Singapore vs Hong Kong: Where to Set Up Your Offshore Company
When it comes to setting up an offshore company in Asia, two countries usually come to mind. Singapore and Hong Kong are certainly the most secure and safest places to open an offshore company in Asia. Both countries have advantages and disadvantages, and choosing one or the other will depend on the investor. What is an offshore company? Business owners typically set up offshore companies in countries outside their own residence and separate from where they conduct their main business activities. Most business owners set up offshore companies to operate as holding companies. Offshore companies have a bad reputation due to some countries not respecting the minimum requirements and setting them up in countries that do not do diligence on the company’s activity or where the funds are coming from. Entrepreneurs can legally and safely set up an offshore company, as long as the chosen country has signed international treaties and is fully integrated into the global banking system. Why to use an offshore company? Using an offshore company can be useful in many circumstances. Here are some examples why to use an offshore company: Certain countries prohibit dealings with specific other nations, making it necessary for some companies to establish entities in alternative jurisdictions to finalize agreements. As tax resident of a country dealing with a country directly can be not tax efficient and if the offshore country has a better deal with the intermediary country it can be interesting to set up a company offshore Avoid high tax pressure in a country and conduct the business directly from a country with a better tax rate Rapatriate the income in a country with a more stable economy and financial system Each company or individual has its own interest in setting up an offshore company. Some e-commerce companies will prefer to use an LLC in the US to sell their products in the US while others will prefer Singapore and Hong Kong to use the Asian treaty to deal and invest in Asia. When it comes to setting up offshore companies, a lot of criteria are important. While countries like Seychelles offer an interesting set up, it is important to see if the intermediary bank will not block the transfer. Banks nowadays are more entitled to block some international transfers to avoid any risks. A few clients set up their companies in jurisdictions like Nocibe and Seychelles and experienced transfer blocks lasting several months. Getting money into this country is easy; however, getting money out can be challenging. Singapore and Hong Kong offer great alternatives for those looking to set up an offshore company in countries that respect international norms and offer low taxation. They are also great solutions for people investing, for example, in Thailand and Indonesia. Singapore versus Hong Kong Singapore Company Singapore is hosting the headquarters of a lot of companies in Asia. Its perfect location in Southeast Asia and close to Australia offers a secure location and banking system. The taxation is low and does not tax foreigners as shareholders if the person is not located in Singapore. The country also provides a 0% tax rate on the income tax of the company as long as the company is under a certain threshold. However Singapore requires a resident director for the company. Bank accounts in Singapore can be opened by the company’s resident director. The process can be fast with some online banking or require the director to go to Singapore to open the bank account. Having a resident director helps to open the bank account. Singapore’s capital starts at 1 USD, making it a good solution for people looking to set up a company in Southeast Asia. Hong Kong Company Paradise for holdings and online business, Hong Kong has always been a financial place attracting FDI from all over the world. Setting up a company in Hong Kong is fast and can be done remotely. Compared to Singapore, Hong Kong doesn’t require a resident director. It simplifies the maintenance process and also does not give the directorship to the employee of a company the shareholders don’t know. Hong Kong exempts offshore companies from tax on dividends and income, provided they generate their turnover outside Hong Kong. With its location near China and Southeast Asia, Hong Kong offers the best offshore solution in the area. We also provide complete services to assist in the process of registering and opening a company in Hong Kong. It starts from initial consultation and document collection to the completion of all administrative procedures in accordance with applicable regulations. A bank account may be opened online; alternatively, the company director must travel to Hong Kong to open an account at a traditional physical bank. Russian nationals are permitted to establish companies, provided they reside outside of Russia Also Read : Why and how to open a company in Hong Kong Hong Kong versus Singapore: which one to choose? Singapore Hong Kong Dividend tax 0% 0% Corporate tax 0% with some exemptions and 15 to 17% 0% if turnover done outside HK Tax Treaty Good tax treaty Best tax treaty with country in Asia Choosing where to open your offshore company depends on each person and the situation of the business. At ILA, we generally prefer setting up offshore companies in Hong Kong. This preference is largely due to the resident director requirement and the high maintenance fees associated with accounting and compliance in Singapore. Even without considering Hong Kong’s more favorable tax treaties and rates, it remains a more practical option for foreign non-residents
How to Create E-commerce Business in Bali
Setting up an e-commerce business in Bali is essential for any business willing to grow their sales. Indonesia and Bali allow foreigners to set up online businesses and accept online payments. People willing to live in Bali, Lombok or any place in Indonesia can set up an online business and sell their products or services to Indonesian customers or to other countries in the world. Before starting an online business, there are several factors to consider, and it is important to understand the local regulations in Indonesia for e-commerce and online payment. Although companies such as Stripe are not allowed in Indonesia, there are several alternatives for succeeding in creating a successful online business in Bali and the rest of Indonesia. Definition of Market Place and E-commerce Business in Indonesia Indonesia makes a differentiation in terms of business licence between setting up a marketplace or selling products to the end customer. Marketplace Good news for foreigners: for a long time, it was not possible to set up a marketplace such as Tokopedia or Alibaba, and setting a marketplace is open to 100% foreign investments. Foreigners can develop applications and websites to connect buyers and sellers to purchase and sell online products or services. A marketplace facilitates the transactions of goods and services. In the context of an e-commerce business in Bali, the marketplace is not a PJP, payment, or payment service provider. This means the marketplace must use a third party to facilitate payments, as these services are regulated by the Bank of Indonesia. Retail e-commerce This activity is defined by the Indonesian regulator as retail trading activities through mail or the internet (e-commerce). Specifically, buyers make their choices through advertisements, catalogs, information on websites, examples, or other types of advertising. Moreover, in an e-commerce business in Bali, buyers place orders via mail, phone, or the internet, usually through special facilities provided by the website. Furthermore, products that have been purchased can either be directly downloaded from the internet or physically delivered to customers. Registering a company in Indonesia has never been easier Setting up a business abroad can be challenging with so many documents, laws and regulations to consider. Luckily, the process will be a breeze, and we’ll give you expert advice on which business structure and setup will fit your needs. Reach out to the ILA team today to set up a free consultation or read more about the company registration process. How to set up a marketplace or e-commerce business in Indonesia Setting up a PT PMA in Indonesia As foreigners, there is only one structure of a company allowing to generate income in Indonesia. Foreigners can only set up a PT PMA, which is the only type of LLC (Limited Liability Company) available to them. The PT PMA (Penanaman Modal Asing), which can be translated to Foreign Direct Investment Company in Indonesia. Authorities consider a company a PT PMA if it has at least one foreign shareholder, even if an Indonesian person is also a shareholder. Read More : How To Establish A PT PMA In Bali Setting up a company can take between 3 days to 2 weeks, and businesses can complete the procedure online. The company must have at least two shareholders, and it also allows legal entities to become shareholders. The regulations set the minimum share percentage at 0.1%, while the current minimum paid-up capital for a PT PMA is 10 billion IDR. With this possibility, a person having a company outside Indonesia can own a PT PMA at 100% without any other shareholders. The structure requires at least 1 director and 1 commissioner. The commissioner or director doesn’t have to be a shareholder and can also be a foreign national. After establishing the company, the director must be reappointed at least every five years. Once the company is fully incorporated, business owners will receive the following documents: Akta (Deed of establishment) Ministry approval (SK) Company profile NPWP (tax card) NIB (business identification number) Sertifkat Standard After this step the director of the company has to proceed with an investor KITAS or a working KITAS in order to receive a tax number and be able to declare the tax of the company. The KITAS is a limited stay permit allowing the foreigner to stay in Indonesia and become resident. Applying for a PSE licence For companies operating in Indonesia and having a payment gateway or receiving online payment, it is necessary to proceed with a PSE licence. You must apply for the PSE license at the Ministry of Telecommunications. Specifically, the purpose is to protect client data and register websites that receive payments. Moreover, the Ministry processes the PSE license application within a few days, and businesses can then display it on their website to reassure clients and build confidence. Stay compliant with the regulation After establishing a marketplace or online business and incorporating the PT PMA, you must ensure compliance with various ministries, institutions, and regulations. A company has several obligations despite you setting up your company in Bali, Lombok or Jakarta. Here are some of the obligations of a PT PMA in Indonesia Quarterly Investment Report to the BKPM. Businesses must complete and submit the LKPM report in OSS every quarter. Annual tax declaration on Coretax Monthly income tax declaration BPJS payment for the director, commissioner or employees Report of withholding tax on payments made to provider Advantages to setting up a marketplace or e-commerce in Indonesia Indonesia has huge opportunities for e-commerce and marketplace businesses. Its large population, with over 200 million internet users and a growing middle class. The government supports the sector with tax incentives and simplified regulations, including low corporate tax rates incentives. For example ,new businesses can be taxed at only 0.5% on their income the first 3 years if they do not exceed 4,8 billion IDR. Digital payments through GoPay, OVO, and ShopeePay simplify transactions, while logistics improvements enhance delivery efficiency, making Indonesia one of the leading markets in e-commerce and marketplace.
Joint Venture and Joint Operation in Indonesia
The PT PMA is sometimes not the right structure for entities seeking temporary collaboration. In such cases, Joint Venture Indonesia offers a flexible solution, allowing two entities to work together for a specific project or timeframe without the need to establish a new company. Commonly called Joint Venture and Joint operation, Indonesia also provides more flexible structures for companies, developers willing to create an entity for a certain period of time or a specific project. Less known than other types of structure such as PT PMA, Indonesia recognizes Joint Operation as KSO (Kerjasama Operasi) and Joint Venture as PT PMA with a limited time and project. Difference between Joint Operation and Joint Venture Indonesia Joint Venture A Joint Venture (JV) is a business arrangement in which multiple parties collaborate to achieve a specific goal, such as a new business, project, or investment. In a JV, each party retains its independent legal status while sharing control. The agreement defines the risks, profits, and losses. For foreigners a joint venture can be seen as a new entity between two or more parties. In Indonesia, two parties can create a PT PMA with a limited timeline for a specific purpose in order to collaborate on a market, specific product, development etc. Joint Operation A Joint Operation (KSO), also known as Kerja Sama Operasi, is a collaborative business between two or more parties in Indonesia. This partnership occurs on a specific project and does not necessitate the creation of a new legal entity such as PT PMA. KSOs are frequently utilized in sectors such as infrastructure, construction, property development. In Bali KSO is an alternative for developers, landlords and contractors willing to collaborate on a specific project in order to optimize the tax of the project. Feature Joint Operation Joint Venture Taxation At the partner level At the PT PMA level Type of entity KSO PT PMA Duration Project-based Defined in the Akta Profit distribution Based on the agreement Based on the shares Start your investment journey in Indonesia the right way With so many diverse investment opportunities in Indonesia, you need to make sure you’ve got the right setup to do business here. Get help from our team of experts to register your company and secure your visa and stay permit. Schedule a free call with us today to plan your next steps with ILA. Benefit of a KSO in Bali and Lombok A KSO is established through a contractual agreement between the parties involved. Unlike a joint venture, it does not constitute a separate legal entity. Instead, the parties involved share control and responsibilities within the KSO. This includes contributing resources such as capital, expertise, and equipment and jointly executing the project. The agreement defines a profit-sharing model for the project. Each party is responsible for fulfilling its financial obligations, including tax and accounting responsibilities, under its own legal structure. How to optimize tax as a developer in Bali and Lombok with a KSO For example, a developer willing to develop land but not having the capital to invest in it might collaborate with a landowner in order to define profit sharing. While one party brings the land as a contribution, the other party brings sales and marketing in order to build and sell villas. The benefit here is that both can collaborate without having to open a company together and they are entitled to collaborate only for the duration of the project. Another type of collaboration can be between a developer and a contractor. In order to simplify the sales, the developer and the contractor can create a KSO. Payment of the clients will go to the KSO and the payment related to the construction will go to the contractor while the payment related to the marketing and sales will go to the developer without having to pay double tax. Indeed if the developer receives payments from the clients, the developer is entitled to pay tax to the project management. Once the developer receives money, the developer has to pay the contractor and withhold tax. The same amount of money is taxed 2 times for one purpose. Read More: How To Establish A PT PMA In Bali How to open a KSO in Indonesia Define the terms and conditions In order to prepare the agreements, both parties need to discuss together on the following points. The notary and ILA will prepare the agreement based on the business orientation defined by the parties. Profit sharing Scope Duration Exit Strategy Roles and Responsibilities Tax responsibility Penalties Dispute resolution Registration with the notary A Kerjasama Operasi KSO requires a Akta pendirian. This deed is established by a notary in Indonesia based on terms and conditions defined by both parties. Tax registration As other types of entity, a KSO can obtain a tax number called NPWP. The tax number allows the entity to invoice clients, to collect income and have expenses and pay taxes. Bank account opening In order to control the income, expenses and profit of the KSO, the opening of a bank account is a secured solution for the members of the KSO. The expenses and sales are done directly at the bank account level. In order to open a bank account, the KSO need to provide the document below: Akta pendirian KSO ID/ Passport of the managing members of the KSO Akta pendirian and Ministy approval of the member of the KSO and all documents such as NIB + sertifikat standar, NPWP and ID of the directors Although developers and actors in Bali or Lombok are not really aware of it, KSO can be a useful structure depending on the type of project and collaboration.
Why and how to open a company in Hong Kong
Despite China being the main contributor of Foreign Direct Investment (FDI), other countries are opening companies and investing in Hong Kong. For those exploring how to open a company in Hong Kong, it is interesting to note that the British Virgin Islands (BVI) is the second-largest contributor, followed by the United States. BVI, a primary destination for US and China to establish holdings, transits investment through Hong Kong to establish operating companies and invest notably in Hong Kong, China, and the US, avoiding sanctions and facilitating cash flow. How opening a company in Hong Kong can benefit individuals and all types of investors. Singapore is often compared to Hong Kong and sometimes brings more confidence to investors. Hong Kong has been a financial place for decades and has been trusted by investors for decades before Singapore started to be on the list of places to establish companies. Why should investors open a company in Hong Kong? Hong Kong is a great place to invest and open a company for investors looking to operate and have commercial exchanges with China. Hong Kong is probably one of the greatest places in terms of taxation for corporate tax and dividend tax. Tax Optimization Hong Kong has some of the best tax treaties with most of the countries in the world. It is a perfect place for companies looking to have their holding in a place with lower taxation. Hong Kong offers 0% corporate income tax if the income is generated outside of Hong Kong. Compared to Singapore and Dubai, Hong Kong offers the best tax rate for companies operating outside Hong Kong and looking to open a holding company or company operating outside. Furthermore non-residents in Hong Kong offers 0% dividend tax. In other words with a great setup investors can get their funds transited by Hong Kong for 0% tax. The tax rate however involves an audit each year to ensure the income has been generated outside the territory. Considering that Dubai is now taxing at 9% the companies. However Hong Kong seems a better solution for companies looking to have an offshore solution without having to pay tax or making a company in the US, risking class action, or in red flag country. No resident director and no domiciliation needed Compared to Dubai or Singapore, Hong Kong doesn’t require a resident director. While Singapore requests to pay a resident director for your company, Hong Kong allows foreigners to be directors without applying for a visa. Unlike Dubai, Hong Kong doesn’t request investors or directors to stay in the country to obtain dividend tax exemptions. Also Read : How To Register A Holding Company in Indonesia How to open a company in Hong Kong The process of opening a company in Hong Kong is secure, fast and easy. The process can be done remotely without having to go to Hong Kong. The timeline is around one week from the time to collect the document and to apply. Hong Kong’s bank however might take more time to confirm the UBO (Ultimate Beneficiary Owner) to ensure compliance. Other online banking are more flexible. Documents and application To register the company the shareholder needs to provide a few documents, such as passport copy, utility bill, picture and address. Once the documents are approved, the UBO must confirm the application by video to certify that the person is the right applicant. Company name The applicants need to choose a name and Limited will be added at the end of the company. There is no strong restriction on the name, so applicants can choose a name with at least two words to ensure availability. Directors The company needs to appoint at least one director. This director can be a foreigner and doesn’t have to reside in Hong Kong. Application and documentation After the application has been approved, the company will receive the following documentation: Share certificate Certificate of incorporation Business registration certificate Article of Association Appointment of Directors Bank account opening in Hong Kong Once the company is incorporated, the director can open the bank account. The director can go to Hong Kong to open a bank account with a traditional bank or do the process online with an online and fintech bank.
Top 5 Investment Opportunities in 2025 in Bali
Bali, the “Island of the Gods,” has long captivated hearts with its idyllic beaches, vibrant culture, and intoxicating blend of serenity and adventure. But beyond the postcard-perfect scenery lies a dynamic economy brimming with investment potential. Bali Investment Opportunities 2025 highlights a compelling mix of established sectors and emerging trends, making the island an attractive destination for savvy investors looking for both profit and impact. Whether in tourism, hospitality, real estate, or sustainable ventures, Bali continues to evolve as a prime investment hub. Why Invest in Bali as Investment Opportunities in 2025? Bali, however, has demonstrated economic resilience with 5.71% growth in 2023, outperforming the national level of 5.05%. One of the world’s fastest-growing economies, Indonesia is benefiting from a tourism boom that is sometimes transforming the island. Tourism Performance Tourist arrival numbers are smashing records, with 7.75 million international arrivals between January and July 2024 alone. This increase in tourism significantly affects investment opportunities – especially within the property sector! Investment Returns Great Financial Benefits Bali is a great place to invest in. Investors can enjoy rental yields of about 15% of the purchase price, which far exceeds the global average of about 5%. All of these lead to a quick ROI, with many investors recouping their initial costs after just six years. several key factors: 15% Rental yield 20% Year-on-year equity 6+ 0% Investment payback in 6 years 80% Occupancy rates Let’s dive deep into the top 5 investment gems waiting to be unearthed. Top 5 Investment Opportunities in Bali in 2025 1. Tourism Reimagined: Beyond the Beach Blanket Bali’s tourism industry, once synonymous with sunbathing and surf breaks, is undergoing a metamorphosis. While the allure of pristine beaches remains, the discerning traveler of today seeks experiences that resonate deeper. This opens doors for a plethora of exciting investment avenues. Eco-Luxe Lodges Cater to the growing tribe of eco-conscious travelers with boutique eco-lodges nestled in lush rice paddies or hidden amidst pristine coral reefs. Think sustainable architecture, locally sourced materials, and immersive experiences like organic farming workshops and reef conservation initiatives. Wellness & Adventure Hubs Capitalize on the booming wellness and adventure tourism trends by developing holistic retreats that combine yoga and meditation with surfing lessons, nature hikes, and cultural immersions. Offer on-site spa treatments, organic cuisine, and personalized wellness programs for a truly transformative experience. 2. Co-working Paradise: Where Remote Work Meets Tropical Bliss The digital nomad movement has found its utopia in Bali, with entrepreneurs and remote workers flocking to the island for its WiFi-friendly cafes, co-working spaces, and vibrant community. This trend presents a unique investment opportunity for entrepreneurs. Co-living Communities Create co-living spaces that go beyond shared desks and beanbag chairs. Offer stylish apartments, communal kitchens, co-working areas, and networking events. Integrate local experiences like Balinese cooking classes or surfboard shaping workshops to foster meaningful connections and a sense of belonging. Remote Work Hubs in Rural Areas Challenge the congested Canggu-Seminyak norm by developing co-working hubs in charming villages with slower pace of life. Partner with local communities to create sustainable models that benefit both investors and residents. 3. Sustainable Ventures: Investing in the Island’s Future Bali is actively embracing sustainability, making it a fertile ground for investments that align with environmental and social responsibility. Eco-friendly Agriculture Support local farmers by investing in organic farming initiatives, sustainable aquaculture projects, and innovative agroforestry solutions. Collaborate with restaurants and resorts to create a closed-loop system that promotes fresh, local produce and minimizes food waste. Renewable Energy Solutions Partner with local communities to develop solar power microgrids, wind energy projects, and biofuel initiatives. These investments contribute to Bali’s energy independence while offering attractive returns and positive environmental impact. 4. Luxurious Villas: A Slice of Paradise with High Yields The demand for luxurious, private havens in Bali remains robust, particularly for high-end travelers seeking exclusivity and personalized experiences. This sector offers several lucrative avenues. Ultra-Luxury Villas Cater to the discerning clientele with stunning cliffside villas boasting infinity pools, private chefs, and personalized spa services. Think cutting-edge design, eco-conscious architecture, and unparalleled views for an experience that defines opulence. Family-Friendly Villas Tap into the growing market of families seeking luxury escapes with kids. Develop spacious villas with private playgrounds, children’s pools, babysitting services, and kid-friendly activities to create a memorable family vacation experience. 5. Beyond the Beach: Unconventional Property Gems While beachfront properties hold their allure, investors with an adventurous spirit can explore unconventional yet promising avenues. Village Charm Ubud, Bali’s cultural heartland, offers a treasure trove of charming village houses waiting to be transformed into boutique guesthouses or homestays. These properties provide authentic experiences for travelers seeking immersion in Balinese culture, while respecting the local architecture and way of life. Heritage Homes Bali’s rich architectural heritage presents exciting restoration opportunities. Transform traditional “joglo” houses with their distinctive tiered roofs into stunning boutique hotels or luxury vacation rentals. This not only preserves cultural heritage but also caters to the growing demand for authentic experiences. Start your investment journey in Indonesia the right way With so many diverse investment opportunities in Indonesia, you need to make sure you’ve got the right setup to do business here. Get help from our team of experts to register your company, navigate the real estate market, and secure your visa and stay permit. Schedule a free call with us today to plan your next steps with ILA. Beyond the Opportunities: Essential Considerations for Bali Investment While Bali Investment Opportunities 2025 are brimming with potential, navigating the landscape requires careful planning and due diligence. Here are some essential factors to consider: Market Research: Conduct thorough research to understand the specific needs of your target market, competition within your chosen sector, and current market trends. Legal and Regulatory Landscape: Familiarize yourself with Indonesian investment laws, regulations specific to Bali, and any licensing requirements for your chosen business. Seek legal counsel to ensure compliance and avoid potential pitfalls. Sustainability and Ethical Practices: Bali’s commitment to sustainability is well-known. Integrate eco-friendly practices and ethical sourcing into your operations to align with the island’s
How to Import to Indonesia
In the fast-paced world of international trade, Indonesia stands out as a source of economic opportunity. As the largest economy in Southeast Asia, Indonesia offers a diversified market for businesses eager to extend their perspectives. Understanding the complexities of importing to Indonesia is critical for entrepreneurs interested in the archipelago’s business prospects. Extending your business to Indonesia gives intriguing potential. Nonetheless, negotiating the country’s complicated import restrictions and procedures can be difficult. Foreign entrepreneurs seeking to establish a business in Indonesia and import goods must get an import license. Regardless of the size of your shipment, you must apply for this permission before importing products into Indonesia. With the necessary license, your products can pass through customs clearance. As a business owner, it is best to plan ahead of time, particularly when it comes to import license needs. You must also know ahead of time what type of license is appropriate for your firm and how to obtain one. What is an import license? An import license, also referred to as an API (Angka Pengenal Impor) in Indonesia, is a permit that the Ministry of Trade issues to businesses to allow them to import goods into the nation. It is essentially a means for the government to regulate and monitor the flow of imported goods, protect domestic sectors, and ensure certain standards are met. Businesses will now simply need a Business Identification Number (NIB) to begin import or export activity under Regulation 29/2021. NIBs can be obtained through the Online Single Submission (OSS) mechanism. The primary import license in Indonesia is the Importer Identification Number (API). However, depending on the nature of the items you are importing, it may be necessary to get extra licenses or permissions. Here is a list of the different kinds of APIs and any other needs that come with them: API-U (General Importer Identification Number): This license is widely used and permits the importation of finished goods for the purpose of commerce or distribution, and it necessitates the registration of a corporation in Indonesia. The API-P (Producer Importer Identification Number) license is intended for enterprises that import raw materials specifically for their own manufacturing operations. To obtain the necessary permits, one must possess an Industrial Business License (IUI) as well as an Industrial Registered License (TDP). However, before importing or exporting goods, businesses should consult the Indonesian Harmonization System (HS) code, which is used to classify and calculate tax and customs rates on all types of things. The classification is conducted due to the necessity of obtaining additional permits or registrations for certain objects. Additional licenses/permits: Specific licenses from the appropriate ministries are necessary for products like food, chemicals, pharmaceuticals, or used goods. Quota permits: restricted products subject to import quotas require a specific authorization. Product Certifications: Certain products may necessitate safety certifications, halal certificates, or other permissions relevant to the product. Get professional legal advice for Indonesia Indonesia’s legal system is complicated, with its many regulations, licences, and special rules for foreigners. Don’t make the mistake of trying to navigate it alone, and get the help of experienced consultants instead. At ILA, we can help you with intellectual property, corporate law, drafting, reviewing and managing legal documents, navigating commercial transactions and much more. You’re not alone. Reach out today to schedule a free consultation or read more about our legal service. How to Import your goods into Indonesia Businesses ought to review the Indonesian Harmonization System (HS) Code, which is used to classify each product category, prior to importing or exporting. Due to the fact that particular products might necessitate supplementary licenses or registration. In addition, the HS code is a determining factor in the rate of taxes and customs duties, in addition to any product-specific import/export regulations. Here’s the step and preparation that need to be highlighted before importation: Identify your products and determine if they need additional licenses other than import licenses. Engage with a forwarder and provide support with information about the receiver in Indonesia. Make sure the receiver has the appropriate license for your goods. Provides the receiver with as follows: Commercial Invoice (product-specific details) Bill of Lading (ownership during transport) Packing List (contents of each package) Insurance Certificate (cargo protection) Additional certificates (e.g., origin, safety data sheets) based on product requirements. Customs Declaration for Indonesia (PIB): Ensure the veracity of this vital document while collaborating with your importer. Engage with a local costume brokerage that has the license so you can pay the taxes and tariffs. Organize with a local courier to deliver your goods to the end customer or your warehouse. What are the tariffs and taxes importing to Indonesia? When importing items into Indonesia, you will incur two major costs: tariffs and taxes. Here’s the breakdown of each: 1. Tariffs: Tariffs are import levies levied by the Indonesian government based on your items’ Customs Value (cost, insurance, and freight). The tariff rate changes according to your product’s HS code, which determines its classification for customs reasons. You can get the HS code for your product online or from your freight forwarder. Indonesia’s average tariff rate is 8.1%, but it might vary depending on the commodity. Some commodities are tariff-free, while others may be subject to rates of more than 35%. Also read: How to Register Trademark in Indonesia (2025 Guide) 2. Taxes Value Added Tax (VAT): A 11% VAT applies to most imported goods, calculated on the value of the goods plus the import duty. Excise Tax: Certain goods like alcohol, tobacco, and luxury cars are subject to an additional excise tax, on top of the tariff and VAT. Luxury Goods Tax: For imported luxury goods exceeding a certain value, an additional 10% luxury tax might be applied. What are Indonesia’s Import and Export For Restricted Goods? Indonesia has a list of forbidden items for both import and export, which is intended to protect public health, safety, national security, and the environment. Understanding what your goods categorize will ease your import and export process. Here’s a
Step-by-Step Guide to Setting Up a PT PMA for Property Investment in Lombok
Lombok Tengah and especially Kuta Lombok have seen the number of listings multiplied by 3 on AirBnb since 2022. This trend indicates a growing offer on the market while an average occupancy rate stabilizes or is slightly below 2023 during the year. The number of people making investment in Lombok is growing alongside the increasing number of visitors. However, with more properties under construction, planning the investment wisely and choosing the best location, such as between Selong Belanak and Kuta Lombok becomes crucial. Setting up a PT PMA is a prerequisite for any person looking to invest as a foreigner following the agrarian law, as individuals are not allowed to own land in Indonesia. This guide is for foreign investors and developers looking to set up their investments and properly optimise their taxes. Why a PT PMA is Essential for Foreign Investors There are several reasons why a foreigner should invest in a property through a PT PMA. The two main reasons are legality and tax. On the legal side a foreigner non-resident cannot own a land title in Indonesia and by agrarian law a foreigner cannot even lease a property despite some notary accepting it. Land Purchase and Building permit The PT PMA is the simplest way to secure land or property for your investment in Lombok and other Indonesian regions. It enables the acquisition of freehold titles through a sales and purchase agreement (AKTA JUAL BELI; AJB) and grants a right to build, known as HGB (Hak Guna Bangunan). This land title is necessary to obtain a building permit known as PBG under the company name and not be dependent on the land owner or using a nominee in Indonesia. Renting out the property The PT PMA allows the foreigner to obtain the licence to rent out properties under certain conditions and obtain a licence such as Hotel or Apartment Hotel. The licence is called NIB and the PMA can obtain a Sertifikat Standard. Tax payment and efficiency While a foreigner cannot directly obtain a tax identification number, the PT PMA simplifies investment in Lombok by enabling access to a local tax number (NPWPD), a tax identification number (NPWP), and an electronic filing identification number (EFIN). Those tax numbers are necessary to report the tax to the local tax office when the property is rented out or when the company has to withhold the tax on services the PT PMA pays. Flexibility The PT PMA allows different investors to enter an investment by making different classes of shares or selling part of the business without having to resell the property or business. Registering a company in Indonesia has never been easier Setting up a business abroad can be challenging with so many documents, laws and regulations to consider. Luckily, the process will be a breeze, and we’ll give you expert advice on which business structure and setup will fit your needs. Reach out to the ILA team today to set up a free consultation or read more about the company registration process. Key Requirements to Establish a PT PMA Authorized Capital The authorized capital of a PT PMA is equal to 10 billion IDR. A PT PMA needs to have at least 2 shareholders, individuals or companies, and 1 commissioner with at least 1 director. Shareholders and Directors Shareholders can get an investor KITAS if their total shares are worth at least 10 billion IDR. While shareholders may also serve as directors or commissioners, this isn’t mandatory. Consult us or your tax advisor to determine the ideal share percentage and investment approach, as personal or corporate investment in a PT PMA affects dividend withdrawals and tax rates. Business classification A company in Indonesia needs to select one or several business classifications. The business code will vary depending on whether the company operates as developer or focuses on renting out properties for commercial purposes. We advise you to consult us to know more on the set up. However it is important to note that a PT PMA cannot be 100% under foreign investment for any consulting in construction or acting as contractor despite what some PT PMA promote themself as service provider. Step-by-Step Process to Set Up a PT PMA in Lombok Here are the steps to set up a PT PMA in Lombok: Identifying the business code and KBLI related to your activity Define a name of at least 3 words with 3 letters Select a commercial address in Lombok to register (ILA can assist) Deed preparation (AKTA) known as Article of Association Obtention of the Ministry of Law and Human Rights (SK or Ministry Approval) Tax card registration (NPWP) Business licence (NIB) and Sertifiktat Standard Bank account opening Timeline and Costs Setting up a PT PMA for investment in Lombok can be completed within five working days, ensuring a swift process to establish your business presence. The cost varies from the address selected to the business licence if a certificate standard is necessary to be approved, such as Hotel, or Broker. Steps to buy a property in Lombok with a PT PMA Once the PT PMA is set the process to purchase a freehold property is as follows: Select the land and make an offer (do not pay without making the offer and do not pay the seller directly) Conduct due diligence on the land and property Check all authorization and building permit (PBG) Sign a lease agreement or a PJB and AJB Pay the notary and the related tax Process with the changes of the land certificate Also Read : How To Establish A PT PMA In Bali FAQs Can I own land directly through a PT PMA? Yes it is possible to own land under a PT PMA. They will convert the land title into HGB, lasting 30 + 20 + 30 years. Then, you can convert the land title to SHM anytime to resell it as a freehold. How long does the setup process take? The process takes 5 days What taxes apply to PT
How to Open a Spa in Bali and Lombok
People all over the world love Bali and Lombok as places to relax and recharge. Counted for beautiful beaches, natural surroundings, and rich cultural legacy, these islands draw millions of visitors looking for an escape from their hectic lives. Beyond being popular tourist destinations, they are ideal locations for a thriving spa business in Bali, thanks to their world-class treatments and leisure activities. Opening a SPA in Lombok or Bali presents both profitable business opportunities and the chance to offer transforming experiences, regardless of what draws people to the calm beauty of either island or the active tourism centers. Here are some basic ideas and insights if you are thinking about starting an SPA in Bali or Lombok, including how ILA Global Consulting may help you at every level. Why Bali and Lombok? With millions of people yearly looking for luxury and refreshment, Bali’s and Lombok’s tourist business is explosive. Supported by yoga retreats, lavish resorts, and traditional Balinese and Sasak healing methods, the island’s wellness reputation has produced an abundant market for spa treatments. Starting a spa in Bali here lets you reach an audience of residents who value leisure and self-care as well as health-conscious visitors; even the market grabs not only an international tourist but also a domestic tourist. Registering a Company In Indonesia has never been easier Setting up a business abroad can be challenging with so many documents, laws and regulations to consider. Luckily, the process will be a breeze, and we’ll give you expert advice on which business structure and setup will fit your needs. Reach out to the ILA team today to set up a free consultation or read more about the company registration process. Understanding the Culture The cultural and natural history of Bali and Lombok greatly impacts the spa services. The foundation of a spa business in Bali lies in offering authentic local experiences, such as traditional Balinese massages, Sasak massages, herbal treatments, and aromatherapy. Tourists and locals alike value authenticity, so using Balinese techniques and natural elements like volcanic clay, coconut oil, and herbs will make your spa unique. This timeless healing practice blends acupressure with fragrant oils and traditional methods, creating a unique and rejuvenating experience for clients. Many individuals so like receiving Balinese massages at spas nowadays. Integrating the distinct wellness traditions of both islands into your offerings can help your spa stand out. Choose the Right Location The success of your spa largely depends on its location. Look for serene settings ideal for relaxation or bustling tourist hotspots. Bali offers vibrant hubs such as Seminyak, Ubud, Uluwatu, and Canggu, while spa in Lombok options thrive in peaceful areas like the Gili Islands and Kuta Lombok. Choosing the right location will significantly influence your client base and the overall ambiance of your business. Ubud is famous for the landscape and retreat, Seminyak for high-end spas, and Canggu for young people that have a healthy consciousness. The Gili Islands and Kuta Lombok offer spa businesses unique benefits. Kuta Lombok attracts tourists with its pristine beaches, rising bohemian attitude, and real culture, while the Gilis are popular with eco-friendly, tranquil, and marine-inspired relaxers. Register your Business After choosing the right location, now it’s time to start a business. In Indonesia, which requires compliance with several regulations. Here’s a breakdown of the key legal aspects: Establishing a Foreign Investment Company (PT PMA) is necessary for foreign investors; SPA activity is open 100% for foreign ownership. This PT PMA can be open with just two shareholders. While the SPA is owned by a foreign investor, you might also consider having a local partner to be your general manager that can help with day-to-day business operations. However, if you are planning to hire a foreigner as your staff, make sure they get the working permit (ITAS) as well. You must obtain licenses and permits to operate after establishing the company. You will need a SPA license, which is known as Standard Certifikat (Sertifikat Standar). In addition to this, you also need an environmental license, and to elevate your business to the top, the Ministry of Tourism must certify your SPA. SPA is also considered a wellness centre that allows you to do water therapy (hydrotherapy), aromatherapy, massage therapy, herbal therapy, foot spa, hand spa, hair and scalp spa, facial spa using machine or tools, heat therapy (thermal therapy), and physical or breathing exercises. Also read : How To Start A Business In Bali – 7 Best Business Opportunities In Bali Everything Else that You Should Do After you have decided on the location and the structure of your firm, there are further things that you need to complete. Securing your location by having a proper contract, either you lease or buy the place. Hiring staff: other than hiring staff, you need to also secure the contract to be compliant with the labour law to ensure a smooth process. Designing your SPA Marketing your SPA Starting a spa in Bali and Lombok is an exciting opportunity to create a wellness sanctuary in two of Indonesia’s most captivating destinations. Success starts with thoughtful planning, whether you’re drawn to the tranquility of the Gili Islands, Kuta Lombok’s surf vibe, or Bali’s rich traditions. In order to focus on your business, you can reach out to ILA for a consultation, starting with securing your location, getting your business registered and obtaining all the necessary licenses.
Learn how to become a contractor in Bali and Lombok
In Bali and Lombok, tourism businesses claim fame. Property developments are in progress. Hotels, resorts, and villas can be found in every corner of the city; small or large projects are tempting to build. This has sparked interest in becoming a contractor in Bali, but many are unaware of the strict regulations and requirements within the construction industry. The specific guide will provide the main steps and peculiarities of working in these culturally and economically lively regions. Construction Market Overview The construction sector in Bali and Lombok is not just growing—it’s thriving! Despite the highly regulated nature of the construction industry, it remains one of the most promising business opportunities. Scaling from small to big industries, private or government projects, both are as much as interested to do. Start your investment journey in Indonesia the right way With so many diverse investment opportunities in Indonesia, you need to make sure you’ve got the right setup to do business here. Get help from our team of experts to register your company, navigate the real estate market and secure your visa and stay permit. Schedule a free call with us today to plan your next steps with ILA. Types of construction services. Building a resort, hotel, or even a small house requires preparation. We start by making a drawing, managing the budget, and lastly, building. This process type, known as construction, can be classified into several categories: Construction Consultation Services Construction Work Service Integrated work between construction, consultation, and work service Construction Consultation Services Companies that involve tasks such as drafting, project management, engineering, landscape design, assessment, and planning will be considered as consultants for construction companies. There is also a special consultancy that provides scientific and technical analysis. Construction Work Service This type of construction involves a combination of construction, maintenance, demolition, and reconstruction processes. Essentially, once the planning phase is completed, the construction phase begins. The contractor must align the construction with the consultants’ planned building. Integrated Construction An integrated refers to a company that performs both building and civil construction tasks, including design, engineering, and procurement, all under one roof. Many foreign companies choose this classification when they are involved in government projects. Becoming a successful contractor in Bali and Lombok requires not only expertise but also a clear understanding of the legal and cultural nuances of the local construction market. Whether you’re interested in private ventures or government collaborations, knowing the industry’s complexities is key to thriving in this competitive field. Also read: Guide to Check Company Profile Information in Indonesia Steps to Becoming a Contractor in Bali and Lombok Navigating Indonesia’s complex legal system is a key step for those looking to work as a contractor in Bali or Lombok. As a foreigner or foreign company, you cannot just simply become a contractor; you have to structure your business. Once you have understood the concept of type of construction, here are the steps you need to take. 1. Form a Foreign Construction Business Entity Construction services can be provided by an individual or a corporation. For foreign construction service providers, however, there are various restrictions on starting their firm. A foreign company offering building services that can only conduct business in Indonesia has options such as the following: BUJKA (Badan Usaha Jasa Kontruksi Asing) solely offers high-risk, high-tech, high-cost market segments, starting with consultations (engineering/design) and/or monitoring and supervision services and restricted construction services. An Indonesian national or foreigner with a proper work permit (KITAS) and the necessary certificates can lead BUJKA. BUJKA also has to coordinate a combined effort with accredited national business associations. The benefit of setting BUJKA is that you do not need to inject paid-up capital, and this can be a beneficial strategy for participating in government projects. PT PMA: Foreign Investment Company. PT PMA is limited to classification B (BIG), either for planning, major corporations, or project implementers with project values greater than 100 billion. Forming the company as a Limited Liability Company (PT), it must have a maximum foreign share ownership of 67% for non-ASEAN nations and 70% from ASEAN countries. You have to find a local partner to hold the 30%, and the local partner must have a B classification as well. 2. Getting the Right Licenses The Regulation of the Minister of Public Works and Public Housing No. 8 of 2022 outlines the procedures for fulfilling standard certificates in the construction services sector, aiming to facilitate business licensing for construction service entrepreneurs. Below is a detailed breakdown of the licenses required for Badan Usaha Jasa Konstruksi Asing (BUJKA) and Perseroan Terbatas Penanaman Modal Asing (PT PMA) as stipulated in this regulation. Badan Usaha Jasa Konstruksi Asing (BUJKA). To legally conduct business, BUJKA must establish a representative office known as Kantor Perwakilan Badan Usaha Jasa Konstruksi Asing (KP BUJKA). The licensing requirements include: Establishment of Kantor Perwakilan BUJKA: Foreign construction companies must set up a representative office in Indonesia to oversee their operations. Obtainment of Business Identification Number (NIB): Through the Online Single Submission (OSS) system, BUJKA must acquire an NIB, which serves as a unified business identity. Getting the Construction Service Business License (IUJK) wallow let BUto JKA provide Indonesian construction services. Possession of a Standard Certificate: BUJKA is obliged to have a Standard Certificate comprising: Sertifikat Badan Usaha (SBU) is a certificate attesting to the classification and qualification of the corporate body in building services. Please note that SBU will be a with the ed with the sub-classification that will be performed by the BUJKA. Sertifikat Kompetensi Kerja (SKK): Certificates for personnel, ensuring that key staff meet Indonesian competency standards. The certifneedse nebe signedo have by someone you will hire in the BUJKA. Membership in a Construction Association (KTA): BUJKA must register with a recognised construction association in Indonesia, such as the Gabungan Pelaksana Konstruksi Nasional Indonesia (GAPENSI) or other relevant associations. Membership ensures adherence to professional and ethical standards in the construction industry. PT PMA (Penanaman Modal Asing) For foreign investors aiming to establish a construction
How To Start A Business In Bali – 7 Best Business Opportunities In Bali
Bali is on the top destinations for tourism and now appears to be on the top destination with a lot of business opportunities for those who want to become entrepreneurs. The new president, Prabowo, wishes to make Bali a destination similar to Hong Kong and Singapore regarding business development. Why Start a Business in Bali? Influence from all over the world Bali, famous for its surf spot, ricefield, rich culture, and vibrant nightlife, is attracting entrepreneurs and investors worldwide. After being a tourist place for decades, Bali now welcomes expats who want to relocate for the long term. Like Dubai, Bali has seen waves of foreigners running away from their country looking for new opportunities. With all nationalities represented in Bali, expats learn from each other, and find a place to develop and confront ideas. Bali expats and local entrepreneurs are germing business ideas. Low Taxation on companies Indonesia offers business opportunities in Bali with its low corporate tax rate. With only 0.5% income tax, new companies can grow without being pressured by high taxes, allowing entrepreneurs to focus on their business ideas. While not a fiscal paradise, Bali provides more tax advantages than even Dubai in some ways. Dividends in Indonesia are taxed at just 10% and can be exempt from tax if the profit is reinvested for 3 years. Strong local economy Being in Bali is being in Indonesia. This country of 280 million people is one the biggest economies in Southeast Asia and plans to be in the top 5 in the world in the next decades. By having a business in Indonesia, you can open a local market of 280 million people to test your business and open your gate to SEA. A lot of investors from property investment to marketing are realising that targeting locals can bring more return than targeting only expats. For example, having a property in Seminyak may have a higher occupancy rate if you also target people from Jakarta. Registering a company in Indonesia has never been easier Setting up a business abroad can be challenging, as there are so many documents, laws, and regulations to consider. Luckily, the process will be a breeze, and we’ll give you expert advice on which business structure and setup will fit your needs. Reach out to the ILA team today to set up a free consultation or read more about the company registration process. Key Steps to Unlock Business Opportunities in Bali Legal Structure and Registration The first step to taking advantage of business opportunities in Bali is to register a company called PT PMA. This type of company can be open to 100% foreign investment depending on the business sector. Unfortunately, not all business activities are open at 100% despite most of them having been open in 2021. We recommend consulting in order to determine if the business sector is eligible for foreigners or if a local partner is necessary. For example, some businesses require 33% local participation or even 51% such as: Architect 33% (32% – if the other shareholders are from ASEAN) Construction 33% (32% – if the other shareholders are from ASEAN) Boat ownership 51% The process to register a PT PMA in Bali takes 5 business days. A company requires 2 shareholders minimum. There are several types of companies in Indonesia but those structures are not open to foreigners. Permits and Licensing Having a company open doesn’t necessarily mean you can operate straight away. Indeed, some activities require validation in order to get a Sertifikat Standard. The activities below require validation from a specific ministry after the business has provided some additional information. Scuba diving Recruitment Real Estate as Broker Clinic Maritime affairs require a SUIPSUS or SIUPAL. For property developers, additional licences such as UKL UPL or AMDAL can be required for PMA in order to build hotels or apartment hotels. Also read: PSE License in Indonesia: Essential Steps for Online Businesses Local Partnerships and Networking Having a local partner is crucial in some activities. For anyone starting a business in medical tourism, it is important to start by finding doctors in order to validate the licence and navigate through the medical industry in Indonesia. One of the keys to your success in Bali will also be to network with the right environment, depending on your business sector. For example, for somebody looking to develop a surf camp business, having some connections in Uluwatu might be a good place to start to understand the business sector and actors. Hiring Staff and Employment Regulations The success of a business is also the success of a team. For a newcomer to Bali, it might be difficult to understand the employment law in Indonesia, the possibility of hiring foreigners or locals. PT PMA are not restricted to hiring local people but there are some ratios and restrictions on hiring foreigners for some jobs. A ratio of 1 foreigner to 5 locals is required in order to be able to get an IMTA (working permit). A foreigner who wishes to work in Indonesia can only work for the company sponsoring the foreigner. Indonesia gives 2 types of contract and companies can hire locals with a fixed term contract or offer a permanent contract (PKWT and PKWTT) while companies can hire foreigners only under a fixed term contract. Indonesian regulation is very protective for employees under contract, and it is difficult to fire employees who underperform. On the other hand the number of holidays for a worker in Indonesia is set at 12 days minimum (there are a large number of public holidays). Tax and compliance When you start a business in Indonesia, a company has a few obligations. Some are required monthly, quarterly and annually. Monthly obligations for a company include tax on salary, social security, local tax (restaurant, Airbnb), withholding tax and tax on income. Each quarter companies also need to report their investment in OSS to comply with the LKPM report. This report includes the number of employees and