Company Incorporation in Indonesia
Ready to start a business in Indonesia? Let’s make it seamless.
Launching a company in Indonesia doesn’t have to be overwhelming. With the right guidance, the process can be efficient, straightforward, and surprisingly rewarding. Whether you're a local founder or a global investor, Indonesia offers serious advantages: a dynamic economy, strategic access to the ASEAN market, and a young, skilled workforce ready to support growth.
This guide covers everything you need, from choosing the right entity type and navigating the registration process, to understanding tax rules and steering clear of common missteps (yes, that includes avoiding shady nominee setups). We’ve stripped away the fluff, skipped the legalese, and focused on practical steps you can take right now. If you’re ready to move from idea to incorporation in Indonesia, with clarity and confidence, you’re in the right place.
Expanding your business into Southeast Asia? Indonesia offers a compelling opportunity.
With a large consumer market, a growing middle class, and a pro-investment government, the country stands as a strategic hub for global operations.
This guide provides a clear overview of how to register a company in Indonesia, the legal landscape, setup options, and the advantages for international investors looking to expand in the region.
At C2Z Advisory, we offer end-to-end support, from documentation to execution, to ensure a seamless incorporation process aligned with your business goals.
Why set up a company in Indonesia?
Indonesia is the largest economy in Southeast Asia, and one of the most promising emerging markets globally.
With consistent GDP growth and a government eager to attract foreign investment, it's an ideal destination for setting up a new company.
Its position as a transcontinental country also enhances trade access across Asia-markets and beyond, making it a preferred entry point for businesses with regional and global ambitions.
Indonesia’s growing economy and strategic location
Indonesia’s GDP has been steadily rising, backed by strong domestic demand and a dynamic entrepreneurial culture. The country is part of the G20 group of major economies, showing its influence and stability in global affairs.
Its geographic location, connecting the Indian and Pacific Oceans, provides a natural advantage for logistics and exports, especially for companies operating across multiple markets.
Recent credit ratings for Indonesia
Indonesia maintains investment-grade credit ratings from major international agencies.
For instance, Fitch Ratings recently affirmed Indonesia at BBB with a stable outlook, and Moody’s maintains a Baa2 rating, reflecting strong macroeconomic fundamentals.
These ratings indicate a low risk of default, boosting investor confidence and reducing borrowing costs for businesses operating in the country.
Why are credit ratings important for Indonesia?
Credit ratings reflect a country’s financial health and political stability, two key factors for any international business expansion. For foreign companies, these ratings provide an assurance that Indonesia is a secure environment for investment and long-term planning.
They also impact the cost of capital and can influence favorable terms from global financial institutions when setting up or funding a business in Indonesia.
Overview of legal framework for company formation
Indonesia has a modern, business-friendly legal system designed to support both local and foreign investors.
The company registration process is governed by the Indonesian Company Law, and involves multiple regulatory bodies including the Ministry of Law and Human Rights.
A clear understanding of the required documentation and procedural steps is essential. Our experts at C2Z Advisory ensure every legal requirement is met for a smooth and compliant incorporation process.
Local vs foreign-owned company setup
Foreign investors can choose between several entity types, but the most common is the PT PMA (foreign-owned limited liability company).
It allows up to 100% foreign ownership in many sectors, subject to the Positive Investment List issued by the government.
Local companies, or PT (Perseroan Terbatas), are fully owned by Indonesian nationals and typically face fewer regulatory restrictions. However, foreign ownership can also be facilitated through nominee structures or joint ventures.
Company formation in Indonesia
What is incorporation?
Incorporation is the legal process of forming a company that exists as a separate entity from its owners.
Once incorporated, a business gains legal recognition under the law and can enter contracts, own property, and operate independently.
In Indonesia, incorporation is required for both local and foreign businesses to operate legally and benefit from regulatory protections.
Legal identity and limited liability benefits
One of the key advantages of incorporation is the creation of a separate legal identity. This means the company, not the individuals, assumes legal responsibility for its actions.
Another major benefit is limited liability. Shareholders are only liable up to the amount of their investment, helping protect personal assets from business risks or debts.
Overview of incorporation laws in Indonesia
Company formation in Indonesia is governed by Law No. 40 of 2007 concerning Limited Liability Companies. This law applies to both domestic and foreign-owned entities.
The process includes approval from the Ministry of Law and Human Rights, registration with the Investment Coordinating Board (BKPM) for foreign entities, and tax registration. C2Z Advisory ensures seamless global execution at every step.
What is a company in Indonesia?
Under Indonesian law, a company, referred to as Perseroan Terbatas (PT), is a limited liability company established with capital divided into shares and operated by appointed directors and commissioners.
It is the most common legal structure for both local and foreign investors due to its flexibility and clear regulatory framework.
Definition under Indonesian law
According to the Company Law, a PT is a legal entity established through a formal notarial deed and recognized by the government upon registration.
It must have at least two shareholders, a director, and a commissioner. For foreign companies, additional permits and investment thresholds may apply depending on the industry.
Key characteristics of a legal entity (PT)
Separate legal personality
The company operates as an independent legal entity, capable of owning assets and assuming obligations.
Limited liability for shareholders
Investors are protected from personal financial risk beyond their capital contributions.
Management by directors and commissioners
Daily operations are managed by directors, while commissioners provide oversight and ensure compliance.
Ownership through shares
Equity in the company is divided into shares, which can be held by individuals or entities, both local and foreign.
What are the 6 company types in Indonesia?
Indonesia offers various business structures to accommodate different types of investors and business goals.
Choosing the right one ensures your company aligns with local laws and supports long-term growth.
Each of these company types serves a different purpose. Your choice depends on factors like ownership preferences, industry limitations, and operational flexibility.
This is the most common form of company in Indonesia. A PT is a locally owned company that requires at least two shareholders, one director, and one commissioner.
Best for: Indonesian nationals or companies targeting the domestic market without foreign ownership.
A PMA is a limited liability company with foreign investment. It is regulated by the Investment Coordinating Board (BKPM) and allows up to 100% foreign ownership in many sectors.
Best for: Foreign investors looking to establish a fully owned and operated business in Indonesia.
This structure allows a foreign company to establish a non-commercial presence in Indonesia. A KPPA cannot generate revenue but can conduct market research and liaise with partners.
Best for: Foreign companies testing the market or building local relationships without immediate commercial activities.
A joint venture is a partnership between a foreign investor and a local company, typically formed to meet regulatory requirements or leverage local expertise.
Best for: Businesses in sectors restricted to full foreign ownership or those seeking strong local partnerships.
This structure uses local nominees to hold shares on behalf of a foreign investor, often used to bypass ownership restrictions in certain industries.
Best for: Foreign investors entering sectors with strict ownership rules or seeking faster market entry. Note: This setup carries legal risks and requires trusted partners.
A subsidiary is a separate legal entity incorporated under Indonesian law, while a branch office is an extension of a foreign parent company and has limited legal autonomy.
Best for:
– Subsidiary: Companies seeking local legal status and operational independence.
– Branch office: Companies needing limited operations, typically in banking, insurance, or representative activities.
4 types of legal entities in Indonesia
Indonesia offers a range of legal structures for business incorporation, each with its own scope and suitability. Understanding the options helps you choose the right vehicle for your business strategy.
A PT is a limited liability company fully owned by Indonesian nationals. It is the most commonly used entity for domestic operations and cannot be owned by foreign shareholders.
A PT PMA is a limited liability company with foreign ownership, regulated by the BKPM. It offers full legal rights for foreigners to conduct commercial activities in Indonesia.
A KPPA allows foreign companies to set up a non-commercial presence in Indonesia. It cannot generate income, but it can conduct market research and act as a liaison.
This is a simple business entity for Indonesian individuals. It does not have a separate legal identity, and the owner is personally liable for all business obligations.
4 advantages of incorporating a company in Indonesia
Indonesia is a gateway to Southeast Asia, offering access to over 600 million consumers and a growing, young, and skilled workforce ready to support your expansion.
Incorporation provides legal protection for personal assets, limiting shareholder liability to the capital invested in the company.
The PT PMA structure is designed to safeguard foreign investment. It allows full ownership in many sectors and provides a regulated path to market entry.
Only legally incorporated entities can apply for operational licenses and participate in public procurement, giving you access to broader commercial opportunities.
3 disadvantages and challenges
Foreign-owned companies (PT PMA) must meet a minimum capital of IDR 10 billion (around USD 650,000), which can be a barrier for small or early-stage investors.
This amount must be declared in the company deed and partially realized within a set period to comply with BKPM regulations.
Using local nominees to bypass ownership restrictions can create legal and operational risks. Improper agreements may lead to disputes or loss of control.
Always consult legal experts to ensure nominee arrangements are transparent, enforceable, and in line with Indonesian law.
Indonesia’s business environment can involve multiple layers of approvals, especially for regulated sectors. Licensing and tax processes may vary by region.
In addition, frequent legal updates require businesses to stay agile and compliant, something our advisors at C2Z manage proactively.
Requirements for setting up a company in Indonesia
Company incorporation requirements in Indonesia
To legally incorporate a company in Indonesia, both local and foreign investors must fulfill several regulatory and administrative steps.
These ensure your business is compliant and eligible to operate.
Minimum capital requirements
For a local PT, there is no strict minimum unless otherwise specified by the industry.
For a PT PMA, a minimum of IDR 10 billion is required, with at least 25% paid-up upon incorporation.
Shareholder and director structure
A company must have at least two shareholders, one resident director, and one commissioner. For PT PMA, shareholders can be foreign individuals or entities.
Registered business address
A physical registered office in a commercial building is required during incorporation. This address will be used for legal and tax correspondence.
Company purpose and KBLI code (business classification)
You must define your business activity using the KBLI classification system. This determines your licensing requirements and industry-specific compliance.
Local office space and environmental impact assessment (if needed)
Depending on the sector, you may be required to have dedicated office space and complete an Environmental Impact Assessment (AMDAL) for high-impact activities.
6 step incorporation process in Indonesia
Establishing a company in Indonesia involves several legal and administrative steps.
While the process is structured, working with experienced advisors ensures a smooth and timely incorporation.
Here’s a breakdown of the key steps to register a company in Indonesia:
You must reserve and register a unique company name with the Ministry of Law and Human Rights. The name must follow local naming rules and be available in the corporate registry.
A public notary drafts and notarizes the Deed of Establishment, which includes your company’s articles of association, shareholders, and capital structure.
This deed is submitted electronically for approval by the Ministry.
You will need a Domicile Letter issued by the local government (Kelurahan) to confirm the registered office address of your company. A commercial lease is typically required.
Next, you must obtain a Taxpayer Identification Number (NPWP) from the local tax office. This is mandatory for conducting any commercial activity or opening a business bank account.
Through the Online Single Submission (OSS) system, your company will be issued a Business Identification Number (NIB). This acts as a central business license and registers the company with multiple authorities.
Depending on your business activity, you may need to apply for additional operational permits from relevant ministries or local authorities, especially in regulated sectors.
At C2Z Advisory, we ensure every step is handled From A to Z, helping you launch with confidence, compliance, and global standards.
Incorporating a foreign-owned company (PT PMA)
Setting up a foreign-owned company in Indonesia, commonly known as a PT PMA (Penanaman Modal Asing), is the most suitable option for international investors seeking full operational control.
This structure offers limited liability protection, access to business licenses, and the ability to generate revenue in Indonesia.
Foreign-owned LLCs in Indonesia (PT PMA structure)
A PT PMA is a limited liability company formed with one or more foreign shareholders. It is legally recognized and regulated by the Indonesian Investment Coordinating Board (BKPM).
This entity enjoys the same legal rights as a local company in most permitted sectors.
Who can establish a PT PMA?
Foreign individuals or legal entities can register a PT PMA, either independently or through a joint venture. A minimum of two shareholders is required, which can include foreign companies, local partners, or a mix of both.
Foreign ownership restrictions and Negative Investment List (DNI)
Indonesia allows up to 100% foreign ownership in many sectors. However, some industries remain restricted or capped under the Negative Investment List (DNI).
It’s essential to check current guidelines to confirm your business activity is open to foreign investment.
Minimum capital requirements (typically USD 700,000)
A PT PMA must declare a minimum investment of IDR 10 billion (approximately USD 700,000), with at least 25% as paid-up capital upon incorporation.
This requirement ensures the business has sufficient funds to operate and aligns with Indonesia’s foreign direct investment (FDI) policies.
Local and foreign director rules
The company must appoint at least one director and one commissioner. These roles can be held by foreigners, but at least one resident director is required for administrative purposes and legal compliance.
Opening a subsidiary in Indonesia
International companies may choose to open a PT PMA as a subsidiary, which operates as an independent legal entity under Indonesian law. This allows full commercial activity and eligibility for local contracts.
It differs from a branch office, which is not a separate entity and has more limited rights.
Appointing commissioners and directors
A PT PMA must have at least one commissioner (oversight role) and one director (executive role). These positions are responsible for governance, compliance, and day-to-day operations.
Appointments should reflect the company’s strategic and regulatory needs, especially for businesses in highly regulated sectors.
Document checklist for company incorporation in Indonesia
Before initiating the incorporation process, it’s essential to gather all required documents. Having these in place ensures a faster and more efficient registration process, especially for foreign investors.
Company name reservation certificate
Issued by the Ministry of Law and Human Rights, this document confirms that your proposed company name is available and complies with naming regulations.
Articles of association and notarized deed
This includes the company’s governing rules, shareholder structure, and objectives. It must be notarized by a licensed public notary in Indonesia.
Tax ID application (NPWP)
A Taxpayer Identification Number is mandatory for opening bank accounts, invoicing clients, and fulfilling tax obligations. It’s obtained from the local tax office.
Proof of business address or lease agreement
You must provide evidence of a registered commercial address, either through a lease agreement or property ownership document.
Shareholder and director IDs
Copies of passports or national IDs are required for all shareholders, directors, and commissioners. For foreign individuals, additional documentation may apply.
Company registration timeframe in Indonesia
A standard incorporation in Indonesia can be completed relatively quickly when all documentation is in order. Below is a general timeline for each stage.
Name reservation and notary: 3–5 days
This includes reserving your company name and finalizing the Deed of Establishment through a certified notary.
Ministry legalization and OSS registration: ~1 week
The Ministry of Law and Human Rights will approve and legalize the deed, after which your company will be registered on the OSS (Online Single Submission) system.
Licenses and permits: 3–10 days
Depending on your business activity, additional sector-specific licenses may be required and can usually be obtained within this timeframe.
Total estimated time: 2–3 weeks
With professional guidance and all documents prepared in advance, you can expect full company incorporation in under a month.
Cost of company registration in Indonesia
Setting up a company in Indonesia involves several cost components, some of which are fixed, while others depend on your business size, industry, and chosen location. Below is an overview of the most relevant expenses.
Notarial and government fees
Notary services typically range from USD 300–1,000, depending on the firm and region.
Company deed preparation and legalization by the Ministry of Law and Human Rights usually costs between USD 100–300.
Licensing and sector-specific fees
If your business operates in a regulated sector, you may need additional licenses. These can cost anywhere from USD 100–1,000, depending on the complexity and type of activity.
Legal/consulting costs (if applicable)
Engaging professional advisors ensures compliance and saves time.
Consulting fees for company incorporation services typically range from USD 1,000–3,000, based on the level of support provided.
Business location and admin setup
Office rental, utilities, and basic setup costs vary greatly depending on the city and the size of your operations. Jakarta, for example, tends to have higher rental rates than secondary cities.
Taxation of companies in Indonesia
Understanding the tax landscape is essential for successful business operations in Indonesia.
The country offers a structured yet evolving fiscal environment that aligns with international practices while incorporating local regulations.
Below is a breakdown of key taxation areas companies must navigate.
Corporate income tax rate (22%)
Indonesia applies a flat corporate income tax rate of 22%, applicable to both local and foreign-owned companies operating within the country.
This tax is calculated on net profits, and businesses must maintain transparent accounting systems to comply with reporting requirements.
Companies with annual revenues below certain thresholds may qualify for reduced rates or tax incentives, especially if operating in priority sectors identified by the government.
Withholding taxes (dividends, royalties, services)
Indonesia imposes withholding taxes on various types of outbound payments to non-residents.
These taxes apply regardless of whether the payee is an individual or corporate entity.
- Dividends: Typically taxed at 10–20%, depending on the beneficiary’s country of residence. Tax treaty agreements can reduce the applicable rate.
- Royalties: Subject to a 15% withholding tax, often affecting technology and intellectual property transfers.
- Services: Rates vary from 2% to 6%, depending on the nature of the services provided and whether they are classified as technical, management, or professional.
Proper structuring of contracts and reviewing tax treaties can significantly reduce the withholding tax burden for international transactions.
VAT and local taxes
The Value Added Tax (VAT) rate in Indonesia is 11%, applicable to most goods and services. Companies must register for VAT if their annual turnover exceeds the threshold set by the Directorate General of Taxes.
Beyond VAT, businesses must account for regional and municipal taxes, including:
- Land and building tax (PBB)
- Signage or advertising tax
- Motor vehicle and utility-related charges, where applicable
These local taxes vary by jurisdiction and may impact overall operating costs depending on business location.
Tax ID (NPWP) obligations
All companies must obtain a Taxpayer Identification Number (NPWP) immediately after incorporation. This is required for issuing tax invoices, making official payments, and filing tax returns.
Without an NPWP, companies may face penalties or disqualification from engaging in government-related transactions or securing licenses.
Post-incorporation obligations
Compliance does not end after registration. Indonesian companies are required to fulfill ongoing administrative and tax duties to remain in good standing with regulatory bodies.
Monthly and annual tax filings
Businesses must submit monthly tax reports for income tax, VAT, and employee tax obligations.
Annual corporate income tax filings are due at the end of the fiscal year and must be accompanied by audited financial statements for larger companies.
Failure to file on time may result in financial penalties and reputational risk with tax authorities.
BPJS (social security) registration
Employers must enroll all employees in BPJS Kesehatan (Health) and BPJS Ketenagakerjaan (Employment) social security schemes. Contributions are shared between employer and employee and must be reported monthly.
BPJS compliance is not optional, it is a legal requirement for all operating companies with staff.
Company record maintenance and OSS compliance
Companies are obligated to maintain updated corporate records, including shareholder changes, capital adjustments, and business scope updates through the OSS (Online Single Submission) platform.
Non-compliance with OSS reporting can affect your company’s legal standing and eligibility for future permits or expansions.
Annual general meetings and financial reporting
Every company must hold an Annual General Meeting (AGM) to approve the financial statements and company performance.
In addition, companies with specific size or structure must submit audited financial reports to the Ministry of Law and Human Rights.
Transparent governance and regular reporting are essential for long-term credibility with regulators, partners, and clients.
4 common mistakes to avoid
Incorporating a company in Indonesia offers many benefits, but overlooking key legal or regulatory details can lead to serious delays, or even penalties.
Here are four common pitfalls that smart investors should avoid from day one.
Relying on informal nominee arrangements to bypass foreign ownership restrictions is risky and often illegal.
These setups can be challenged in court and may result in loss of business control or regulatory sanctions.
Always work with licensed advisors to ensure your structure is compliant with Indonesian company law and the Negative Investment List (DNI).
Your company’s activities must be clearly defined using KBLI codes (Indonesian business classification system).
Choosing incorrect or conflicting codes can lead to license rejections or limitations on your permitted operations.
Make sure your KBLI codes align with your actual business activities, and that they are consistent across all registration platforms.
Once registered, companies must regularly update their data on the OSS (Online Single Submission) system.
Failing to do so can cause your business license (NIB) to become inactive or invalid, disrupting operations and future expansions.
Updates are required for changes in directors, capital, address, or business activities.
PT PMA companies are required to meet a minimum investment threshold of IDR 10 billion.
Attempting to operate with insufficient capital can result in non-compliance with BKPM regulations and denial of certain permits.
Foreign investors must ensure they meet both the declared and realized capital requirements to operate legally.
Understanding investment incentives and free trade zones
Indonesia continues to attract global investors by offering strategic benefits through special economic programs and trade-friendly policies.
Understanding these incentives can significantly impact your setup, operating costs, and long-term profitability.
Overview of KEK (Special Economic Zones) and benefits
Indonesia has established several KEKs (Kawasan Ekonomi Khusus), Special Economic Zones designed to support export-oriented and high-tech industries.
Companies operating within KEKs benefit from corporate tax reductions, VAT exemptions, streamlined licensing, and simplified import/export procedures.
KEKs are strategically located to enhance logistics, reduce bureaucracy, and promote regional development.
PEZA-type zones in Indonesia and how to qualify
Inspired by the Philippine model, Indonesia's KEKs function similarly to PEZA zones, offering businesses in manufacturing, logistics, tourism, and tech tailored incentives.
To qualify, a business must be registered within the KEK jurisdiction and comply with zoning regulations tied to its industry sector.
Approval often includes tax incentives, infrastructure support, and expedited immigration services for foreign staff.
Tax holidays and import duty exemptions
Indonesia offers tax holidays ranging from 5 to 20 years, depending on investment size and industry priority.
These incentives are granted to companies in sectors like infrastructure, energy, digital tech, and manufacturing.
In addition, eligible businesses can obtain exemptions from import duties and VAT on capital goods, raw materials, and production equipment.
Foreign investment considerations
While Indonesia welcomes foreign investment, it also regulates ownership in certain strategic sectors.
It's essential to review the Negative Investment List (DNI) before entering the market.
Foreign investors should also assess whether their structure qualifies for full ownership (PT PMA) or if a joint venture is required under the law.
Restrictions by sector in Negative Investment List (DNI)
The DNI outlines sectors closed or restricted to foreign ownership, including those requiring partial local equity or subject to licensing caps.
Examples include industries like agriculture, media, and transportation. The list is updated regularly, so legal consultation is vital before entering restricted sectors.
Tax holidays and incentives
Eligible companies can apply for tax holidays and allowances under the BKPM scheme.
These are typically offered to firms investing in priority sectors with high capital input, innovation, or job creation potential.
Incentives may include reduced corporate income tax, investment allowances, and accelerated depreciation.
Visa & work permit requirements (KITAS, IMTA)
Foreign professionals working in Indonesia must obtain a KITAS (limited stay permit) and IMTA (work permit).
These are processed through the Ministry of Manpower and are required before legally commencing employment or business management roles.
Sponsorship from the registered company and alignment with its KBLI classification are necessary to secure approvals.
How U.S. tariff exemptions on electronics could reshape Southeast Asia’s manufacturing landscape
Recent U.S. tariff exemptions on electronics present a strategic opportunity for Indonesia to position itself as a competitive manufacturing hub in Southeast Asia.
With rising costs in China and geopolitical shifts, global brands are now seeking diversified supply chains, and Indonesia, with its infrastructure and incentives, is becoming a top destination for relocation and investment.
Choosing the right location for your business in Indonesia
Selecting the optimal location is a strategic decision that impacts access to talent, infrastructure, incentives, and market reach. Indonesia offers diverse options tailored to different industries and business models.
Jakarta: The commercial and financial capital
Jakarta is Indonesia’s economic powerhouse, home to major banks, multinationals, government offices, and business services.
It offers superior infrastructure, regulatory access, and a deep talent pool, making it ideal for headquarters, finance, and B2B services.
However, high competition and operational costs should be considered for new entrants.
Bali: The creative and tourism hub
Known globally for its tourism appeal, Bali is also attracting creative industries, startups, and digital nomads.
The island supports businesses in hospitality, design, wellness, and media, offering a dynamic ecosystem with a relaxed lifestyle.
Note: Foreign-owned businesses in Bali must still comply with zoning and tourism-related regulations.
Surabaya: Eastern Indonesia’s business center
As the second-largest city, Surabaya is the industrial and logistics hub of East Java.
It’s known for its strategic ports and strong manufacturing base, making it ideal for companies in distribution, retail, and light industry.
It also provides lower operational costs than Jakarta, while maintaining good connectivity.
Batam: Special Economic Zone near Singapore
Located just 20 km from Singapore, Batam offers a unique blend of proximity to international markets and cost advantages.
It is part of a Special Economic Zone (SEZ) and is ideal for electronics, logistics, and export-oriented businesses.
The presence of cross-border trade agreements enhances its appeal to regional manufacturers.
Special economic zones (KEKs): Incentive-powered growth hubs
Indonesia’s KEKs are purpose-built to support priority sectors such as tech, energy, logistics, and tourism.
Companies in KEKs enjoy tax breaks, simplified licensing, and import duty exemptions, along with infrastructure support.
Choosing a KEK location can significantly improve your operational efficiency and regulatory agility.
Choosing the right city or region depends on your industry, hiring needs, operational scale, and budget.
If you're targeting exports or incentives, consider KEKs. For high-end services or brand building, Jakarta and Bali lead the way.
Frequently asked questions
Yes, foreign citizens can start a business in Indonesia through a foreign-owned limited liability company, also known as PT PMA (Penanaman Modal Asing).
This structure allows up to 100% foreign ownership in many sectors. However, some industries are restricted and may require a joint venture with local partners, as outlined in the Negative Investment List (DNI).
It’s essential to work with legal advisors to ensure your planned activities are eligible under current regulations.
Yes. If you plan to live in Indonesia and manage the company on-site, you will need a KITAS (limited stay permit) and a work permit (IMTA).
These must be sponsored by your Indonesian company and approved by the Ministry of Manpower.
While setting up a company does not automatically grant a visa, C2Z Advisory can assist you in managing the immigration process alongside the incorporation.
The incorporation process generally includes:
- Company name approval
- Drafting and notarizing the Deed of Establishment
- Obtaining a Domicile Letter
- Registering for tax (NPWP)
- Getting a Business Identification Number (NIB) via the OSS system
- Securing any additional licenses depending on your business activity
The entire process takes between 2 to 3 weeks, assuming all documents are ready and no delays in approvals occur.
You’ll need:
- A company name reservation certificate
- The notarized Deed of Establishment and Articles of Association
- Identification documents for all shareholders and directors
- A lease agreement or proof of a registered office address
A business classification code (KBLI) appropriate for your activity
Additional documents may be required for specific sectors or if foreign shareholders are involved.
For foreign-owned companies (PT PMA), the minimum investment requirement is IDR 10 billion (approx. USD 700,000), with 25% to be paid-up upon incorporation.
Local PT companies do not have a fixed capital threshold but must comply with industry-specific rules.
Undercapitalizing can affect your ability to obtain licenses or operate legally.
Typically, the incorporation process takes between 2 to 3 weeks.
This timeframe includes name reservation, notarization, OSS registration, tax registration, and obtaining any sector-specific permits.
Delays may occur if documents are incomplete or if approvals from multiple government bodies are required.
Companies in Indonesia are subject to several taxes:
- Corporate Income Tax: 22% on net profits
- VAT: 11% on most goods and services
- Withholding Tax: 10–20% on dividends, 15% on royalties, and 2–6% on services
Regional Taxes: Including property, advertising, and vehicle taxes
Timely monthly and annual filings are mandatory, and companies must obtain a Tax ID (NPWP) immediately after incorporation.
Once your company is legally established and you’ve obtained the Deed of Establishment, NPWP, and NIB, you can open a corporate bank account.
Some banks may also require a residence permit (KITAS) for foreign directors or signatories.
Each bank has its own due diligence process, so it's advisable to compare requirements and fees in advance.
Indonesia offers a strategic gateway to Southeast Asia, with a population of over 270 million, rising consumer demand, and competitive labor costs.
The government provides investment incentives, tax holidays, and access to special economic zones, making it highly attractive for international expansion.
With the right structure and advisory support, Indonesia becomes a high-potential, long-term growth market for foreign investors.