Company registration in Indonesia provides foreign entrepreneurs with a wide range of legal opportunities to carry out investment activities. A combination of factors including growing consumer demand, optimal geographic location, continuous improvement of infrastructure and strong macroeconomic performance position Indonesia as an attractive environment for foreign direct investment.
Indonesian law grants foreign founders the right to 100% ownership of capital and carry out a wide range of economic activities. The process of registering a company in Indonesia for foreigners, despite certain specifics, has been optimized through the introduction of an e-government system, which can significantly reduce registration time and minimize administrative barriers.
This article https://tkdeal.com/registration/registracia-kompanii-v-indonezii-posagovoe-rukovodstvo-na-2025-god will analyze the economic and legal factors that determine the attractiveness of the Indonesian market for foreign investors. Special attention will be paid to the requirements for registering companies in Indonesia.
Creating a company in Indonesia: what is attractive about this jurisdiction?
Registering a business in Indonesia provides significant competitive advantages. The strategic position of the state, located at the intersection of key maritime trade routes, provides unhindered access to the markets of the Asian continent, covering such economic giants as the People's Republic of China, India, and Japan. For business entities focused on foreign economic activity, registering a company in Indonesia opens up prospects for optimizing logistics processes and direct access to the world's largest seaports.
The state is pursuing a policy aimed at attracting investment into priority sectors of the economy, including industry, the agricultural sector and the high-tech sector. In the course of implementing this policy, business entities are provided with tax breaks and a simplified procedure for obtaining permits. The state program “Invest Indonesia” provides comprehensive support for investment projects in Indonesia, including the provision of information services, legal advice, and assistance in solving organizational issues.
Foreigners wishing to open a business in Indonesia benefit from an extensive network of international treaties. Indonesia is involved in the process of tax law harmonization, having concluded no less than 71 DTTAs. These treaties provide Indonesian taxpayers with a number of tax preferences, such as exemption from taxes on income earned abroad or the application of reduced tax rates, which significantly reduces the tax burden on international business transactions.
Legal aspects of legalization of commercial activities
Foreign founders can register a company in Indonesia in one of the following forms:
- Perseroan Terbatas dengan Penanaman Modal Asing (PT PMA).
- Representative Office.
Registration of a business in Indonesia in the form of PT PMA is the preferred option for foreigners due to the possibility of full control over commercial operations and direct participation in management. However, for the purposes of market research and establishing business contacts, foreign corporations can register a representative office in Indonesia. The Representative Office does not have the status of a separate legal entity and does not have the right to conduct profitable activities. Its main functions are to collect information about the market, promote goods and services of the parent company, organize meetings and negotiations with potential partners.
Registration of a company with foreign investment in Indonesia is associated with the need to comply with the legally established minimum amount of authorized capital, equivalent to 10 billion IDR (≈ 640 thousand USD). Although Indonesian law allows full foreign ownership in certain sectors of the economy, the scope of foreign capital is strictly regulated by the negative list, which contains a list of economic activities that are not available to foreign participation.
To open a company in Indonesia in the form of PT PMA, the law requires at least two founders. The corporate governance of such a company is carried out through a collegial body headed by a general director, vested with broad powers to make strategic decisions. Legal support of the company’s activities is entrusted to the corporate secretary, who is called upon to monitor compliance with legal requirements and corporate procedures.
Business registration process in Indonesia
The procedure for registering a company in Indonesia involves the need to comply with numerous formal requirements and undergo a number of administrative procedures.
Key steps in the process of registering a company in Indonesia:
- Determination of the optimal form that corresponds to the goals and objectives of the business being created.
- Checking the uniqueness of a company name and obtaining permission to use it.
- Appeal to the Ministry of Trade with the appropriate application and a set of documents.
- Payment of registration fees.
- Entering information about a legal entity into the unified state register of business entities.
It should be noted that the legislation provides for the possibility of remote registration of companies in Indonesia. A legal entity is required to obtain special licenses, if any, for carrying out a specific type of economic activity. The presence of a license serves as confirmation of the compliance of a business entity with established regulatory requirements governing functioning in the chosen industry.
In order to optimize the processes of managing corporate financial flows, it is required to open an account in an Indonesian bank in the name of the company. Leading financial institutions providing a wide range of products and services to foreign clients include:
- Central Asia.
- Rakyat Indonesia.
- CIMB Niaga.
In which industries can foreigners register a company in Indonesia?
Indonesia is an attractive market for foreign job seekers. Registration of a company in Indonesia by a non-resident is permitted in a wide range of sectors, but the sectors described below attract the most attention.
The tourism sector is thriving, due to the unique natural beauty, rich cultural heritage, and developing infrastructure. Investments in the tourism business in Indonesia can be directed to the construction of hotels, resorts, and the organization of tourism services. The legal attractiveness of this sector is due to the presence of special economic zones that provide tax discounts and simplified registration procedures.
E-commerce is at an early stage of development, which creates potential for growth. The rapid increase in the number of Internet users stimulates the development of online commerce. Investments in this sector can be directed to the creation of E-commerce platforms, logistics centers and the development of payment systems.
The trade sector is characterized by high levels of consumption and a growing middle class. Registration of companies in Indonesia and investments in the trade sector can be aimed at creating retail networks, distribution centers and developing supply chains.
Mining is one of the key sectors of the Indonesian economy. The country has rich reserves of oil, gas and other minerals. And although investments in this sector offer great prospects for development, they are associated with high environmental and social risks.
The technology sector is demonstrating dynamic development, especially in the field of information technology and mobile communications. Investments in this sector can be aimed at creating IT startups in Indonesia, developing software and introducing innovative technologies. The legal environment for the development of the technology sector includes legislation on intellectual property protection, e-government and cybersecurity.
Tax aspects
Before setting up a company in Indonesia, you should familiarize yourself with tax regulations. Although the basic corporate tax rate is 22%, the legislation establishes special regimes that provide for a reduction in the tax rate for relevant categories of taxpayers. Issuers of securities admitted to organized trading have the right to apply a reduction factor to the tax base, which allows reducing the tax rate to 19%. VAT rate is from 5% to 15%. For certain categories of goods and services, special regimes are applied, providing for the collection of excise taxes when imported into the customs territory of the state or sold on the domestic market at a rate of 10% to 95%.
If you are interested in opening a company in Indonesia, we can offer comprehensive services, including full support in the process of registering a business in Indonesia.
Source: https://tkdeal.com