Starting and growing your business in Indonesia

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Opening a Construction Company in Indonesia

Latest changes to the Negative Investment List revised how foreign investors can open a construction company in Indonesia.

There are two ways in opening a construction company in Indonesia – by establishing a limited liability company (PT PMA) or via Foreign Construction Service Representative Office (BUJKA). Continue reading…

Undername Import: Importing Goods to Indonesia without Licenses and Incorporating

Opening an import company in Indonesia can take four to five months or even longer. And having import license is required for even very small shipments.

If you don’t want to wait for that long or cannot / don’t want to meet all the import company requirements there are  good news though – in this article we will tell you about an alternative, legal, method to get your goods to Indonesia without import license or even incorporating your company. Continue reading…

Establishing E-commerce company in Indonesia

Starting an E-commerce company in Indonesia used to be in a legal grey area. Despite the uncertainty, e-commerce has been a very popular industry among both local and foreign companies.

In May 2016, Indonesia finally liberalised portions of the foreign ownership on E-commerce companies under the terms of its agreement with the DNI (Negative Investment List), a list of business sectors that are to be exempted from foreign ownership.

According to the latest DNI, e-commerce companies are allowed to have up to 100% foreign ownership but under certain conditions. Continue reading…

Guide To Finding Office In Jakarta

2016 is great time for finding office in Jakarta since the demand for office space in the Indonesian capital Jakarta has been outpacing demand.

The vacancy rate for Jakarta office market rose from 4.8% in 2014 to 8.4% in June 2015. For grade A office spaces the change has been even more dramatic – it rose from 6.4 percent at the end of 2014 to 17.1 percent by the middle of 2015. (source)

This means that as a potential tenant you have more negotiation power than in the past and with the help of a great agent you can get a very solid deal. Continue reading…

Compliance in Indonesia

There are various regulations that a company must follow in order to ensure that their compliance in Indonesia is done correctly.

The key areas foreign owned businesses must follow in terms of compliance are tax reporting, investment reporting and BPJS programs. Continue reading…

Buying Property In Bali As a Foreigner

Bali is not only known as a comprehensive travel and holiday destination. It has also become an increasingly popular location for investing in property.

However, not all foreigners buy property in Bali safely. It’s common for foreign investors to acquire land using a local nominee which gives the foreigner essentially no protection for its investment.

Continue reading…

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…