Indonesia is an attractive destination for entrepreneurs and foreign investors looking to expand their business operations because of its large consumer market and growing economy. However, to operate your business in compliance with local laws, you must register a company and obtain necessary licenses and permit.
In this article, we will walk you through the steps to register a company in Indonesia and discuss the key requirements.
Most Common Business Entities in Indonesia
In Indonesia, the most popular business entity is the Perseroan Terbatas (PT), which can be either a local PT (100% Indonesian-owned) or a PT PMA (foreign-pwned company).
A PT PMA, allows up to 100% foreign ownership in certain sectors and requires higher minimum paid-up capital than a local PT company.
Other common business entities in Indonesia include:
- Representative Office: allows foreign companies to conduct market research without direct sales.
- Branch Office: serves as extensions of foreign firms in specific industries.
- Yayasan (foundation): for non-profit organizations
Refer to types of business entities in Indonesia for more details.
Key Requirements for Setting up a Company in Indonesia
The requirements to register a company in Indonesia vary depending on whether it's a local company (PT) or with foreign ownership (PT PMA). Here is an overview of key requirements to for both cases:
- Paid-up Capital: The minimum capital requirement for a foreign-owned PT PMA company is 2.5 billion Rupiah (approximately USD 150,000*) and for a local PT company is 50 million Rupiah (approximately USD 3,500).
- Corporate Structure: Every limited liability company in Indonesia must have at least two shareholders, one commissioner, and one director. The director must be a resident (foreigner with KITAS or an Indonesian citizen) and must have a tax card (NPWP).
- Business Address: Having a registered business address is mandatory to register a company in Indonesia. Emerhub will provide you with a compliant virtual address (if needed) depending on your company KBLI.
Due to higher minimum paid up capital requirements and restrictions in certain sectors for PT PMA, many foreign investors opt for the nominee shareholder. This is a person or a company that is the registered shareholder of a company on behalf of the real owner.
Refer to our article on nominee shareholder to learn more about it.
* the USD amount may vary depending on the current exchange rate.
How to Register a Company in Indonesia
The establishment process for most business lines goes through a centralized system called One Single Submission (OSS). This has made registration easier and faster. The registration of a PT PMA used to take 10 weeks, with the OSS, registration can be completed in less than 5 working days if your business does not need additional licenses.
1. Business Name Reservation
To register a company in Indonesia, the first step is to reserve a unique company name with the Ministry of Law and Human Rights. The name must consist of at least three words and comply with specific guidelines.
For PT PMA companies, names can be in English, while local PT companies must use Indonesian names. Moreover, the name should not be already in use, shouldn't violate morality, and must be written in Latin characters.
2. Prepare the Deed of Establishment
The Deed of Establishment is a formal document that includes your Articles of Association, details of planned business activity, and shareholder information. This document must be prepared in Indonesian and notarized by an Indonesian notary public.
Emerhub's local experts will prepare the Deed of Establishment on your behalf. We will check your planned business activities and recommend the business classification (KBLI) that will work best for you.
Once the Deed of Establishment is ready, all shareholders or their authorized representatives must sign this document.
3. Application Submission to MOLHR
After notarization, the next step is to submit the Deed of Establishment to the Ministry of Law and Human Rights (MOLHR) for approval.
MOHLR throughly reviews the company's founding documents from the business name to the proposed business activities.
Upon approval, the Ministry will issue a decree ratifying your company's legal entity status.
4. Obtain the Tax Identification Number (NPWP)
Upon company incorporation, you need to register for a Tax Identification Number (NPWP) with the Directorate General of Taxes. This can be done be done at your local tax office.
5. Apply for the Business Registration Number (NIB) through OSS
The NIB in Indonesia serves as your company registration certificate, import license, and enrolls your company in social security programs.
Therefore, as soon as you register your company with MoHLR and and secure your NPWP, the next step is to apply for Identification Number to Operate (NIB). This is also known as the business registration number or Nomor Induk Berusaha in local language.
6. Secure Mandatory Licenses and Permits for Company
Depending on the nature of your business activities, you may need to obtain additional licenses and permits. These permits are often industry-specific and ensure compliance with regulations in particular sectors.
Some common business licenses in Indonesia include:
- Commercial License for trading and wholesale activities
- Industrial License for manufacturing and industrial activities
- Tourism License
- Construction Services Business License
- Halal Certification
- BPOM Certification for companies dealing with food, beverages, cosmetics, or pharmaceutical products
You can book a free consultation with our local business advisors to determine the specific permits you might need.
Timeline to Register a Company in Indonesia
The timeline for company incorporation in Indonesia varies depending on the area where you plan to set up for business because of the decentralized nature of the Indonesian government.
However, the average time it takes to register a company in Jakarta (capital city) is much faster than other parts of the country.
Below is an estimated timeline for company registration in Jakarta.
| Process | Estimated Timeline in working days |
|---|---|
| Approval of Company Name | 1 |
| Minute of the Deed of Establishment | |
| Deed of Establishment | 1 |
| Ratification from MOLHR on Deed of Establishment | |
| Tax card | 1*-5 |
| NIB and Commercial License/Operating License | 1 |
| Total | 4-9 |
After the registration process, Emerhub can facilitate opening a bank account for your company. We have a long standing relationship and special arrangements with several banks. This enables us to help you open a corporate bank account without physical appearance at the bank.
Accelerated Company Registration Process in Jakarta
Emerhub Indonesia has built a proprietary online system that cuts down several of the time-consuming application processes. This allows us to provide the fastest corporate entity formation service in Indonesia. If you don't need additional licenses and use our virtual address, the registration will take just five working days.
Register Your Company in Indonesia with Emerhub
Ready to set up your company in Indonesia? Emerhub's local business advisors will handle the entire company registration process on your behalf and secure the necessary licenses and Permits.
We will advise you on the most suitable legal entity based on your planned business activities, reserve the business name, draft the deed of establishment, and secure the final approvals.
Fill out the form below and we will put you in touch with one of our experts in Indonesia.