It is nothing new that foreign investors would like to open companies in Indonesia. The business potential is huge, and the latest regulations have been friendlier with foreign investors. Of course, this can work out if you, as the foreign investor, know how to register your company in Indonesia. Company registration in Indonesia is very important and a start.
So, how do you register your foreign company in Indonesia? There are two (2) types of company registration in Indonesia. Before that, here are two (2) business entities that are in Indonesia:
PT PMA (Perseroan Terbatas Perusahaan Modal Asing or Foreign Direct Company)
This type of company has been mostly suggested by many to foreign investors. There are five (5) benefits if you choose to register your company in Indonesia with this format:
- You can start and make your company more official. Even as a foreign investor, you earn the same rights and responsibilities as many as local ones or companies.
- Your company is allowed to join all the tenders created in Indonesia.
- Your company can apply a business license and product registration. This will help your company to gain better conditions when you import goods.
- You can apply for a KITAS and a work or business visa for foreigners.
- Your foreign clients and visitors can also get their business visas. Of course, their business visas can only be from a foreign company under the format of PT PMA.
The Representative Office
The Representative Office has one or more foreign citizens and Indonesian citizens leading it. They are appointed by their representatives, which could be a foreign company or joint foreign companies. Their two intentions include:
- To handle the company and its affiliates concerns
- To prepare FDI (foreign direct investment) companies’ establishment and development, whether in Indonesia or other countries and Indonesia altogether.
The advantages of registering your company in the format of a representative office are:
- Setting up your company in Indonesia is easier and relatively quick.
- You do not need some large investment or paid up capital.
- You will not be hassled by too much paperwork. In fact, all you need is income tax reports for your employees and (rented) office space.
Unfortunately, with The Representative Office, you do not have the luxury to generate revenues, profit, or directly engage in sales.
So, those are the two (2) types of company registration in Indonesia. Actually, there is also another one, but this is not as reliable as the previous two:
PT (Perseroan Terbatas or Limited Liability Company)
This format is mostly intended for Indonesians only, which is why you may not be suggested to register your company this way. However, there are certain or special situations where foreign investors can be involved in this type of company.
In fact, depending on the investors, sometimes a PT can be changed into a PT PMA.
Despite this possibility, many would possibly suggest that you choose one of the two (2) types of company registration in Indonesia above. That way, you will have an easier start to run your business in Indonesia.