How to Register a Company in Indonesia: A Complete 2026 Guide
Indonesia, an archipelago situated between the Indian and Pacific Oceans in Southeast Asia, is the world’s fourth-most populous country and ranks prominently in the regional economy after China, Japan, and India. These factors make Indonesia a compelling destination for foreign investment and business expansion.
While company registration in Indonesia is generally straightforward, strict adherence to local legal and regulatory requirements is essential for successful incorporation of companies in Indonesia and long-term compliance. If you plan to set up a company in Indonesia, this comprehensive Indonesia company registration guide is a crucial resource.
What You Need to Know Before Your Indonesia Company Registration?
Indonesia, as a member of the Association of Southeast Asian Nations (ASEAN)—which includes Brunei, Cambodia, Laos, Malaysia, the Philippines, Singapore, Myanmar, Thailand, and Vietnam—benefits from favourable regional trade arrangements. These include low or zero tariffs, creating a highly advantageous environment for cross-border commerce.
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Access to a 667 Million+ Consumer Market
Businesses established in Indonesia can leverage these benefits throughout Southeast Asia while enjoying reduced tax burdens. This regional integration grants access to a combined consumer market of over 667 million people.
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Strong Global Trade Relationships
Additionally, Indonesia’s strong international trade relationships with countries such as China, India, Japan, South Korea, Australia, and New Zealand further enhance its position as a strategic hub for global business expansion.
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Foreign Investment Oversight and Regulation
Indonesia operates within a structured bureaucratic framework, particularly in matters related to foreign investment. The Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal or BKPM) oversees and regulates all foreign investment activities in the country.
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Legal Framework Governing Company Establishment
Company establishment in Indonesia is governed by Company Law No. 40 of 2007, which was subsequently amended through the Omnibus Law on Job Creation (Law No. 11 of 2020), enacted on 2 November 2020. These legal frameworks ensure that all business operations comply with national standards while promoting investment and economic growth.
How to Register a Company in Indonesia?
Establishing a company in Indonesia begins with selecting and obtaining approval for your proposed company name. Once approved, a Deed of Establishment must be executed with the assistance of a registered public notary. Here’s the step-by-step process to register a company in Indonesia:
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Step 1: Determine the Right Business Structure
The first decision any prospective business owner must make is choosing between a local PT, which requires 100% Indonesia ownership, and a PT PMA, which is designed specifically for foreign-owned companies. This choice shapes every subsequent step in the registration process and determines the scope of your operational and ownership rights in Indonesia.
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Step 2: Reserve Your Company Name
Once the structure is confirmed, submit up to three proposed company names to the Ministry of Law and Human Rights (MOLHR) for approval. Providing multiple options reduces delays caused by name conflicts and keeps the registration timeline moving without unnecessary interruption.
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Step 3: Draft the Deed of Establishment
A licensed local notary is responsible for preparing the Deed of Establishment along with the Articles of Association, both of which must be written in the language of Indonesia. This legal document forms the constitutional foundation of your company and must meet all requirements set under Indonesian Company Law.
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Step 4: Obtain the Business Identification Number (NIB)
Through the Online Single Submission (OSS) system, businesses apply for the NIB, or Nomor Induk Berusaha. This single number functions simultaneously as a business identity number, an import license, and a customs registration, consolidating what were previously separate administrative processes into one streamlined credential.
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Step 5: Complete Tax Registration
Every registered company in Indonesia is required to obtain a tax identification number, known as the NPWP, from the local tax office. This number is mandatory for filing tax returns, entering into contracts, and conducting any formal financial transactions with government agencies or private institutions.
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Step 6: Secure Additional Business Licenses
Depending on the risk classification of your business, categorised as low, medium, or high, additional permits may be required before operations can begin. These include building permits known as PBG, as well as environmental approvals for businesses whose activities carry a measurable impact on public health or the surrounding environment.
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Step 7: Register Employees for Social Security Compliance
All companies with employees are legally required to register with BPJS Kesehatan, the national health insurance programme, and BPJS Ketenagakerjaan, the employment social security programme. Compliance with both programmes is not optional and reflects Indonesia’s broader commitment to worker protection and welfare under national labour law.
Key Requirements for Company Registration in Indonesia
Registering a company in Indonesia involves understanding a structured set of legal, financial, and administrative requirements that every prospective business owner must understand before committing to the process. Meeting each of the following conditions accurately and in the correct sequence is essential to securing a valid registration.
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Minimum Capital Requirements
Foreign-owned companies, or PT PMAs, are required to meet a minimum investment threshold of IDR 10 billion, which is approximately USD 650,000, excluding land and building costs. This requirement is set by the Investment Coordinating Board of Indonesia and applies to each business field the company intends to operate in, making it one of the most significant financial commitments in the registration process.
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Shareholder Composition
A PT PMA must have a minimum of two shareholders, who may be individuals or legal entities, and can be either foreign or nationals of Indonesia, depending on the applicable foreign ownership restrictions. Local PT companies, by contrast, require at least two shareholders of Indonesia, as full foreign ownership is not permitted under this structure.
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Board of Directors and Commissioners
Every registered company in Indonesia must appoint at least one Director and one Commissioner. For PT PMAs, at least one Director must be a local resident in Indonesia. The Director holds executive authority over daily operations, while the Commissioner serves in a supervisory capacity, as defined under Company Law No. 40 of 2007 of Indonesia.
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Registered Local Business Address
A verifiable and legally registered business address within Indonesia is mandatory for company incorporation. Virtual offices are accepted in certain low-risk business classifications, but companies operating in medium or high-risk sectors are generally required to maintain a physical office space that can be inspected and verified by the relevant authorities.
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Business Classification Under KBLI
All companies must declare their intended business activities using the Standard Industrial Classification codes of Indonesia, known as KBLI codes. These codes determine which sector your company operates in, what licenses apply, and whether your business falls under any foreign ownership restrictions listed in the Negative Investment List, now restructured under the Positive Investment List introduced through the Omnibus Law.
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Foreign Ownership Restrictions
Certain business sectors in Indonesia are either fully closed to foreign investment or subject to partial ownership caps. The Positive Investment List, introduced under Government Regulation No. 10 of 2021, outlines which industries are open to foreign ownership and under what conditions. Businesses operating in restricted sectors must enter into partnership arrangements with entities of Indonesia to remain compliant.
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Domicile Letter and Office Verification
Before registration can be completed, companies are required to submit a domicile letter confirming the legitimacy of their business address. This letter is typically issued by the local district office or building management and must align with the address submitted during the OSS registration process. Discrepancies between submitted and verified addresses can delay or invalidate the registration.
Documents Required for Company Registration in Indonesia:
Registering a company in Indonesia is a document-intensive process, and every item on the required list carries legal weight. Each document serves a specific function within Indonesia’s regulatory framework, and a single omission or inaccuracy at this stage can bring the entire registration process to a halt. For businesses and professionals looking to establish operations in Indonesia, understanding what is required and preparing it correctly from the outset is the most effective way to avoid delays and move forward without interruption.
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Company Name Approval
Before any formal registration can proceed, applicants must submit a list of three proposed company names to the relevant authority for review and approval. Each name must be unique, free from conflict with existing registered entities, and compliant with Indonesia’s naming conventions as outlined under the applicable company regulations.
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Deed of Establishment
The Deed of Establishment, known locally as the Akta Pendirian, is a notarised legal document prepared in the Indonesian language by a licensed public notary. It sets out the Articles of Association, defines the company’s business objectives, and formalises the ownership and management structure that will govern the company’s operations under the law of Indonesia.
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Approval from the Ministry of Law and Human Rights
A formal decree from the Ministry of Law and Human Rights, commonly referred to as MOLHR, is required to confirm the company’s status as a recognised legal entity in Indonesia. This approval is typically facilitated by a notary or a professional incorporation service and represents the point at which the company is officially acknowledged by the state.
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Taxpayer Identification Number
Every registered company must obtain a Taxpayer Identification Number, known as the NPWP, which is issued by the local tax office. This number is a prerequisite for opening a corporate bank account and is required for all tax filings, financial transactions, and formal dealings with government institutions throughout the company’s operational life.
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Business Identification Number
The Business Identification Number, or NIB, is obtained through the Online Single Submission system, commonly referred to as OSS. It functions simultaneously as the official business registration number, an import license, and proof of enrollment in the national social security programmes, consolidating several administrative credentials into a single identifier.
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Proof of Registered Office Address
Companies are required to provide documentary proof of their registered business address in Indonesia, typically in the form of a lease agreement accompanied by a Certificate of Domicile, known as the SKDP. This documentation must correspond precisely with the address submitted during the OSS registration process to avoid administrative complications.
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Identity Documents of Shareholders and Directors
All directors and shareholders must submit valid identity documents as part of the registration process. Foreign nationals are required to provide copies of a valid passport, while nationals of Indonesia must submit their national identity card, known as the KTP, along with their personal NPWP. These documents are used to verify the identity and legal standing of all individuals associated with the company.
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Statement of Investment Realisation for PT PMA
Foreign-owned companies registered as a PT PMA are additionally required to submit a Statement of Investment Realisation, which provides a detailed account of the company’s investment plan and capital commitment. This document is reviewed by the Investment Coordinating Board of Indonesia and must align with the minimum capital requirements applicable to the declared business activities.
Requirements for Foreign-Owned Businesses:
If foreign investors are entering the market of Indonesia, determining the best legal entity suitable for their business is the essential first step. This decision must be made before incorporating a business in Indonesia. Identifying the industry in which the business will be involved is equally important and should be addressed at this stage.
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Official Business Naming Requirements
An official business name in Indonesia must fulfil certain criteria such as it must be written in roman letters; it is not the same or substantially the same with a company name which is lawfully used by another company; it is not contrary to public order and/or morality, it is not the same or similar to the name of the state bodies, government bodies, or international bodies, unless it obtained permission from such bodies; it does not consist of numbers or series of numbers, letters or series of letters that do not form a word; it contains at least three words, etc. A PMA is allowed to have an English word for its company name.
Official company names are only used for legal purposes. Businesses may choose to register another name that is more distinct from their product or brand if needed.
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Director and Commissioner Appointments for PMA Companies
To establish a PMA company, it is possible that the director and commissioner members are all foreigners. However, for the practicality of business operations, it is recommended that the company also appoint a local director.
In the absence of a regional director and if the foreign directors do not have a work permit and Tax ID, the business operation in Indonesia, including the signing of documents such as for bank account opening, Electronic Tax filing system (“EFIn”) registration, etc, will be limited.
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Tax ID and EFIn Registration for Foreign Directors
The registration of EFIn will require that the foreign director haves a TAX ID and Personal EFIn, which can only be obtained if the foreign director has a Work Permit. With a work permit, the foreign director will need to obtain a personal Tax ID (Tax resident). With the Tax ID, the foreign director can enjoy the local tax rate for their income tax in Indonesia. A foreigner who does not have a Tax ID will have a 20% tax cut on their income tax.
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KITAS Requirement for Foreign Directors and Commissioners
If the foreign director or commissioner will not be stationed in Indonesia to work, it is recommended that one of them apply for a KITAS after all the processes have been completed if they would like to visit Indonesia frequently to supervise and monitor their business. Otherwise, they may face entry issues at the customs of Indonesia when setting up a company.
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Identification Documents Required for Foreign Directors
The identification documents required for foreign directors include:
- Passport
- Tourist Visa only if the director will visit Indonesia rarely
- Business Visa if the director already hasve potential clients and will have several meetings in Indonesia
- KITAS (Temporary Permit) if director already has established a company in Indonesia and wishes to have regular meetings in Indonesia
- IMTA (Working Permit) if you situated and works daily in the office/company in Indonesia
What are the Types of Companies in Indonesia?
| Company Type | Suitable For | Advantages | Limitations |
| Local Company (PT) | Suitable for nationals of Indonesia or foreign investors partnering with local shareholders to operate a business under a domestic structure. | Offers simpler regulatory requirements compared to foreign-owned entities, with licensing processed through the Online Single Submission (OSS) system for efficient setup and compliance. | Requires 100% local ownership, meaning foreign investors cannot directly hold shares and must rely on local partners. |
| Foreign-Owned Company (PT PMA) | Ideal for foreign investors seeking to establish a company in Indonesia with partial or full ownership. | Enables full business operations, including licensing, import-export, tender participation, product registration, and hiring foreign employees under KITAS. | Subject to Indonesia’s Negative Investment List, with sector-based ownership limits, and requires higher capital and compliance obligations. |
| Representative Office | Best suited for foreign companies exploring the market of Indonesia or conducting research before full incorporation. | Provides a quick and low-cost setup with no minimum capital requirement and no need for shareholders or directors. | Cannot generate revenue or engage in commercial activities, limiting its role to liaison and market research functions. |
Alternatively, there are other options besides the three primary entities above. These options include:
- Purchasing a ready-made shelf company. This will allow you to skip the company registration process.
- Nominee Company – The nominee company will act as the registered owner on behalf of the real owner. If you choose this option, it is essential to source a partner who will have your best interests at heart.
Generally, the cost of setting up an Indonesian company starts from US$1,500. This is for a local company (PT company) that is based in Jakarta. The cost will differ based on the type of business entity, the location you choose and the service provider you engage.
What is the Registration Timeline and Procedure for companies in Indonesia?
In Indonesia, there are three entity options for investors to register their Indonesian company:
- Representative Office
- Local Company (PT)
- Limited Liability Company (PT PMA). This entity is also referred to as a Foreign Direct Investment Company.
Your company can be registered within a month or 1.5 months. Once fully registered, you can immediately commence business operations in Indonesia. You can open a bank account under the company’s name by submitting your Deed of Establishment and all your completed business licences to the preferred bank.
Most businesses in Indonesia can be established through the OSS system, which makes the process quicker and easier. To establish a PMA company in Indonesia, these are the requirements involved:
| Step 1 – Approval of Company Name and Acquiring Deed of Establishment | Choosing the right classification for your business is an important first step. This will ensure that you don’t encounter problems later.
Company name approval takes one business day. The place of domicile, or your office registration address, is required.
You will need to execute a Deed of Establishment. This can be done in two to three days.
The Deed of Establishment must be certified by the Ministry of Law and Human Rights. This can be done in 3 days after the submission of the deed of establishment to the MOLHR.
3E Accounting will assist with checking your intended business activities and recommend the best course of action. |
| Step 2 – Processing the Domicile in the Local District Office (only applies for areas outside Jakarta) | Requires Deed of Establishment, MOLHR Approval, rental office agreement, and ID of director. This takes 2-3 days.
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| Step 3 – Registering for Taxes | Acquire a Tax Identification Number (NPWP). This can be done at the local tax office.
This process can be done in 2 days. To receive the original card depends on the schedule from the Tax Department.
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| Step 4 – Registering for Business Identification Number | To operate in Indonesia you need an Identification Number or Nomor Induk Berusaha (NIB)
You will need to register your company with the OSS. Once done, you will receive your NIB. This can be done in two days.
NIB will serve as your Import Licence, Customs Identification Number (NIK), and Business Registry Number.
NIB will automatically register your business under the Health and Social Security System (BPJS Kesehatan dan BPJS Ketenagakerjaan) and LKPM (Investment Report), which you can process later. |
| Step 5 – Acquiring Operational and Commercial Licence | This is usually issued on the same day as your NIB.
Applicable if your business has no further requirements. Certain business activities may need additional fulfilment, in which case licences can take months to be approved.
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This timeline is based on Jakarta and serves as an estimate. Registration in other regions may take longer, depending on the nature of the business and regulatory requirements.
What are the Post-Registration Requirements in Indonesia?
The table below discusses the company registration requirements in Indonesia:
| Type of Company | Position | Local /Foreigner | Requirement Document | Document to Sign | Presence | Absence |
| Local | Director | Indonesia Citizen | KTP & NPWP (ID & Tax Card) | Statement Letter Opening a Bank Account | No need | |
| Director | Foreigner (possible, but this is not preferable since you might find obstacles when your company apply for a business licence, also depends on your authorised capital and line of business from your company) | Passport | Statement Letter | No need | ||
| Commissioner | Indonesia Citizen | KTP & NPWP (ID & Tax Card) | Statement Letter | No need | ||
| Shareholders | Indonesia Citizen | KTP & NPWP (ID & Tax Card) | Notary Deed & Statement Letter | Physical in front of Notary for signing the Notary Deed | Provide power of attorney, the attorney needs to provide ID | |
| Shareholders | Local Company | · Deed of Establishment & MOLHR Approval · Each Deed of Amendment & MOLHR Approval · Business Licences (domicile, NIB, NPWP) | Notary Deed & Statement Letter | Physical in front of Notary (One Director of the Local Company) for signing the Notary Deed | Provide power of attorney, the attorney needs to provide ID | |
| PMA (Foreign Company) | Director | Foreigner | Copy of Passport | Statement Letter | No need | |
| Commissioner | Foreigner | Copy of Passport | Statement Letter | No need | ||
| Director | Indonesia Citizen | KTP & NPWP (ID & Tax Card) | Statement Letter & Opening a Bank account | No need | ||
| Commissioner | Indonesia Citizen | KTP & NPWP (ID & Tax Card) | Statement Letter | No need | ||
| Shareholder | Privateindividual (Indonesian citizen) | KTP & NPWP (ID & Tax Card) | Notary Deed & Statement Letter | Physical in front of Notary for signing the Notary Deed | Provide power of attorney, the attorney needs to provide ID | |
| Private Individual (Foreigner) | Copy of Passport | Notary Deed & Statement Letter | Physical in front of Notary for signing the Notary Deed | Provide a power of attorney that is notarised by Public Notary overseas, the attorney needs to provide ID | ||
| Local Company | · Deed of Establishment & MOLHR Approval · Each Deed of Amendment & MOLHR Approval · Business Licences (domicile, NIB, NPWP) | Notary Deed & Statement Letter | Physical in front of Notary (One Director of the Local Company) for signing the Notary Deed | Provide power of attorney, the attorney needs to provide ID | ||
| Foreign Company | · Eg.. Singapore ACRA BizFile · Memorandum And AoA | Notary Deed & Statement Letter | Physical in front of Notary (One Director of the Foreign Company) for signing the Notary Deed | Provide a power of attorney that is notarised by a public notary overseas, the attorney needs to provide ID |
Indonesia’s regulatory reforms have made company registration more accessible than ever, but the process still demands careful preparation and strict legal compliance. For businesses looking to establish operations without the burden of navigating Indonesia’s legal framework alone, 3E Accounting provides end-to-end incorporation support, ensuring every step is handled accurately and efficiently from the outset.
