Registering a PT PMA company in Indonesia can be complex or confusing without any help. Some business activities (KBLI) are open to 100% investment, and others require local partnership or are close to foreigners. Wherever you want to register a company in Jakarta, Bali, or Lombok, here is your ultimate guide for Indonesia. The establishment of a company in Indonesia (PT PMA) has to follow different steps.
Pre Registration
Before starting the registration process, the applicants need to define the following.
Company Name
The Indonesian ministry requires the name of the company to be written in three words. The name is applied to the Directorate General of Legal Administration Affairs. The words can be in English and the company name has to be unique with no other company using this name. A locally owned company cannot use English words to register its name.
The company name is not a brand name and the trademark of the logo or company name has to be registered separately.
- Some words, such as OF, are not eligible.
- Combinations of symbols, letters and numbers are not eligible for registration.
- Terms that are against the Indonesian government, religion or morality are not allowed.
- Has to be in line with the business activity or not misleading
- Cannot represent a government institution
To register a company in Indonesia, it is essential to adhere to these naming conventions to ensure compliance with legal requirements.
Company shareholders and board of directors
To register a company in Indonesia, the company needs at least 1 director and 1 commissioner. The director of the company is in charge of conducting policy and ensuring its management. The shareholders have to reappoint the director every 5 years.
Commissioner
The commissioner of the company supervises the director and reports to the shareholders. The commissioner can suspend the director at any time if the director is conducting activities that are not in accordance with the interests of the company. The main role of the commissioner is:
- Oversight and Supervision
- Advisory Role to the board of directors
- Annual report approval
- Compliance with the Indonesian law
Director
The role of the director is to conduct the company’s policy in accordance with the objectives defined in the status of the company. The director is responsible for preparing the financial statements and ensuring the company is complying with all the company law obligations.
Shareholders
The director is the one who can open the bank account. The shareholders of a PT PMA can be:
- Another legal entity (Indonesian or oversea)
- A foreigner
- A local person
It is crucial to analyse and define an optimal structure for the company. Indeed the structure impacts the tax structure and dividend and the capital injection into the PT PMA. We recommend discussing this with a professional before defining the shareholder’s structure to ensure a smooth process when you register a company in Indonesia.
Capital Requirement of a PT PMA
The capital requirements of a PT PMA vary from one activity to another depending on the classification of the company. Some sectors, such as the cryptocurrency or the construction, may require higher capital. The minimum capital to declare is 10 Billion IDR.
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.
Registration of a PT PMA in Indonesia
After defining the name, board of directors and optimal structure of the company, the registration process takes 3 days to 2 weeks for activities requiring no additional approval.
The registration can be done with a representative or in person. The deed of establishment of the PT PMA has to be notarised.
Articles of Association (AKTA)
The articles of association are governed by the corporate law and terms are standardised. The AKTA cannot remove rights to other shareholders to get financial dividends. The AKTA can, however, define a class of shares to limit some voting rights or influence in the company.
- Shareholders name and class of shares
- Rights attached to each share and the nominal value of each share
- Amount of authorised capital, issued capital and paid-up capital and the amount
- Company’s name and location
- Business activity
- Board of Directors and commissioners
- Methods and locations to hold shareholder meetings
- Procedures for using and distributing the company’s profit and dividends
- Period of incorporation of the company (5 years)
The Ministry of Law and Human Rights issues the ministry approval (Sk) after the registration of the deed of establishment.
Also read: How to Structure a Holding Company in Bali and Indonesia
Domiciliation
It is mandatory to use the Online Single Submission (OSS) system to administrate the formalities of the company. While companies previously needed to issue a domicile letter, the new procedure involves registering the company through this web portal. The OSS system streamlines the registration process, enhancing corporate compliance in Indonesia.
A company needs to have a domiciliation. The company needs an address and a commercial building permit. In other words, the company cannot register a villa or other building as an address with no legal documents.
Tax identification – NPWP
To register a company in Indonesia, each company must be registered online on the tax authority website (Kantor Pajak). The company needs to register the tax number (NPWP) before the company’s business identification number.
- Create an account using the email address you used for OSS.
- Fill in the registration form.
- Upload the documents through the registration application
- The tax office issues the taxpayer identification card and tax registration certificate one day after the issuance of the receipt. The tax office sends the card to the company address.
Business registration number – NIB
The nomor identification business (13 digits) is available through OSS after the registration process.
The NIB defines the scope of activity or business line of the company. The company can have several business codes (KBLI) appearing on the NIB. However, the company needs to indicate the classification in the Akta.
It is necessary to amend the company’s deed to add a new business activity.
Some business classification needs additional verification or inspection on site of the business before getting a final approval depending on the risk level. Activities classified as high risk will need the issuance of a Sertifikat Standard.
Indonesia has hundreds of KBLI, and a violation of the scope of the KBLI can lead to fines or cessation of the business. We recommend consulting us before approving the KBLI indicated on your deed.
