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Understanding the Role of the Deed of Establishment in Indonesia Company Formation

Forming a company in Indonesia is similar to creating a company in other countries. The differences will be the ministerial body or organisation that will approve and accept the company formation. Foreign investors who want to form a company in Indonesia can establish a PT PMA subject to the Negative Investment List. If all is good, let’s get to the process of setting up. One of the steps is to prepare a Deed of Establishment. Have no idea what it is? Time to find out what a Deed of Establishment is in Indonesia Companies.

The deed of establishment in Indonesia companies is a necessity by the Company Law in this country.

 

The Deed

The deed of establishment in Indonesia companies is a necessity under the Company Law in this country. If you are an established business person, you would have an idea of on what the deed should consist of. Some may assume it is similar to a Memorandum of Association or Articles of Association. While an Article of Association is part of company incorporation in Indonesia, a deed of establishment has additional information. The deed of establishment contains the Articles of Association.

 

Getting the Deed

Once a business person has cleared the preliminary steps to set up a company in Indonesia, they can get down to the legal part. The legalities of company incorporation begin with engaging a notary public. You can save time and oversights by hiring a local expert in company incorporation, as all documents must be in Bahasa Indonesia. One can obtain the standard deed of establishment for Indonesia companies from a notary. The shareholders must be present before the notary to complete the necessary information. If the shareholders are unable to be present, they must provide a representative through attorney power.

 

Contents of the Deed

Deed of Establishment in Indonesia CompaniesA deed of establishment in Indonesia contains the Articles of Association. In short, the Articles of Association include the following:

  1. Company name and domicile, which means the permanent location of the company.
  2. Company purpose, objective and business expertise.
  3. Period of incorporation.
  4. The authorised capital, subscribed capital, and paid-up capital.
  5. Shares.
  6. Details to hold the General Meeting of Shareholders.
  7. Appointment, replacement, or dismissal of members of the board.
  8. Profits and dividends.

The deed, however, requires several more detailed information such as the following:

  • Details of the Founders: if the shareholder is an individual, do include the name, date of birth, place of birth, current residence and citizenship. If the shareholder is an organisation, the deed requires the domicile and full address of the legal entity, as well as the date and registration number.
  • Details of the Board of Directors and Board of Commissioners: The details of each board member, such as name, date of birth, place of birth, current residence and citizenship.
  • Details of the Shareholders (other than the founders): The name of every shareholder, the number of shares issued, and the paid-up nominal value.

 

Approval of the Deed

After completing the deed of establishment in Indonesia, it must be notarised as a legal document. After that, business owners must apply to the Ministry of Law and Human Rights to get approval.

Deed of Establishment in Indonesia Companies

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Frequently Asked Questions

Yes, under Indonesia Company Law, this deed is a legal requirement for all PT and PT PMA formations.

The Deed of Establishment includes the Articles of Association, but also contains broader founding details such as founder identities, board members, and capital structure.

No, if you’re unable to attend in person, you can appoint a local representative through a power of attorney.

Yes, particularly in a PT PMA setup. However, certain sectors may be restricted by the Negative Investment List.

Typically, the drafting and notarisation take 3–5 working days, and the Ministry approval may take up to 10 working days thereafter.

Abigail Yu

Abigail Yu

Author

Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.