Frequently Asked Questions In Incorporating A New Company In Indonesia

It’s typical to have several questions if you’re planning to start a new business in Indonesia. Perhaps you’re testing the waters, and getting answers to your questions is a good start. To help clear your mind about incorporating Indonesia company, check out the FAQs below.

What Are The Legal Business Entities In Indonesia?

There are three different legal entities in Indonesia, each of which has distinctive characteristics. These entities are the international limited liability company (PT PMA), local limited liability company (PT), and representative office (RO).

How Long Does It Take To Register A Business?

In setting up a new company in Indonesia, there are several measures and required paperwork to be collected and authorized. The expected registration completion process is approximately 2-3 months.

In line with that, the Coordinating Ministry for Economic Affairs arranged and supervised a modern online framework, the Online Single Submission (OSS) system, to speed up the process. The OSS would facilitate the online procurement of licenses necessary for business registration.

What Are The Capital Requirements?

For most limited liability companies, the minimum capital needed is IDR 10 billion (approximately US$ 675,000) and about IDR 2.5 billion or US$ 170,000 in investment.

The minimum and pay-up capital requirements can be higher for foreign investors who want to operate in a capital-intensive industry. By consulting with 3E Accounting Indonesia, you can learn more about the capital requirements of companies and its deposit process.

Can A Foreigner Own A Local Business?

Foreigners aren’t allowed to own a local company in Indonesia. Only an Indonesian citizen can own it. However, for some industries allowing local investments under the Negative Investment List, foreigners can choose a local company through the candidate company. The candidate company can also allow foreigners to join the booming Indonesian markets without a pricey 10 billion IDR minimum capital.

With 3E Accounting’s candidate company service involvement, foreigners can invest in Indonesia in almost all sectors without spending enormous resources. More importantly, you can have direct control over the business and a legal document to guarantee that the Indonesian you designate is only the company’s owner on your behalf.

Is There A Need To Open A Bank Account?

A bank account is required for any business entity in Indonesia.  To open a bank account, you must submit the necessary documents the Indonesian bank requires.

Still Have Questions?

Do you still have questions on how to start a business in Indonesia? Or do you need more details on specific topics? Contact us at 3E Accounting Indonesia, and our professional team will be glad to assist you.