How to Start A Business in Indonesia 2026?
Indonesia is one of Southeast Asia’s fastest-growing economies, offering vast opportunities for entrepreneurs and investors in 2026. Starting a business in Indonesia is not as complicated as one might think. Its strategic location within ASEAN further enhances Indonesia’s appeal as a hub for regional business expansion.
Understanding the company incorporation process, capital thresholds, licensing obligations, and taxation rules is essential for long-term success. This guide provides practical, step-by-step insights to help local and foreign investors establish and grow a business efficiently while navigating Indonesia’s evolving business environment.
Why Choose Indonesia For Business?
Indonesia’s economy is growing every year, and that makes it a great place to start a business in Indonesia. Home to 18,307 islands in total and the fourth largest population in the world, Indonesia is an archipelago of abundance.
The country is rich in natural resources, including gold, coal, nickel, copper, tin, and natural gas, as well as abundant petroleum reserves. Its strategic location as an archipelago of over 18,000 islands also positions Indonesia as a gateway to the broader ASEAN market.
Key Factors to Consider Before Starting a Business in Indonesia
Before you begin your Indonesia incorporation process, there are some key factors you need to consider:
- Do Your Research – Will the nature of your business activity be well-suited in the country?
- Understanding Potential Customers – Who they are and what do they need?
- Following Proper Procedure – Getting started in a foreign country is always challenging. Enlisting the help of an experienced consultant like 3E Accounting can ease the process.
- Registering Your Business – You will need to get your Indonesia business registered with the relevant authorities.
- Local Religion, Customs and Beliefs – Indonesia is home to a melting pot of different religions, customs and beliefs. From Catholicism, Buddhism, Hinduism, and Islam, understanding and respect for the local beliefs is crucial.
Recent Reforms and Investor-Friendly Policies in Indonesia
Indonesia has recently implemented some changes to improve its investment, making it easier and faster to start a business. Previously, company registration took around two months, but now most businesses can be operational within 1 to 1.5 months. Key changes include:
- No More SKDP Requirement: Since May 2019, the Company Domicile (SKDP) is no longer required in Jakarta.
- Shelf Companies: Investors can incorporate Indonesia shelf companies within a week for faster market entry.
- Investor KITAS: Foreign investors serving as directors, shareholders, or commissioners can apply for a 2-year Investor KITAS, which allows multiple entries and immediate work rights. To qualify, investors must invest a minimum of IDR 1 billion in shares, and the total company capital must exceed IDR 10 billion.
These reforms, combined with simplified licensing and regulatory processes, make Indonesia a highly attractive destination for foreign investors seeking efficient market entry and long-term growth.
What Documents are Required to Start a Business in Indonesia?
Starting a business in Indonesia requires proper documentation to ensure legal compliance and a smooth incorporation process.
1. Identification Documents
To verify ownership and management, the following are required:
- For Local Investors: National ID (KTP) for all shareholders and directors.
- For Foreign Investors: Valid passport and visa copies.
2. Company Formation Documents
These documents establish the company’s legal existence and structure:
- Deed of Establishment: document defining shareholders, directors, and company structure; approved by the Ministry of Law and Human Rights.
- Articles of Association (AoA): Outlines company objectives, internal regulations, and shareholding rules.
3. Business Licensing Documents
To operate legally, businesses must obtain licenses based on their sector:
- Business License (OSS): Issued via the Online Single Submission (OSS) system.
- Sector-Specific Permits: Depending on your industry, additional permits may include:
- Trade licenses
- Environmental approvals
- Health and safety certifications
- Trade licenses
4. Taxation and Financial Documents
Proper tax registration ensures compliance with Indonesian laws:
- Tax Identification Number (NPWP): Required for corporate tax reporting.
- Financial Statements: Some sectors may require preliminary financial planning documents for licensing.
5. Company Address Documentation
- Company Domicile Letter: Proof of the company’s registered office address.
- Regional Exceptions: In Jakarta, SKDP requirements have been waived since May 2019, simplifying registration.
6. Foreign Investment Documents (for PT PMA)
- Investment Approval: Government confirmation of foreign capital injection and company approval.
- Investor KITAS: 2-year work and residence permit for foreign shareholders or directors, allowing multiple entries in Indonesia.
Steps to Start a New Business in Indonesia
The first step to starting a business in Indonesia is to choose your preferred company structure. The options available include:
- Foreign Limited Liability Company (PT PMA)
- Local Limited Liability Companies (PT)
- Representative Offices
PT PMA’s are the preferred option for foreign investors in Indonesia. 100% foreign ownership is allowed with this structure and you get to employ foreign workers too. To set up a PT PMA, you will need to meet the following requirements:
- Have one director (at least) and one commissioner. Either one must be a local Indonesian. You will also need two shareholders (they can either be local or foreign individuals or corporations, or a combination of both).
- Rp 10 billion in capital investment. Paid-up capital must be at least 25% of the total required capital.
- A local office address to obtain your domicile letter. Residential addresses are not allowed.
Indonesia Company Registration Process
Registration of the Indonesian company must be done online via the local OSS system. From there, you will obtain your NIB and any other licenses you may need. You will need to go through the following steps:
- Obtain approval for the name of your company
- Acquire your Deed of Incorporation (including Articles of Association). A notary needs to be present.
- Obtain approval of your legal entity. Approval will be granted by the Ministry of Law and Human Rights.
- Register for your Tax ID (NPWP). This is required to secure your business licenses, meet your tax obligations and to conduct banking activities.
- Obtain a domicile letter which identifies your business location.
- Obtain your unique company profile number (NIB), business license and any local permits required.
- Apply for any other necessary licenses you may need.
- Obtain your work permits
- Open your bank account
How to Set Up Office Location in Indonesia?
Once you’ve decided to establish your business in Indonesia, securing an office is a crucial step. A physical or registered office is required to obtain the Company Domicile Letter (SKDP), which is necessary for legal and licensing purposes.
Besides traditional office spaces, businesses now have the option of virtual offices, a cost-effective solution for startups and foreign investors. A virtual office provides a registered business address for official documentation, including the domicile letter, without the expense of renting physical office space.
3E Accounting has a range of virtual office solutions available. Your company branding, such as your logo, can be displayed at the entrance, while the 3E Accounting team handles mail, phone calls, and administrative support on your behalf. Your company logo will still be displayed on the door entrance..
