Indonesia's Investment Law requires foreign owned companies to invest US$1 million dollars to get investment approval and puts many industries into negative investment list. Nominee Company gives you the ability to have a legal entity that you fully control but that won't have to comply with foreign company regulations.
Two main reasons why many foreign investors prefer to have a nominee company in Indonesia
As a foreign owned limited liability company (PT PMA) you would have to:
Until this year, companies could just have an investment plan on paper and Investment Coordinating Board (BKPM) would rarely reject it.
Since March 2015, massive number of (especially service sector) company applications have been rejected. The key reason – BKPM is not convinced that those companies would actually invest all that money in Indonesia.
BKPM knows that foreign owned companies have been faking their investment plans and are now very cautious of whether the investment will actually take place or not.
Audited financial report
Every foreign owned company is required to get a permanent business license within the time they were given with the initial investment approval. Without that license, company is unable to get additional licenses and permits such as import license which is critical for a lot of companies.
Since this year in order to receive the permanent business license companies must have audited financial reports that prove that the investment was made.
So unless you actually realized the Investment Plan of US$1 million you won’t be able to get permanent business license.
Three solutions to set up a service company in Indonesia
Solutions for service sector companies in Indonesia
Set up a limited liability company with 10 billion IDR (equals to ~1 million USD).
Instead of a limited liability company (PT PMA) set up a representative office. This works as long as you don’t plan to earn revenue in Indonesia.
Use a locally owned nominee company that you have full control over and that doesn’t need to comply with the foreign owned company regulations.
Nominee Company service
Since many service sector companies are not ready to invest 10 billion Rupiah within a year but still want to earn revenue in Indonesia, Indosight has prepared a specialized service for the companies in the service sector. This service includes:
A package of legal contracts to safely have your company owned by Indonesian shareholders without them having any control over the company or its finances
Monthly compliance services to ensure the company declares correctly newly implemented employee taxes (BPJS)
You are legally the director of the company and have full control over the company
Comparison between foreign owned and Nominee Company
Foreign owned company (PT PMA)
Legal entity type
PT (foreign owned)
PT (locally owned)
Legal owner in Articles of Association
Indosight based on loan agreement with you
600 million IDR (~US$50,000). Less if you don’t wish to employ any foreigners nor be a director.
Maximum foreign ownership
0-100% depending on your business classification
Hire foreign experts
Change shareholders whenever required
Control over finances
Director of the company
Director of the company (which can be you)
Get a quote for nominee company in Indonesia
Included to Nominee Company Package:
Registered address, which is a requirement for any legal entity in Indonesia. If you have your own physical office, you can use your own address.
Compliance (tax and BPJS reporting), ensuring your monthly and annual reporting is done correctly.
Incorporation fees, including everything from principal license to tax number.
2 nominee shareholders, in order to become a local company you will have to have two Indonesian citizens or companies as shareholders
1 nominee commissioner
Set of legal agreements, which will give you full control over company and allow you to change shareholders when you wish so