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)
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.
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.
Solutions for service sector companies in Indonesia
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:
|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)|
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:
If I have a local shareholder, do I get a discount?
Contact us and we will provide you a custom quote.