Starting and growing your business in Indonesia

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Compare Different Legal Entity Formats In Indonesia

Legal entity in IndonesiaWhen you conduct business in Indonesia there are various options for setting up a legal entity. Most common is to register a limited liability company (PT PMA) but there are also alternatives in case your capital is limited or you can handle transactions via a foreign entity. Continue reading…

Business opportunities outside of Jakarta and Bali

Business Opportunities outside Jakarta and Bali

The capital district of Jakarta and the paradise island of Bali are in the spotlight when it comes to doing business in Indonesia. About two thirds of all expats live in these two areas. But Indonesia is changing. The Government’s ‘Masterplan’ for 2025 determines growth centers across the archipelago. We want to have a closer look. Continue reading…

Foreign Owned Company Registration In Indonesia

PT-PMA-cartonAll foreign owned companies in Indonesia are classified as PT PMA-s (stands for limited liability company with foreign direct investment). A company is a PMA as long as any of the shares are owned by foreigners.

An exception is representative office where foreign company is exploring business opportunities in Indonesia and is not generating any income from local activities.

Foreign companies that cannot or choose not to meet the foreign ownership requirements can set up a Nominee Company instead.

In this article we will guide you through the process of PT PMA company registration. We have worked with dozens of foreign companies from various industries so everything in this article is based on real world experience. Continue reading…

Indonesian Manpower Law: How To Hire in Indonesia

The Indonesian manpower law is protective of the interests of the workers. Therefore it is important to familiarize yourself with employer obligations according to the law.

In this article, we will explain your legal obligations as an employer in Indonesia. A special section is dedicated to discuss employee termination, which can be complex and even costly for the less prepared employer.

Continue reading…

Minimum capital requirement for setting up PT PMA

Foreign owned companies, called PT PMAs, are required to have a minimum capital of at least Rp. 10 billion (~$US750,000 with current exchange rates). This is Indonesia’s government way to protect local small businesses from foreign competition and limit the foreign investments only to large scale companies.

In the past the enforcement of the law used to be weak and therefore thousands of companies, especially in service sectors, were set up with capital only showed on paper. In 2015 Investment Coordinating Board (BKPM) has decided to tackle the issue and effectively ending the practice of setting up foreign companies with less capital.

The following article is about how the capital needs to be invested and reported.

Continue reading…

Opening A Representative Office in Indonesia

Opening a representative office is the fastest way to get a legal and market presence in Indonesia. It is also easier than setting up a limited liability company. It comes, however, with more limitations.

In this article, I will explain everything you need to know about establishing a representative office in Indonesia, and when you should prefer it over a limited liability company. Continue reading…

New Work Permit Regulations in Indonesia

To work legally in Indonesia, you must have a work permit (IMTA). Based on the work permit (IMTA), the Indonesian Immigration will issue your limited stay permit (VITAS) and the limited stay permit card (KITAS).

In this article, I should explain what it will take to obtain a work permit (IMTA), what can be expected during the process of getting one, and other necessary details.

Continue reading…

Indonesia Investment Climate Survey 2015

In October 2015 we conducted a study among Indosight blog subscribers to understand the opportunities and challenges of investing in Indonesia.

We received responses from 72 companies and while the study may not represent the entirety of foreign investors in Indonesia, it gives a good overview of the current investment climate.  Continue reading…

Obtaining Principal License in Indonesia

Principal license is one of the most important licenses a foreign owned company needs to obtain in Indonesia. It’s the initial permission from the Investment Coordinating Board (BKPM) that allows you to invest (but not yet operate) in Indonesia.

BKPM issued new regulation regarding principal license on 29th of September 2015 which changes various aspects of investing in Indonesia. In this article we go over the most important aspects of principal license and add our comments.

Continue reading…

New regulations make investments to Indonesia faster and clearer

Influenced by the report of mass media, some degree of fear about the new regulations concerning establishing a business in Indonesia has been developed. Some of them are justified and should be treated with caution. Just as the new work permit – or the mandatory use of rupiah regulation. However, some restorations do not or not enough receive the attention they deserve. This article focuses on those regulations which actually support the foreign direct investments to Indonesia. Continue reading…

Setting Up a Joint Venture in Indonesia

The decision of setting up a joint venture instead of a entirely owned Indonesian entity comes down to many factors in Indonesia. It might be a strategic reason or a requirement from the law. Continue reading…

Calculate your Import Tax and Custom Duty

Any goods coming from oversea to Indonesia custom territory are treated as import. Those goods are subjected to custom duty with tariffs vary from 0%-5% ; 5%-10% and more than 10%, based on the goods classification follow HS code. Continue reading…

Registering Consulting Company In Indonesia

August 2015 brought several changes to registering a consulting company in Indonesia. While this article is focused on consulting companies, such as management consulting or IT consulting, it applies for most types of service sector companies. For example web portals follow the same procedures.

The objective of BKPM, the authority behind the regulatory changes, is to address the issue that a lot of service sector companies have not been actually meeting the Rp. 10 billion minimum capital requirement. Essentially it means that the loophole of getting around that amount has now been closed. Continue reading…

Why You Should Get Permanent Business License for Your PT PMA

After the lengthy incorporation process you might expect that you’ve managed to beat the bureaucracy and your company is finally set to conquer the Indonesian market. But there is one license every business still needs to acquire – permanent business license.

Let’s look more closely what is it and why you will want to get it as soon as possible. Continue reading…

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