2025 Comprehensive Guide to Company Registration in Indonesia: Process, Types, and Compliance Points

I. Core Path Selection for Foreign Investment Access

(1) Foreign Investment Limited Liability Company (PT PMA)

1. 100% Foreign Ownership Advantage: Allows 100% foreign ownership (except for industries on the negative list).
2. Industry Restrictions: Construction industry foreign ownership cap at 67%, telecommunications at 49% (refer to the latest Investment Negative List).
3. Minimum Paid-Up Capital: IDR 100 billion (approximately RMB 4.5 million) must be fully paid up.
4. Applicable Scenarios: Strategic investments such as manufacturing base construction and large-scale infrastructure projects.

(2) Representative Office (KPPA)

1. Functional Limitations: Limited to non-operational activities such as market research and coordination.
2. Industry Access: Can be applied for in specific fields such as construction and electricity.
3. Transition Value Case: A Chinese power company conducted a survey on Indonesia’s power grid demand through the establishment of a representative office.

II. Key Elements for Registration Preparation

1. Shareholder Structure
   • At least 2 shareholders (individuals or legal entities).
   • Designate 1 Indonesian resident director.
2. Registered Address
   • Virtual office leasing is accepted.
3. Paid-Up Capital
   • Minimum IDR 100 billion (new regulation by BKPM in 2024).
   • Must be deposited in a local Indonesian bank.
4. Naming Conventions
   • English/Indonesian naming (format: PT + three words).
   • Must be approved by the Ministry of Law and Human Rights.

III. Full Registration Process Breakdown (Average Cycle 45 Days)

1. Name Pre-Review
   • Prepare 3 alternative names (e.g., PT.AsiaGlobalTech).
   • Avoid religious and politically sensitive terms.
2. Document Notarization
   • Articles of Association (must include equity structure and profit distribution clauses).
   • Shareholder documents: Personal passports/Company business licenses (must be notarized in Indonesian).
3. License Application
   • Submit a temporary business license application through the BKPM system.
   • Obtain a SK approval letter from the Ministry of Justice.
4. Tax Registration
   • Obtain NPWP tax number.
   • Apply for NIB/SS/IZIN business license according to risk level.
5. Bank Account Opening
   • Recommended banks: BCA, Mandiri, CIMB Niaga.
   • Capital injection certificate must be filed with the Investment Coordinating Board.

IV. Compliance Path for Cross-Border Funds

1. ODI Filing
   • Ministry of Commerce’s Enterprise Overseas Investment Certificate.
   • Foreign Exchange Administration’s overseas investment foreign exchange registration.
2. Foreign Exchange Remittance
   • Special application required for single transactions exceeding USD 5 million.
   • Investment agreement, articles of association, and other documents must be provided.
3. Tax Optimization
   • Corporate income tax rate reduced to 20% starting from 2025.
   • Transfer pricing must comply with OECD standards.

V. Three Key Points for On-the-Ground Operations

(1) Legal Compliance Points

1. Obtain IUT permanent business license (within 6 months after registration).
2. Specific industries need to handle APIT import license and AKD customs clearance qualifications.

(2) Human Resource Allocation

1. Foreign employees need to obtain IMTA work permits (quotas are subject to industry restrictions).
2. The mandatory social security system (BPJS) covers all employees.

(3) Localization Strategy

1. Adjust working hours during Ramadan.
2. Obtain product certification (SNI mark).

• Exchange Rate Fluctuations: The Indonesian Rupiah has fluctuated by up to 15% over the past three years. It is recommended to hedge risks using forward foreign exchange contracts.
• Sensitive Industries: Sensitive industries such as mining need to pay special attention to the local equity requirements of the New Mining Law.