If you are looking to grow your business in Asia, Indonesia is a place to look in. With the rich natural resources, young population, and ease of accessibility to all the places globally, this will be another excellent option for foreign entrepreneurs. 

Type of Companies in Indonesia

Before registering a business in Indonesia, you need to understand and choose the types of business entities. Here are the types of companies that are available in Indonesia. 

Local Company (PT)

A Local Company(PT) is the most common business entity in Indonesia. As this type of business entity is intended for the locals only, for a foreigner who wishes to set up a PT  in Indonesia, you will need to have a minimum of 2 local Indonesian shareholders, 1 director, and 1 commissioner. 

Related Read: Why should you set up a local PT? 

Representative Office

Representative Office (RO) is considered as a branch office of a foreign company overseas. However, a representative office can only conduct market research, build brand awareness in the local market. A representative office is not allowed to perform activities that generate profits.

If you wish to start to establish your company presence in Indonesia before you make an enormous investment, this would be an ideal choice. 

Unlike the other entities, a representative office only requires a minimum of 1 Chief of Representative Office. So, how to set up a representative office (RO) in Indonesia? Below are some of the required documents: 

• Letter of Appointment 
• Articles of Association of parent company
• Copy of valid passport (foreigner) or  ID card number and tax number (Indonesian) for the proposed RO Head
• Registration at Chamber of Commerce of parent company copies
• Power of Attorney to sign the application
• Letter of Intent 
• Letter of Statement from the RO Head stating that they are committed to staying and only work as RO Head without conducting other business in Indonesia

Foreign Owned Company (PT PMA)

A Foreign Owned Company can be fully owned by foreigners in Indonesia. This type of business entity can choose up to 3 business categories without any investment plan after getting all the required licenses. The minimum incorporation requirements for this business entity is:

• Minimum 2 local shareholders
• 1 Director
• 1 Commissioner

In general, it takes 2 to 6 months to set up a PT PMA. The minimum capital required for a PT PMA is IDR 110 billion and must deposit a flat minimum of IDR 10 billion in advance. 

Here are the required documents to set up a foreign owned company (PT PMA): 

• Company’s name approval
• Deed of incorporation
• Legal entity approval
• Tax ID (NPWP) registration
• Domicile letter
• NIB application
• Other licenses application

Related Read: Understanding Indonesia’s Positive Investment List

How can WeCorporate help?

Our professional business advisors will be able to provide you with comprehensive business incorporation services. Acting as your local representative, we will be helping you to register your business smoothly and hassle-free following regulations.