How to Register a Company in Indonesia: A Step-by-Step Guide

As the largest economy in Southeast Asia, Indonesia offers more than just access to a vast market. It presents opportunities through its expanding middle class, advancing infrastructure, and digitally skilled population for entrepreneurs and investors looking to incorporate a company in Indonesia; understanding the regulatory framework is essential. This guide provides a detailed overview of how to register a company in Indonesia, breaking down each legal and procedural step to ensure smooth and compliant company incorporation in Indonesia.

Why Incorporate a Company in Indonesia?  

Indonesia offers a welcoming environment for business in Southeast Asia, making it an ideal location for international expansion. Its large consumer base, expanding digital economy, and ongoing government reforms create significant chances for businesses. Whether you are entering the market for trading, services, or manufacturing, understanding how to register a company in Indonesia is crucial for long-term success and compliance with local laws.

Types of Business Entities for Company Incorporation

Tip:Most foreign investors incorporate a to operate and scale in Indonesia legally.

How to Incorporate a Company in Indonesia: Step-by-Step Process

Step 1: Choose the Right Business Structure

Select a legal entity that fits your business goals:

• PT PMA (Perseroan Terbatas Penanaman Modal Asing) – Foreign-Owned Company 
• PT (Perseroan Terbatas) – Local Company for Indonesian nationals 
• Representative Office – For non-commercial activities like market research 

Read more about PT and PMA Company in Indonesia

Step 2: Reserve Your Company Name

• Apply through MoLHR (Ministry of Law and Human Rights) 
• Ensure the name is: 
  • Unique 
  • At least three words 
  • Not similar to existing trademarks or company names 

Step 3: Draft the Deed of Establishment

• Prepared by a licensed notary in Bahasa Indonesia 
• Should include: 
  • Company name 
  • Business activities 
  • Shareholders and capital structure 
  • Articles of Association 
• Submit to MoLHR for legal entity status. 

Step 4: Obtain a Tax Identification Number (NPWP)

• Register with the local tax office 
• NPWP (Nomor Pokok Wajib Pajak) is required for: 
  • Tax reporting 
  • Banking 
  • Legal compliance 

Step 5: Secure a Domicile Letter (if outside Jakarta)

• Issued by the Kelurahan (district office) 
• Confirm your business address. 
• Note: Not required in Jakarta due to OSS system integration 

Step 6: Register via OSS (Online Single Submission)

• Register at: https://oss.go.id 
• Obtain NIB (Nomor Induk Berusaha) – Business Identification Number 
• Auto-registers your company with: 
  • BPJS Kesehatan – Health Social Security 
  • BPJS Ketenagakerjaan – Employment Social Security 
  • Customs (if applicable) 
  • BPS (Badan Pusat Statistik) – Statistics Bureau 
  • Ministry of Manpower 

Step 7: Apply for Sector-Specific Business Licenses

Based on your KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) code, you may need:

• SBU (Sertifikat Badan Usaha) – Construction license 
• Food and beverage licenses (e.g., health or halal) 
• OJK (Otoritas Jasa Keuangan) approval – For finance/fintech businesses 

Step 8: Open a Corporate Bank Account

Submit the following:

• Company Deed 
• NPWP 
• NIB 
• Director’s ID 
• Signature specimen 
• Note: Some banks may require notarised translations for foreign shareholders 

Step 9: Employment and Foreign Worker Registration

If hiring foreign staff:

• Apply for RPTKA (Rencana Penggunaan Tenaga Kerja Asing) – Foreign Worker Employment Plan 
• Then apply for: 
  • • KITAS (Kartu Izin Tinggal Terbatas) – Temporary Stay Permit
    • IMTA (Izin Mempekerjakan Tenaga Asing) – Work Permit

Timeline & Cost to Incorporate a Company in Indonesia

• Total Time: 3–6 weeks
  Total Cost Range: $1,000–$5,000+ depending on structure, licenses, and consultants
• Capital Requirement for PT PMA:
  Minimum IDR 10 billion stated capital (approx. USD 650,000) for foreign-owned companies

Post-Incorporation Compliance in Indonesia  

Once your company is incorporated, maintaining compliance with local regulations is crucial for ongoing operations. Below are the key obligations that every registered company must fulfil in Indonesia:

1. Tax Compliance

• Submit monthly and annual tax reports to the Directorate General of Taxes 
• Common taxes include: 
  • PPh (Pajak Penghasilan) – Income Tax 
  • PPN (Pajak Pertambahan Nilai) – Value Added Tax (VAT), if applicable 
• Companies must obtain a Tax Identification Number (NPWP – Nomor Pokok Wajib Pajak) 

2. Financial Reporting

• Prepare Annual Financial Statements in accordance with SAK (Standar Akuntansi Keuangan) – Indonesian Financial Accounting Standards. 
• Reports must be submitted in the Bahasa Indonesia language. 
• Audited statements are required for PT PMA (foreign-owned companies) and businesses exceeding regulatory thresholds. 

3. Investment Activity Reporting (LKPM)

• PT PMAs must submit LKPM (Laporan Kegiatan Penanaman Modal) – Investment Activity Report. 
• Filed quarterly or biannually through the BKPM (Badan Koordinasi Penanaman Modal) – Indonesia Investment Coordinating Board 
• Covers capital realisation, business activities, and employment data 

4. BPJS Registration & Contributions

Mandatory registration for all companies with employees:

• BPJS Kesehatan (Badan Penyelenggara Jaminan Sosial Kesehatan) – Health Social Security 
• BPJS Ketenagakerjaan (Badan Penyelenggara Jaminan Sosial Ketenagakerjaan) – Employment Social Security 
• Employers must submit monthly contributions for all staff, including directors and other senior personnel. 

5. Manpower and Foreign Worker Reporting

• Report hiring data to the Ministry of Manpower (Kementerian Ketenagakerjaan) 
• If hiring foreign nationals, maintain a valid: 
  • RPTKA (Rencana Penggunaan Tenaga Kerja Asing) – Foreign Manpower Utilization Plan 
  • KITAS (Kartu Izin Tinggal Terbatas) – Limited Stay Permit 
  • IMTA (Izin Menggunakan Tenaga Kerja Asing) – Work Permit 

6. Business License Renewals

• Some sector-specific licenses require annual or periodic renewal. 
• Ensure that business activities and licensing remain updated in the OSS (Online Single Submission) system. 

7. Corporate Governance Obligations

• Hold Annual General Meetings (AGMs) of shareholders as required. 
• Report and update any changes in: 
  • Shareholding structure 
  • Company address 
  • Board of Directors or Commissioners 
• Changes must be registered with the MoLHR (Ministry of Law and Human Rights)

Tip: Failure to meet compliance obligations can lead to penalties, license suspension, or blacklisting.

Common Mistakes During Company Incorporation in Indonesia

Avoiding these common mistakes can save time, prevent legal issues, and help with a smooth setup:

1. Choosing the Wrong Business Structure  

Many foreign investors mistakenly register as a local PT, not realising it doesn’t allow foreign ownership.  

Always verify if your business qualifies for PT PMA status.

2. Using a Residential or Virtual Address Improperly  

Some locations are not suitable for company registration or licensing.  

Use a proper commercial address that adheres to zoning regulations.

3. Inadequate Understanding of KBLI Codes  

Choosing the wrong KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) business activity code can lead to denied licenses.  

Match KBLI codes with your actual business operations.

4. Underestimating Capital Requirements  

A PT PMA must declare IDR 10 billion in stated capital.  

Ensure your capital plan aligns with licensing and sector requirements.

5. Missing Investment Activity Reports (LKPM)  

Many companies overlook the requirement to file LKPM with BKPM (Investment Coordinating Board), which can result in penalties.  

Set a compliance calendar for required reporting.

6. Delays in BPJS and Employee Registration  

Failing to register employees for BPJS Kesehatan and BPJS Ketenagakerjaan can result in labour law violations.  

Enrol employees in Social Security programs as soon as possible after hiring.

7. Assuming One License Covers All Activities  

Licenses are specific to certain activities and locations. Operating outside the limits can lead to legal trouble.  

Obtain all necessary sectoral and local permits.

Conclusion

Navigating the process of incorporating a company in Indonesia requires careful planning, adherence to local laws, and a thorough understanding of the specific requirements applicable to your sector. Whether you are a startup or an established international business, following the proper steps—from selecting the correct entity to completing OSS registration and obtaining the necessary licenses—can help you build a strong foundation. With the appropriate support and preparation, understanding how to register a company in Indonesia can unlock long-term success in one of Asia’s most vibrant markets.

Frequently Asked Questions