Company & business registration in Indonesia.

For locals: Local limited liability company (Local PT).

For foreigners: Foreign investment limited liability company (PT PMA).

Limited liability companies (PT) are the most common business structure in Indonesia because of the clarity of their status as legal entities and their flexibility. There is also clarity in terms of the division of tasks and authority among the organs of PT. In PT, shareholders also have limited liability to the amount of their investment, and therefore their personal assets are protected. Foreign investors usually choose PMA business structure because Indonesia allows a 100% foreign ownership in industries which are not protected by the Negative Investment List.

Yes, foreigners can own a business in Indonesia by setting up a foreign investment limited liability company (PT PMA) which any quantity of shares owned by a foreign individual or business. It is a legal entity which foreign investors are permitted to conduct commercial activities in Indonesia. A PT PMA can be either 100% foreign-owned or partially foreign-owned. There are some sectors causing some industries to be partially open or closed to foreign investment.

The restrictions in terms of foreign investment is stated in the Negative Investment List (Daftar Negatif Investasi). If the sector is partially closed to foreign investment, the list will specify the maximum percentage of foreign ownership is allowed. This requires the foreigners to have an Indonesian citizen/entity as partner to engage in that sector.

Foreigners can open a bank account in Indonesia as long as they have a Temporary Residence Permit Card (KITAS) and personal Indonesian Tax ID (NPWP). Most banks usually require an identity card as one of the supporting documents, and therefore foreigners are required to submit KITAS, a temporary residence permit card and NPWP.

Other than KITAS and NPWP, most banks usually require foreigners to also submit their passport, letter from employer or permanent residence license, and in some cases, foreigners may also need to submit an existing debit or credit card, residency contact, domicile letter, bank document from country of origin, and the spouse’s government-issued ID, depending on the internal policy of the bank.

For foreigners who have established a PMA in Indonesia, they can open a bank account by submitting the company’s legal documents.

Based on Capital Investment Coordinating Board, Indonesia is known as one of the countries with the strongest economy in Southeast Asia. The country even ranks in the 16th place for the largest economy in the world. In the past ten years, Indonesia has experienced a steady growth of 5.8% GDP.

Indonesia is expected to have the higher rate of consumers in 2030 due to fast growing of the middle class. Middle class in Indonesia could be the consumer class. Of course, it would be the valuable target for those who want to create the business since the consumer class is increased year by year.

Further, Indonesia’s business-friendly policies have made it easier for foreign companies to start their businesses in the country and will surely be better than what it used to be.

Yes, shareholder’s liability is limited to the value of their investment within the PMA company unless certain legal requirements are not met. Shareholders’ personal assets are protected as their liability is limited to the amount of their investment.

Yes, shareholders can hold shares with certain preferential rights. The Indonesian Company Law recognises classifications of shares, e.g., shares with the right to nominate members of the Board of Directors/Commissioners, shares with priority rights to receive dividends or liquidation proceeds.