Based on HKTDC Research in 2017, Indonesia considered as the fourth largest consumer market. Still, from HKTDC, the country also has around 6% annual economic growth which has a good impact on the demand for goods and service. Therefore, building the companies in Indonesia might be something profitable, both for the native and foreign investor.
If you are in the foreign investor side, you might have to really pay attention to several steps on how to register your company in Indonesia. Based on the Negative Investment List 2016, some sectors have been opened for the foreign investor.
The Investment Coordinating Board in Indonesia also has provided the One-Stop Service Center to make the registration easier and integrated. But, you have to pay attention to the steps below so that you won’t find any obstacle when you register your company in Indonesia:
Understanding the meaning of foreign company and the DNI (Negative Investment List)
In Indonesia, the definition of a foreign company is quite wide. Even though there is only 1% of a foreign shareholder in a company, that company can be considered as the foreign company (PT PMA/limited liability company with foreign direct investment).
But before you take your time and also money to register the company, make sure that your company doesn’t run any business in the restricted industries. Which industries are restricted in Indonesia? You can check the recent Negative Investment List from BKPM.
Setting up the investment Plan and Paid-Up Capital
For the foreign company, BKPM requires minimum IDR 10 billion investment plan of each business applying. The buildings and land are not included in this plan.
After that, you must provide the paid-up capital. The minimum paid-up capital for a foreign company in Indonesia is about IDR 2.5 billion. To prove your paid-up capital, you can sign the capital statement letter to declare that the shareholders have enough fund for the company.
The incorporation process
The process involves the investment application and also the principle license issuance. The incorporation process is obligated so that the BKPM understands your company classification and the structure inside it. For some industry, there must be a presentation in front of the BKPM before the board releases the principal license. The incorporation process itself takes about 6-8 weeks.
Permanent business license
After you have done with the incorporation, now you can move to the next step: permanent business license process. You will give the time for about 1-3 years after the incorporating process. However, this step needs to be done immediately if you have some business types, such as a construction plant. After you have had the permanent business license, you will be more flexible in running your business in Indonesia.
Having the operational licenses
The permanent business license, however, is not enough for several business types like construction and importing business. Those types of business require the additional license from several ministries, like the operational licenses. The time that took up for doing this depends on what kind of business you register and the ministries you deal up with.
Actually, if you really understand the steps and pay attention to the investment rules updates, you will find that actually it is not that complicated to register your company in Indonesia. And if you still hesitate to do it alone, you can hire the trusted agent that can help you do the registration.