerjaan). Usually, the operating (technical) license is issued on the same day as the NIB. But some types of activities (for example, trading and consulting business) have additional requirements, which may cause a delay in obtaining this permit.



Step 7.

After the company is established, a taxpayer identification number (NPWP) is obtained from the tax office at the location.



Step 8.

The client is sent electronic copies of documents to the company with notarization.



Step 9.

The client checks the documents sent to him for the company, and makes the remaining 50% of the payment.



Step 10.

A bank account is opened within five to seven working days. After opening an account, you can order corporate cards for the company. You can also open a cryptocurrency account within five to seven business days.


Attention! The total time for company registration and account opening is roughly three to four weeks.



Opening accounts for the company


With our support, you can open both a bank account and a cryptocurrency account on a crypto exchange.



Corporate bank account

In order to open a bank account, the presence of the company director is required. Immediately after opening an account, the client gets access to online banking (to his personal account) and can withdraw money for this account. But it is possible to send funds only if there is a personal confirmation of the director in the bank. After two weeks, a token (transaction confirmation device) is sent from Jakarta, which enables any payments to be made without the involvement of a nominal director.


You can get corporate cards. Their delivery time is four weeks on average. Corporate cards allow you to pay at offline terminals and withdraw cash around the world. However, online payments are not available.


Notice! Most banks in Indonesia are configured to work with the domestic market and with the local currency – IDR. At the same time, we work with banks that open multi-currency accounts and have correspondent accounts abroad, which allows us to make international transfers with most countries of the world.


Banks set low monthly limits for exchange from IDR to foreign currency (starting limit is 25,000 USD). These limits are set to reduce the holdings of funds in foreign currencies for companies that receive their income in IDR. At the same time, the limits for sending funds abroad with automatic conversion into the currency of the recipient’s bank are not actually established. There are also no limits on receiving, storing and sending funds in foreign currencies.


Opening a cryptocurrency account

To open a corporate account on the crypto exchange, the client registers an account with his mobile phone number and email, and the director goes through AML/KYC procedures. Having a corporate cryptocurrency account allows you to buy and sell cryptocurrency using the company’s bank account. For example, you can deposit funds in cryptocurrency on the exchange, then transfer them to a bank account and pay for contracts with counterparties via SWIFT.


In Indonesia, no tax returns are submitted for funds in cryptocurrency. All buying and selling transactions are done in IDR only. Only internal commissions of the exchange are charged for transactions, withdrawals in cryptocurrency are subject to an additional tax of 0.33%.


Notice! Cryptocurrency in Indonesia is in a semi-legal status, it is prohibited as a means of payment, but legalized as an asset (Commodity). There are no limits for buying cryptocurrency, but there are limits for withdrawing from the exchange, which must be consistently increased (the starting limit is about 50,000 USD per day).



The cost of registering a company in Indonesia


The cost of the basic package of Lawrange JSC services for opening a PT PMA company in Indonesia is 14,500 euros, and includes:

  • legal entity registration support (including KBLI);
  • office rent for a year;
  • opening a bank account;
  • nominal service.


The following services are provided additionally and are not included in the price of the basic package:

  • opening a cryptocurrency account – 1,500 euros;
  • change of statutory documents (change of director) – 1,900 euros;
  • additional KBLI – 900 euros (adding KBLI after the establishment of the company entails costs for changing the statutory documents and increasing the authorized capital);
  • additional licensing – 900 euros;
  • corporate cards (3 pcs.) – 1,500 euros;
  • KITAS investor visa – 1900 euros.


***Notice: The KITAS investor visa legalizes your stay in the country and gives you the opportunity to freely enter Indonesia for two years, the opportunity to purchase property (house, car) in your name, access to social services (medicine, insurance). It can be extended once – for a total of four years.


Annual maintenance of the company includes at least the following costs:

  • office rent (from the second year) – 1,500 euros;
  • nominal director’s salary – 3,900 euros;
  • reporting by a local accountant – 1,900 euros.





If you plan to open a company in Indonesia, you will have to go through a rather complicated procedure for filing documents. For some sectors and business lines, legislation and regulations of regulators set additional restrictions. Some businesses in this jurisdiction are completely closed to foreigners. However, at the same time, foreign investors are expected and accepted in the country, so the task of opening a company can be solved.


With the help of representatives of the Lawrange Bar Association, you can minimize the efforts to open a business in Indonesia. Each of our services is based on practical experience, so every cent of the client is not spent in vain. Give us a task – and we will immediately start preparing the ground for the start of your business project in Indonesia.




How long does it take to register a company in Indonesia?

In the basic version, the duration of business registration is three to four weeks. However, if you need to obtain a special license, it may take an additional week or two.



Can foreigners register a company in Indonesia?

So. Moreover, 100% foreign ownership of companies – PT PMA – is allowed in Indonesia from 2021. However, the jurisdiction does not open all areas of activity for foreign citizens.



What banks exist in Indonesia?

The banking system of the country includes more than a hundred institutions: state, private, branches of foreign banks. Permata Bank, Bank Central Asia, Mandiri Bank, Pembangunan Daerah Bali and others are popular. At the same time, most banks are focused on working with the Indonesian rupiah. If you are interested in this question, a Lawrange specialist will tell you in which Indonesian bank you can open a multi-currency business account.