Set Up Nominee Company In Indonesia

Indonesia's Investment Law requires foreign owned companies to invest US$1 million dollars to get investment approval. Nominee Company gives you the ability to have a legal entity that you fully control but that won't have to comply with foreign company regulations.

(Planning to invest more than $1 million? Click here to set up a PT PMA)

It's a lot more difficult to set up a foreign owned company in 2015

Investment breadown

Until this year, companies could just have an investment plan on paper and Investment Coordinating Board (BKPM) would rarely reject it.

Since March 2015, massive number of (especially service sector) company applications have been rejected. The key reason - BKPM is not convinced that those companies would actually invest all that money in Indonesia.

BKPM knows that foreign owned companies have been faking their investment plans and are now very cautious of whether the investment will actually take place or not.

Audited financial report

Every foreign owned company is required to get a permanent business license within the time they were given with the initial investment approval. Without that license, company is unable to get additional licenses and permits such as import license which is critical for a lot of companies.

Since this year in order to receive the permanent business license companies must have audited financial reports that prove that the investment was made.

So unless you actually realized the Investment Plan of US$1 million you won't be able to get permanent business license.

Three solutions to set up a service company in Indonesia

Solutions for service sector companies in Indonesia

  • Set up a limited liability company with 10 billion IDR (equals to ~1 million USD).
  • Instead of a limited liability company (PT PMA) set up a representative office. This works as long as you don’t plan to earn revenue in Indonesia.
  • Use a locally owned nominee company that you have full control over and that doesn't need to comply with the foreign owned company regulations.

Nominee Company service

Since many service sector companies are not ready to invest 10 billion Rupiah within a year but still want to earn revenue in Indonesia, Indosight has prepared a specialized service for the companies in the service sector. This service includes:

  • A package of legal contracts to safely have your company owned by Indonesian shareholders without them having any control over the company or its finances
  • Monthly compliance services to ensure the company declares correctly newly implemented employee taxes (BPJS)
  • You are legally the director of the company and have full control over the company

Comparison between foreign owned and Nominee Company

Foreign owned company (PT PMA) Nominee Company
Legal entity type PT (foreign owned) PT (locally owned)
Legal owner in Articles of Association You Indosight based on loan agreement with you
Minimum capital US$1 million 600 million IDR (~US$50,000). Less if you don't wish to employ any foreigners nor be a director.
Maximum foreign ownership 0-100% depending on your business classification No limitation
Hire foreign experts Yes Yes
Change shareholders whenever required Yes Yes
Control over finances Director of the company Director of the company (which can be you)

Nominee Company service includes everything you need to operate a business in Indonesia

Included to Nominee Company Package

  • Registered address, which is a requirement for any legal entity in Indonesia. If you have your own physical office, you can use your own address.
  • Compliance (tax and BPJS reporting), ensuring your monthly and annual reporting is done correctly.
  • Incorporation fees, including everything from principal license to tax number.
  • 2 nominee shareholders, in order to become a local company you will have to have two Indonesian citizens or companies as shareholders
  • 1 nominee commissioner
  • Set of legal agreements, which will give you full control over company and allow you to change shareholders when you wish so

Get fee estimation

The information provided will remain confidential to Indosight and will only be used to prepare you a non-binding quote.

Frequently asked questions

Why company XYZ in my industry could set up company without restrictions?

Until this year foreign owned companies were not required to give detailed breakdown of ther investment plans. Also there was no requirement to prove your investment plan realization in order to get the permanent business license.

Companies that received their licenses prior to that are not affected.

Another agency claimed that in order to set up a PT PMA you don't actually have to put up capital.

This used to be the case until 2015. Agencies with less clients might not be aware of the changes or telling to prospective clients whatever helps them to win clients.

How safe is nominee shareholding?

It's safe as long as you have a legally solid set of contracts between yourself and the nominee shareholders. Also you will be formally the director of the company which gives you full control over the company finances. We encourage our clients to reguarly transfer finances out of the Nominee Company to give you extra peace of mind.

Is it illegal?

No, as we are using Pledge of Shares and Exchangeable Bonds agreement. The one that is illegal is "trust agreement".

Could future regulatory changes close down my company?

No, there are two conditions that would close down the company:

  • Bancrupcy
  • Shareholders decide to close the company (not possible for Nominee Company due to Pledge of Shares)

If I have a local shareholder, do I get a discount?

Contact us and we will provide you a custom quote.

Indosight's offices: Jakarta | Bali | Saigon