Types of Companies in Indonesia for Foreigners

Types of Companies in Indonesia That Foreigners Can Open

The strategic location, government’s anti-corruption programs, and a booming large economy are just some of the reasons for Indonesia company registration. Furthermore, these days, the company registration process is becoming increasingly simple for foreigners as well. Notably, various types of companies in Indonesia are available for foreign investors.

Foreign investors can choose between three business structures for starting an Indonesia Company. Specifically, they are a Foreign-Owned Organisation (PT PMA), a Private Limited Company (PT), and a Representative Office (RO).

 

Foreign-Owned Company (PT PMA)

This choice is the most popular for international investors as it permits up to 100% foreign ownership. To know whether a business sector permits complete foreign proprietorship, however, you need to check the Negative Investment List.

Since the company registration process has been smoothed out, it takes simply 1 to 1.5 months to enlist a PT PMA. The PT PMA registration is also possible online through an incorporated framework called the Online Single Submission (OSS) framework.

Foreign investors likewise like setting up a PT PMA because it can support work permits and visas for its representatives.

The base capital necessity for PT PMA is IDR 10 billion, with the paid up capital of roughly IDR 2.5 billion needed to be paid ahead of time.

 

Privately Owned Company (PT)

A PT only permits local ownership. As such, the proprietor of a PT should be an Indonesian resident. There are no limitations concerning business areas and business exercises while setting up a PT.

However, when discussing the types of companies in Indonesia, foreign investors can still open a PT. However, they need a local representative who will be the legal beneficiary of the business.

Notwithstanding, the capital requirements for setting up a PT is a lot lower. The reach is between IDR 50,000,000 and IDR 10,000,000,000.

Foreign entrepreneurs who wish to enter the Indonesian market quick can choose to buy a shelf company. A shelf company is an ‘empty company’, which isn’t in use. If you do so, the operations can begin within a week.

 

Representative Office (RO)

A Representative Office is the most straightforward and least complex business vehicle in Indonesia. There is no base capital necessity. However, it is only for research purposes, and a company can’t conduct business activities with an RO. Notwithstanding, a RO doesn’t need local investors.

 

Conclusion

Choosing among the types of companies in Indonesia requires understanding your needs. If you want to open a full-fledged corporation with a lot of freedom, go for a PT PMA. On the other hand, if you want to make lesser investments, open a PT. However, make sure that you can trust the local partner without a shred of doubt. And the representative office is still there if you are still testing the waters.

Are you thinking of doing an Indonesia Company Setup? 3E Accounting Indonesia is the leading corporate service provider in Indonesia, with experienced personnel who can help make your company registration process effortless and swift.