1. Low Labor Wages
2. Trade Agreements
3. Investment Incentives
4. Rich Source of Raw Materials
5. Convenience in Starting and Doing Business
6. Royalties from Technology-Transfer
7. Foreign Investors’ Land Ownership

• State-Owned Company (BUMN): Public Company (PERUM), Liability Company (PERSERO)
• Private-Owned Company (BUMS): Firma (Fa), Commanditaire Vennootschap (CV),Limited Company (PT/ Perseroan Terbatas) (PT PMDN,PT PMA)
• Representative Office / KPPA

PT, PMA, and KPPA are all types of legal entities in Indonesia that can be used by foreign businesses. PT stands for Perseroan Terbatas, which is a limited liability company. PMA stands for Penanaman Modal Asing, which is a foreign investment company. KPPA stands for Kantor Perwakilan Perusahaan Asing, which is a foreign company representative office.

The main difference between PT and PMA is the ownership structure. PT can be wholly owned by Indonesians, while PMA must have at least 1% foreign ownership. KPPA does not have any ownership requirements.

The meaning of company incorporation is the formal process of establishing a separate legal entity for a new corporation, independent of its owners. In a wider context, incorporation refers to the process of registering a business with the state to establish it as a separate legal entity.

• Limited Liability Protection
• Enhanced Credibility and Professionalism
• Access to Capital and Financing Options
• Perpetual Existence
• Tax Benefits and Incentives

• PT PMDN company requirements:

  • 2 local shareholders
  • 1 directorIt is acceptable to use virtual offices as a registered business address.
  • 1 commissioner
  • Projected investment value:
  • Small-scale business: IDR 50 million
  • Medium-scale business: IDR 500 million
  • Large-scale business: more than IDR 10 billion

• PMA company requirements:

  • 2 shareholders
  • 1 director
  • 1 commissioner
  • Investment plans must be at least IDR 10 billion for each company activity.
  • Local registered address in a commercial building

• KPPA requirements:

  • Must hire a minimum of one chief representative officer.
  • Chief representative officer cannot be director
  • Local registered address in a commercial building

• Register the name of the company
• Request for Deed of Establishment
• Apply for the Domicile Certificate of the Company
• Acquire a tax registration number (NPWP)
• Obtain your business ID number (NIB)
• Submit any other relevant certifications or authorizations
• Acquire work visas
• Open a business bank account

For foreigners who want to invest in PT PMA in Indonesia, it must have a minimum investment of 10 billion Indonesia Rupiahs. Moreover, a minimum paid-up capital requirement of 2.5 billion Indonesian rupiahs is mandatory for foreigners seeking to establish a foreign-owned PMA company in Indonesia.

A PT can only be owned by Indonesian citizens following Indonesian law. However, foreigners can establish a company in Indonesia by making a partnership with locals to invest in PT PMA.

In Indonesia, the standard rate of corporate income tax (CIT) is 25%. Nonetheless, for the fiscal year 2020/2021, it is reduced to 22%. Besides, starting from the year 2022 and onward, it will be further decreased to 20%.

In Indonesia, companies are required to register all relevant information in the data registration system of the Ministry of Law and Human Rights (MoLHR) according to Article 29 of Law No. 40 of 2007 on Limited Liability Companies, as amended by Government Regulation in Lieu of Law on Job Creation No. 2 of 2022 (“Company Law”).

MoLHR Regulation No. 41 of 2021 on the Organization and Work Procedures of the Ministry of Law and Human Rights designates the Directorate General of Administration of General Laws (AHU) to be responsible for handling administrative legal matters, including company registration. To facilitate public access to registered company information in Indonesia, AHU has developed an online public service platform called AHU Online, which can be accessed through the AHU website: https://ahu.go.id/.

AHU Online is a user-friendly platform that allows visitors to access information about companies registered under the Company Law in Indonesia. The platform is accessible through desktop or mobile web browsers and offers a search bar feature on its home page. To access the search page, visitors can click on the “Data Download AHU” button on the home page, which will redirect them to a search page dedicated to this purpose. Alternatively, visitors have the option to access the search page directly by using the following link: https://ahu.go.id/pencarian/profil-pt. Once they are on the search page, they can enter the name of the company they are interested in. If the search is successful, the platform will display relevant information about the company on a search result page.