A guide to different types of legal entities in Indonesia.
Limited liability company (PT PMA)
Limited liability (PT PMA) company registration in Indonesia
Limited liability companies with foreign ownerships (abbreviated as PT PMA) are the most common types of legal entities in Indonesia for foreign businesses.
Key requirements for PT PMAs
Here are the key requirements for company registration in Indonesia:
At least two shareholders.
As long as even one share is owned by a foreign shareholder the company is considered a PT PMA.
A registered address
Many business classifications (KBLI) are in the Negative Investment List (DNI) which limits the maximum allowed foreign ownership. Classifications not in the negative list can be owned up to 100% by foreign shareholders.
Minimum paid-up capital is Rp. 2.5 billion (~175,000 USD) which is committed with a capital statement letter.
Some business activities require additional licenses and/or capital. For example, import or construction licenses.
Company registration timeline in Indonesia
Timeline in working days
Approval of company name
Minute of the Deed of Establishment
Deed of Establishment
Ratification from MOLHR on Deed of Establishment
NIB and Commercial License/Operating License
4-8 working days
*Getting the tax card within a day is possible if your company is registered using our virtual office service.
The above timeline applies to businesses registered in Jakarta. Registration usually takes longer in other places and would depend on the local government of that area. Please also note that the timeline may be longer for more complicated business classifications.
Corporate structure of a PT PMA company
All companies with foreign investments follow the regulations of large-sized companies in Indonesia. The key requirements for the corporate structure are the following:
Minimum two shareholders.
Both individual and corporate shareholders are allowed.
PT PMA is governed by directors that are in charge of the daily operations of the company and that are supervised by the commissioners.
At least one director needs to have the local tax card (NPWP) but does not have to be an Indonesian citizen.
Directors and commissioners can also be shareholders of the company and are eligible to apply for the non-permanent residence permit (KITAS).
Regional differences for company registration
While most of the company registration processes are centralized, they also include approvals from the local municipality. This causes some differences in company registration timelines and requirements. Here are some common examples:
In Jakarta, a registered address must be in a building with a commercial building permit. If you are registering a service business then you can use Emerhub’s virtual office to expedite the registration.
In Bali, the local municipalities process the local permits for an additional 4-8 weeks.
While different regions may have slightly different requirements, you should always register the company in the location where you actually will do business and hire employees since you will have to also report the taxes locally.