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You don’t need to be a Wolf of Wall Street to open a company in Indonesia.

You can choose between several legal structures.
Each with its advantages, disadvantages, and costs.

Here’s an overview of the 3 main types:

1- PT or Perseroan Terbatas

This is a local limited liability company, requiring 100% Indonesian ownership.

Costs & Time : Approx. USD 1000, taking 2 to 4 weeks.

There are 3 categories based on the share capital:
– Small : 50 to 500 million IDR.
– Medium : 500 million to 10 billion IDR.
– Large : > 10 billion IDR.

Pros & Cons

A PT can engage in a wide range of business activities and is less likely to be scrutinized than a foreign-owned company.

However foreign investors must use Indonesian nominees, a practice that can be risky despite legal safeguards.

2- PMA or Penanaman Modal Asing

A foreign-owned limited liability company.

Costs & Time: Around USD 2000, approximately 2 weeks.

Conditions
– Minimum share capital of 10 billion IDR.
– Must employ local staff and adhere to strategic and financial reporting requirements.

Pros & Cons

Allows full foreign ownership and commercial activities but is subject to more rigorous government oversight and higher costs.

3- KPPA or Kantor Perwakilan Perusahaan Asing

A representative office of a foreign company.

Costs & Time: Around USD 2500, taking 1 to 2 months.

Conditions: No minimum share capital is required, but a KPPA can only engage in non-commercial activities like market research for example.

Pros & Cons

Quick and straightforward to establish, but cannot generate revenue or sign contracts.
It’s usually a temporary solution before setting up a PMA.

In any case, there are important Permits & Visa Considerations:

Work Permit (IZIN KERJA)
Required for a foreigner, with costs ranging from USD 500 to 1000 annually, plus a government tax of USD 1200 per year.

Residency Permits (KITAS/KITAP)
A KITAS is valid for 1 year, while a KITAP is valid for 5 years. Foreign workers must meet specific salary thresholds, which vary by position.

Choosing the right structure for your business in Indonesia depends on various factors such as ownership, capital, the nature of the business, etc.

The legal and regulatory environment in Indonesia is flexible but can be complex, making it essential to carefully evaluate your options.

For tailored advice and assistance with setting up your company in Indonesia, consider reaching out to us at CINTASIA.

We offer expert guidance and services to help you navigate Indonesian business laws and regulations.

For example share capital and paid-up capital can be interpreted differently leading to different risks and different cash requirements.

PS : The costs and time data mentioned above are for information only, they may vary without notice and also depend on the service provider. Contact us to get a firm quote.