How to Register a Company in Indonesia: A Step-by-Step Guide for Foreign Entrepreneurs

Indonesia is Southeast Asia’s largest economy and continues to attract foreign investors with its growing middle class, abundant natural resources, and strategic location. But before you can tap into this market, understanding the legal process to register a company in Indonesia is crucial.

This guide walks you through each step of company registration in Indonesia, including the legal structures available, licensing, and key regulatory bodies involved. Whether you're a startup, an SME, or a global corporation planning to open a company in Indonesia, this step-by-step overview will help you navigate the process confidently.

Why Start a Business in Indonesia?

One of the world’s top 20 economies (G20 member)
A large domestic market with over 270 million people
Government incentives for foreign investors, including in tech, manufacturing, and infrastructure
Competitive labor costs
Strategic access to regional and global trade routes

However, setting up a business involves navigating bureaucracy, understanding foreign ownership rules, and complying with local regulations. Let’s break it down.

Step 1: Choose the Right Legal Structure

For foreign entrepreneurs, the most common and suitable business entity is the PT PMA (Perseroan Terbatas Penanaman Modal Asing), or Foreign-Owned Limited Liability Company.

Types of Business Entities in Indonesia:

PT (Local Company) – Only for Indonesian nationals
PT PMA – For foreign investors
Representative Office – Non-trading entity for market research or liaison purposes

To open a company in Indonesia as a foreigner, a PT PMA is usually required.

Step 2: Meet the Capital Requirements

Indonesia has minimum capital requirements for foreign-owned companies.

Minimum Paid-Up Capital: USD 700,000 (equivalent in IDR)
Minimum Investment Plan: USD 1 million (including capital and operational expenses)
At least 25% of capital must be paid-up at the time of incorporation

This is to ensure that only serious investors enter the Indonesian market.

Step 3: Reserve Your Company Name

The company name must be:

In Bahasa Indonesia
Not already in use
Not offensive or similar to a government entity

You can reserve the name through the Ministry of Law and Human Rights (MoLHR) online system.

Step 4: Prepare the Deed of Establishment

The Deed of Establishment includes:

Company name
Shareholders and their capital contributions
Structure of directors and commissioners
Articles of Association

This document must be notarized in Bahasa Indonesia and submitted to the Ministry of Law and Human Rights for approval.

Step 5: Obtain Legal Entity Approval

After notarization, the Deed of Establishment is submitted to the MoLHR to obtain a Certificate of Establishment, which makes your business a legal entity.

Step 6: Obtain a Tax ID (NPWP) and Register with OSS

Steps:

Get a Taxpayer Identification Number (NPWP) – From the tax office (KPP) where your business is located.
Register with the OSS (Online Single Submission) system – A centralized platform for all business licensing in Indonesia.

Once registered, you'll receive a Business Identification Number (NIB), which acts as your import license, customs registration, and more.

Step 7: Apply for Relevant Business Licenses

Depending on your sector, you’ll need additional licenses. Common ones include:

Trading Business License (SIUP)
Manufacturing License
Construction Service License
Tourism License
Financial Services Authority (OJK) License – For finance-related businesses

Licenses are also issued through the OSS system, but specific ministries may require further documentation or approvals.

Step 8: Open a Local Bank Account

You’ll need:

Deed of Establishment
Tax ID
NIB
Directors' and shareholders’ identification

Once your account is active, you can deposit your paid-up capital as per your investment plan.

Step 9: Domicile Letter and Business Address

Indonesia requires a physical office. Virtual offices may be allowed for certain businesses in Jakarta and Bali, but industrial or trading companies need a commercial space.

The local municipality (Kelurahan or Kecamatan) will issue a Domicile Letter (Surat Keterangan Domisili Perusahaan), confirming your registered address.

Step 10: Register for Manpower and Social Security (BPJS)

If you plan to hire employees, register your company with:

BPJS Kesehatan (Health Insurance)
BPJS Ketenagakerjaan (Employment Social Security)

These are mandatory for any company employing staff in Indonesia.

Step 11: Employing Foreign Workers (If Required)

To employ foreign nationals, you need:

RPTKA (Foreign Manpower Utilization Plan)
IMTA (Work Permit)
KITAS (Temporary Stay Permit)

The process has been streamlined, but each expatriate worker must meet education and experience qualifications.

Also Read: Benefits of Company Registration in Thailand for Foreigners

Timeline for Company Registration in Indonesia

On average, the process to fully register a company in Indonesia takes 3 to 8 weeks, depending on the sector, location, and completeness of documentation.

Compliance and Ongoing Obligations

Once your company is set up, you must:

Submit annual tax returns
Maintain financial records
Conduct annual general meetings
Renew business licenses periodically

Non-compliance may lead to penalties or license revocation.

FAQs: Company Registration in Indonesia

1. Can I own 100% of a company in Indonesia as a foreigner?

Yes, in many sectors. However, some industries fall under the Negative Investment List or Positive Investment List, which may restrict or limit foreign ownership.

2. How long does it take to open a company in Indonesia?

Typically, it takes 3 to 8 weeks, depending on the business sector, documentation, and responsiveness of government authorities.

3. Can I register a company in Indonesia remotely?

Yes, with a local consultant or legal representative, you can manage most of the process remotely, although you may need to travel for bank account setup or final document signing.

Also Read: Documents Required for Company Registration in Liberia

Final Thoughts

Indonesia offers vast potential for foreign investors, but registering a company involves navigating a complex set of regulations and licensing procedures. If you’re planning to open a company in Indonesia, consulting with local legal experts can save time and prevent costly mistakes.

By following these steps, you’ll ensure a smooth company registration in Indonesia and start your business journey on the right legal footing.