Considering making a business in Indonesia and looking to find some reliable advice? Then look no further! In this article we delve deep into everything you need to know to establish a business in Indonesia in 2025!
Making a company in Indonesia may seem like a challenging thing to do, but with LMI Consultancy’s knowledgeable and proactive team we take away the worry and the stress to provide hassle free and cost-effective solutions.
At LMI Consultancy we offer free consultation services, so if you have more questions or need to know more, feel free to reach out to us and we will be happy to help!
Meet the Writer: Givenia Shintia – Legal & Tax Manager at LMI Consultancy
Givenia Shintia Regina, known as Nia, is a seasoned legal professional with a strong academic foundation from the Faculty of Law at Gadjah Mada University, Yogyakarta. Her exceptional academic performance laid the groundwork for a career marked by precision, integrity, and results-driven legal support.
In her role as Legal and Tax Manager at LMI Consultancy, Nia brings years of hands-on experience in foreign investment company setup, business licensing, and regulatory compliance across Indonesia’s diverse and evolving business landscape.
What sets Nia apart is her ability to translate complex legal frameworks into actionable insights. Having worked closely across various industries and corporate functions, she offers a practical, business-minded approach to legal consultation—one that considers not just the law, but also the realities of day-to-day operations. Her multi-sectoral exposure gives her the agility to provide comprehensive, strategic legal advice tailored to each client’s goals.
Answering About Doing Business in Indonesia: Setup a PT PMA to Handling Business License Registration
Do you need to register a company in Indonesia?
Yes, registering a company in Indonesia is essential for both local and foreign entrepreneurs aiming to operate legally within the country. For foreign investors, establishing a Foreign Direct Investment Company, known as a PT PMA (Perseroan Terbatas Penanaman Modal Asing), is the standard route. This legal entity allows foreign individuals or entities to conduct business activities in Indonesia, ensuring compliance with local laws and regulations.
What are the business entity types in Indonesia? Understand PT, PT PMA, Representative Offices and more
Indonesia offers several types of legal entities, but the most common ones for commercial purposes are:
- PT (Perseroan Terbatas): PT translates to “limited liability company”. This is the standard legal entity for both local and foreign investors.
- PT PMDN (Penanaman Modal Dalam Negeri): A or local Indonesian companies. A PT PMDN must be owned by local (Indonesian investors) as the main shareholder of the limited liability company.
- PT PMA (Penanaman Modal Asing): A foreign-owned limited liability company. This entity acts as a foreign investment company in Indonesia with minimum capital requirements.
- Representative Office (KPPA/K3PA): For foreign companies that wish to explore the Indonesian market without engaging in direct commercial activities.
- CV (Commanditaire Vennootschap): A limited partnership often used by small businesses but not available for foreign investors.
The most suitable type depends on the ownership structure and the business activities involved.
What are the requirements to make a company in Indonesia?
Requirements vary depending on whether the company is locally owned (PT PMDN) or foreign-owned (PT PMA).
For a PT PMA (foreign owned business in Indonesia):
- Minimum paid-up capital: IDR 10 billion (~USD 650,000).
- Minimum of 2 shareholders: Can be individuals or legal entities (local or foreign).
- 1 local director and 1 commissioner: The director must be domiciled in Indonesia.
- Office address and lease agreement.
- Business sector eligibility: The business must not be listed in the Negative Investment List (Daftar Negatif Investasi) as restricted or closed to foreign ownership.
For a PT PMDN (Locally Owned Company):
- Lower capital requirements, depending on the company’s classification
- Ownership: All shareholders must be Indonesian nationals or entities.
- Registration process: Follows a similar process through the Online Single Submission (OSS) system, with comparable documentation like PT PMA.
Shareholders Policy for PT PMA Establishment
A PT PMA company in Indonesia requires a minimum of two shareholders, who can be individuals or corporate entities. The company must have at least one director and one commissioner. Notably, if any foreign individual or entity holds shares in the company, regardless of the percentage, it qualifies as a PT PMA. This structure facilitates foreign investment while ensuring adherence to Indonesian corporate governance standards.
Are there any additional licenses people need to operate businesses in Indonesia?
Yes, especially if your business is in a medium- to high-risk sector as categorised by the Investment Coordinating Board (BKPM). These sectors often require additional licenses beyond basic company registration and NIB—such as operational permits, sector-specific certifications, and environmental licenses.
What is NIB? Register a Business Identification Number
The Nomor Induk Berusaha (NIB) is a unique Business Identification Number issued through Indonesia’s Online Single Submission (OSS) system. It serves as a comprehensive business license, integrating various permits such as the Company Registration Certificate (TDP), Import Identification Number (API), and customs access. Obtaining an NIB is a critical step in legitimizing your business operations in Indonesia.
Can you register a business in Indonesia with more than 2 investors?
Yes, absolutely. The minimum requirement is two shareholders, but there is no maximum limit on the number of investors or shareholders a company can have.
Can you set up a business in Indonesia without a physical office?
Yes, you can start a business using a virtual office, especially in the early stages. This is a common practice in Jakarta and other major cities. However, the virtual office must be registered and approved for commercial use and compliant with the location zoning (domicile zoning). Keep in mind that certain licenses or business activities may eventually require a physical office.
Once you register an office address in Indonesia, is it easy to move it if necessary?
It’s possible, but it involves some paperwork. If you’re moving to a different regency or city, you will need to:
- Hold a General Meeting of Shareholders (GMS) to approve the change.
- Update the company’s Articles of Association.
- Submit changes to the Ministry of Law and Human Rights.
- Notify and update the Tax Office (KPP) if there’s a change in tax jurisdiction.
- Update your OSS and related licenses.
This is something that LMI Consultancy can fully assist with to ensure a smooth and compliant transition. We understand that moving can feel overwhelming, entrust the paperwork to a trustworthy agency, so you can stay focused on your core business.
What are the investment capitals to set up a PT or PT PMA in Indonesia?
For PT PMDN (local companies):
- Small: IDR 50 million to 500 million
- Medium: IDR 500 million to 10 billion
- Large: Above IDR 10 billion
For PT PMA (foreign investment company):
- A minimum paid-up capital of IDR 10 billion is generally required.
- Each business sector may have additional minimum investment thresholds or special requirements.
What are the advantages of PT PMA Registration over a PT for foreign investors?
A PT PMA allows foreign ownership and the legal right to conduct commercial activities in Indonesia. Other advantages include:
- Legal recognition and credibility in the eyes of local stakeholders.
- Ability to sponsor foreign work permits (KITAS) for foreign staff.
- Access to Indonesian banking and tax systems as a legally recognised business entity.
- Flexibility to repatriate profits under applicable laws.
A local PT (PT PMDN) does not allow foreign ownership, so it’s not an option for most foreign investors unless they enter through nominee structures, which come with legal risks.
Do you really need to have all the investment in my bank account to setup a business in Indonesia?
While the regulation requires a minimum paid-up capital (especially for PT PMA), in practice, the funds do not need to be physically deposited during the establishment stage. However, BKPM or other authorities may request proof of funds or an investment realization report at a later stage. It’s best to prepare the capital documentation in case of audits or compliance checks.
Steps to Register a Company in Indonesia
Pre-registration
Before establishing PT PMA or any company in Indonesia, it’s crucial to determine the appropriate legal entity type, such as a local PT (Perseroan Terbatas) or a foreign-owned PT PMA. Additionally, selecting a business classification code (KBLI) that aligns with your intended operations is essential, as it dictates licensing requirements and foreign ownership limitations. A knowledgeable consultant can provide clarity and ensure compliance with Indonesian regulations.
Company name
Choosing a company name in Indonesia requires adherence to specific guidelines set by the Ministry of Law and Human Rights. The name must consist of at least three distinct words, be unique, and not infringe upon existing trademarks or company names.
Prepare Company Documents
The preparation of foundational documents is a critical phase in company registration. The primary document, the Deed of Establishment, outlines the company’s Articles of Association, detailing its purpose, structure, and operational guidelines. This deed must be notarised by a public notary and signed by all shareholders. Additional documents may include identification of shareholders and directors, proof of the company’s registered address, and other relevant legal documents.
Obtain Approval from The Ministry of Labour and Human Resources
After notarization, the Deed of Establishment must be submitted to the Ministry of Law and Human Rights for approval. The ministry reviews the documents to ensure compliance with Indonesian corporate laws. Upon approval, the ministry issues a Ministerial Decree, officially recognising the company as a legal entity.
Register with OSS System
The Online Single Submission (OSS) system is Indonesia’s integrated platform for business licensing. Through OSS, companies obtain the Business Identification Number (NIB), which serves as the company’s unique identifier and is essential for various administrative processes.
Fulfill Other Requirements
Beyond the primary registration steps, companies must fulfill additional requirements to commence operations. This includes registering for a Tax Identification Number (NPWP) with the Directorate General of Taxes, enrolling employees in the Social Security Administration (BPJS), and obtaining sector-specific licenses if applicable. Ensuring compliance with these requirements is essential for lawful and efficient business operations in Indonesia.
With all legal and administrative requirements fulfilled, the company is authorized to commence operations. This includes setting up a corporate bank account, hiring employees, and engaging in business activities as outlined in the company’s Articles of Association. Ongoing compliance with Indonesian laws and regulations is vital to maintain good standing and ensure the company’s long-term success in the Indonesian market.
Are there any business fields in Indonesia foreigners cannot be involved in?
Yes, the Presidential Regulation No. 10/2021 and No. 49/2021 (Positive Investment List) outline business fields that:
- Are closed to foreign investment, or
- Are open with limitations, such as requiring partnerships with local entities or capped ownership percentages.
Examples of restricted sectors include, Batik industry, alcoholic beverage manufacturing Certain transportation services,, Traditional medicine and herbal businesses, etc.
How long does it take to establish a PT PMA in Indonesia?
On average, it takes about 20 working days. However, with recent updates in the tax system integration and OSS (Online Single Submission), processing times may vary slightly depending on the business sector and office location.
After making a company in Indonesia, what do I need to do to ensure it is following local regulations?
To stay compliant, your company needs to:
- Submit monthly and annual tax reports.
- Submit quarterly business activity report (LKPM)
- Submit annual general meeting of shareholders along with the financial statements
- Renew licenses (if applicable)
- Ensure employment compliance, especially if hiring foreign workers.
- Stay updated with local regulations.
If you’re just starting and don’t yet have the capacity to hire in-house legal or secretarial staff, LMI Consultancy offers full compliance and corporate secretarial services to handle all of this for you—so you can focus on growing your business.
What are my monthly and annual tax obligations if I make a company?
As a company in Indonesia, you are obligated to:
- Submit monthly tax returns (e.g., VAT, income tax, employee withholding taxes).
- File annual corporate income tax reports to declare total profits and pay the final tax liability, adjusted against monthly installments.
- Pay taxes in accordance with your revenue, profit, and business activities.
If I want to set up a PT PMA, what visa do you recommend?
We recommend applying for a Work Visa or an Investor KITAS, depending on your role in the company. An Investor KITAS is particularly advantageous—it allows investors to stay and work legally in Indonesia without a separate work permit and is valid for up to 2 years.
About Investor KITAS (Investor Visa)
The Investor Visa (Limited Stay Permit) is designed for foreign nationals investing in Indonesia. To be eligible, an individual must invest a minimum of IDR 10 billion in a PT PMA. This visa allows investors to reside and conduct business activities in Indonesia, reflecting the government’s encouragement of foreign investment.
About Work Visa
A Work Visa is mandatory for foreign nationals employed in Indonesia. The process involves obtaining a Rencana Penempatan Tenaga Kerja Asing (RPTKA) or Foreign Manpower Placement Plan, followed by the issuance of the visa. This permit is essential for legal employment and ensures compliance with Indonesian labor laws.
Work Permit and when it is needed during your business activities in Indonesia
A Work Permit, known as IMTA (Izin Mempekerjakan Tenaga Kerja Asing), is required for foreign employees working in Indonesia. Employers must obtain the RPTKA before applying for the IMTA. The IMTA specifies the job title, duration, and location of employment, ensuring that foreign workers are employed in positions that align with their expertise and the company’s needs.
Does LMI Consultancy really offer free consultations for Indonesia Company Registration?
Yes! LMI Consultancy offers free initial consultations to help you understand the process of establishing your business in Indonesia, clarify your options, and plan your market entry strategy effectively.
What other services does LMI Consultancy offer?
LMI Consultancy provides a full suite of business and individual services, including:
- Business establishment & corporate structuring
- Immigration services (Entry Permit, Temporary Stay Permit, Permanent Stay Permit)
- Real estate services (buy, rent, or property leasing assistance)
- Mortgage assistance
- Virtual office and office registration services
- Ongoing compliance, reporting, and secretarial services
We are a one-stop solution for anyone looking to build a strong and legal foundation for doing business in Indonesia.
If you have any further questions about legal entity establishment in Indonesia, contact LMI Consultancy and get your free consultation, either virtually or in person.
LMI Consultancy has 5 offices spanning across Jakarta & Bali and is renowned for being the market-leading agency in the country with over 70 highly trained business professionals. Since 2016, we have successfully guided over 35,000 people with their immigration, legal, tax and real estate needs, highlighting our dedication to market excellence and trust in the local market.
Contact us now and lets us guide you on Indonesia’s legal complexities!
