Indonesia’s growing demand for professional services makes it an attractive market for consulting businesses. With favorable investment policies, many foreign entrepreneurs are exploring business opportunities in the country.
If you’re planning to register a consulting company in Indonesia, understanding the local regulations and requirements is crucial. In this guide, we’ll walk you through the essentials of setting up a consulting company in Indonesia as a local or foreign investor.
Can Foreigners Set Up A Consulting Company in Indonesia?
As per Presidential Regulation No. 10 of 2021, foreign nationals are permitted to establish consulting companies in Indonesia. This regulation replaced the previous negative investment list with the Positive Investment List and opened up several sectors to foreign ownership that were previously restricted.
Most consulting services, including management consulting, technology consulting, and human resources consulting, are now fully open to 100% foreign ownership.
Legal Framework for Consulting Companies in Indonesia
Consulting companies in Indonesia can be established as either a Local Company (PT PMDN) or a Foreign-Owned Company (PT PMA), depending on the ownership structure. Foreign investors typically set up a PT PMA, which allows up to 100% foreign ownership in certain sectors, including consulting services.
- PT PMA (Penanaman Modal Asing): For foreign investors.
- PT PMDN (Penanaman Modal Dalam Negeri): For local investors.
Moreover, Indonesia has a Business Classification Code (KBLI) system, which categorizes business activities. For consulting, the relevant KBLI codes include:
- 69102: Legal Consultancy Activities
- 69103: Intellectual Property Consultancy Activities
- 70209: Management Consulting Activities
- 74902: Business Consultation and Business Broker Activities
- 62024: Internet of Things (IoT) Consultation and Design Activities
When setting up your company, you must choose the relevant KBLI code as per your planned business activities.
Key Requirements for Registering a Consulting Company
The requirements for setting up a consulting company in Indonesia vary depending on local and foreign ownership. Here’s an overview of key requirements for Local Investors (PT PMDN):
- Minimum of 2 shareholders.
- Minimum of 1 director and 1 commissioner
- Registered office address in Indonesia.
- Tax Identification Number (NPWP).
For Foreign Investors (PT PMA), the requirements to register a consulting company include the following:
- Minimum of 2 shareholders (individuals or corporate entities).
- Minimum of 1 resident director and 1 commissioner.
- Registered office address in Indonesia.
- Tax Identification Number (NPWP).
- Proof of IDR 2.5 billion (~USD 150,000) paid up capital
Foreign-owned consulting companies must submit an investment plan with a minimum total investment of IDR 10 billion (~USD 750,000) to the Badan Koordinasi Penanaman Modal (BKPM), the local governing authority in charge of foreign investments in Indonesia.
Steps to Register A Consulting Company in Indonesia
Registering your consulting company in Indonesia can be a seamless experience with Emerhub’s expert guidance. Our local business specialists provide comprehensive support at every step of the process, from preparing your investment plan to obtaining an NPWP tax card:
- Incorporate Your Company: Reserve a company name and acquire all the mandatory requirements for setting up a local PT company or a PT PMA.
- Obtain Necessary Licenses: Register and apply for industry-specific licenses for your consulting business at their local governing units or through the Online Single Submission System (OSS). These licenses depend on specific activities your business will perform. For instance, IT consulting companies need to obtain a permit from the Ministry of Communication and Information Technology while Financial Consulting companies need to register with the Financial Services Authority (OJK).
- Register for Taxation and Employee Social Security Fund: Register with the local tax office to obtain an NPWP tax card and start paying taxes in compliance with local laws. For businesses with employees, it is mandatory to register them with the country’s social security funds.
Post Registration Compliance
After successfully registering your consulting company, you must ensure compliance with local laws and regulations to avoid penalties and fines. Our experts will handle the following post-incorporation:
- Submit quarterly/semi-annual Capital Investment Activity Reports (LKPM) through the OSS System governed by the BKPM.
- Assist with adherence to industry-specific regulations (ex: finance, IT, etc.)
- Secure an office space or provide a virtual office if needed.
For more information on starting a business, read our Guide to Starting a Business in Indonesia as a Foreigner.
Interested in registering a consulting company in Indonesia? Fill out the form below and our experts will assist you.
Frequently asked questions
Can a foreign-owned consulting company hire workers in Indonesia?
Yes, but you must obtain work permits (KITAS) and stay permits for foreign hires.
Is it mandatory to have a local partner for a consulting company?
For most consulting companies, a local partner is not necessary, as the PT PMA business structure allows 100% foreign ownership. However, it is recommended that specific business activities (KBLI Codes) be checked for any restrictions.
How long does it typically take to register a consulting company in Indonesia?
Depending on your business structure and the efficiency of the document preparation, incorporation could take 1 to 3 months for a consulting company in Indonesia.
Are there specific data protection and confidentiality rules for consulting companies in Indonesia?
Consulting companies must adhere to Indonesia’s data protection laws, including the Electronic Information and Transactions Law. Plus, implementing proper data protection measures and confidentiality agreements.