How to set up a PT company in Indonesia? [Updated 2024]

Indonesia's vibrant market beckons entrepreneurs worldwide, fueling a surge in demand for establishing PT companies in this dynamic economy. In this article, we will learn how to set up a PT company in Indonesia, equipping entrepreneurs with the knowledge and confidence to embark on their business journey successfully.

Types of companies in Indonesia

If you want to open a company in Indonesia, you'll need to decide on the type of business entity you want to establish. Here are the common business entities in Indonesia:

• Perseroan Terbatas (PT): Limited liability company, can be local PT or foreign-owned PT PMA. PT is divided into shares and protects shareholders' assets.
• Private-owned enterprises (BUMs): Includes Firma/Firm (FA), Commanditaire Vennootschap (CV), and limited company (PT). BUMs do not distinguish between personal and company assets.
• Sole proprietorship (UD): The simplest form, requires only one owner.
• Representative Office: For foreign companies exploring the Indonesian market.
• Subsidiary company: A subsidiary of a parent company, can be established as a foreign-owned company.

A PT (Perseroan Terbatas) enterprise is a type of limited liability company in Indonesia

Types of PT companies

To know how to set up a PT company in Indonesia, you have to understand the types of Perseroan Terbatas (PT) companies. In Indonesia, there are several types of Perseroan Terbatas (PTs), each with its characteristics.

Opened PT

An Opened PT is a type of Limited Liability Company (LLC) in Indonesia that offers shares to the public. It allows ownership shares to be purchased by most investors. Shares in an Opened PT can be freely bought and sold, and this type of PT may list its shares on the stock exchange, providing liquidity to shareholders.

Closed PT

A Closed PT is an LLC that offers only private shares and restricts the sale of those shares to specific individuals or groups. This type of PT is commonly found among family-owned and operated companies, where ownership and control are closely held within a select group of individuals or entities.

Domestic PT

A Domestic PT is an LLC that physically exists and operates within Indonesia. It offers its goods or services in the Indonesian market and must strictly comply with rules and regulations governing businesses in the Republic of Indonesia. Domestic PTs are subject to Indonesian laws and regulations.

PT Individual

A PT Individual is an LLC with shares issued to and owned by only one person. This person, typically the owner or director of the company, has sole authority and responsibility within this type of business structure. A PT Individual is suitable for entrepreneurs who wish to establish a business on their own.

Foreign PT

A Foreign PT is an LLC that is incorporated in a foreign country but operates in Indonesia. When establishing a Foreign PT in Indonesia, the business is subject to Indonesian laws and regulations. This type of PT allows foreign companies to conduct business and invest in Indonesia while adhering to local legal requirements.

Public PT

A Public PT is an LLC with a free-share ownership system, allowing any entity to own shares. Similar to an Opened PT, shares of a Public PT can be freely traded on the stock exchange, providing liquidity and investment opportunities to a wide range of investors. Public PTs are subject to additional regulatory requirements and disclosure obligations compared to other types of PTs.

There are six types of PT companies in Indonesia

Characteristics of PT companies

In Indonesia, Perseroan Terbatas (PT) is a common choice for business ventures. Understanding the characteristics of PT is essential for entrepreneurs searching for how to set up a PT company in Indonesia.

Business lines and capital requirements

Local companies in Indonesia are versatile entities that can engage in various business lines, ranging from trading and manufacturing to services and consulting. The capital requirements for PTs vary depending on the size of the company.

Small-size PT companies: Above IDR 50.000.000 – 500.000.000

Medium-size PT companies: Above IDR 500.000.000 – 10.000.000.000

Large-size PT companies: Above IDR 10.000.000.000

It's important to highlight that if a PT intends to employ foreigners, specific regulations apply regarding the company size and paid-in capital. According to Indonesian law, a PT must be categorized as at least a medium-sized company, with a minimum paid-in capital exceeding IDR 1,100,000,000, to be eligible to hire foreign employees.

Shareholder, director, and commissioner requirements

To establish a PT company in Indonesia, specific requirements regarding shareholders, directors, and commissioners must be fulfilled.

Shareholders: Minimum two, can be individuals or legal entities, providing identification documents and tax numbers.

Directors: At least one local director, responsible for daily operations, with valid identification and tax numbers.

Commissioners: At least one, overseeing activities, also requiring valid identification and tax numbers.<

Registration and establishment time

The entire process of how to set up a PT company in Indonesia typically takes approximately 2-6 months, depending on factors such as the complexity of your business structure, completeness of documentation, and efficiency of the registration process. Seeking assistance from experienced payroll advisors like Aniday can facilitate efficient staffing solutions for companies within or outside Indonesia, ensuring compliance with local regulations. On the other hand, Headhunter Agencies can help save time for new business owners setting up PT companies in Indonesia through recruitment services and connecting with quality talents.

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Requirements for shareholders, directors, and commissioners are necessary how to set up a PT company in Indonesia

Benefits of establishing a PT company in Indonesia

Establishing a PT company in Indonesia offers a myriad of advantages, ranging from favorable tax incentives to a strategic geographic location. The benefits of setting up a PT company in this vibrant Southeast Asian nation include:

Legal separation: A PT is a distinct legal entity from its shareholders, allowing the company to independently enter contracts, acquire assets, and handle legal matters, separate from its owners.

Investor attraction: Registering a PT boosts credibility and attracts investors who favor entities offering liability protection and clear governance structures.

Market reach: Registering as a PT grants access to Indonesia's extensive market, showcasing compliance with local regulations and fostering trust with customers, suppliers, and partners.

Continuity: A PT's perpetual existence guarantees stability and continuity, unaffected by ownership changes or shareholder transitions, supporting long-term business operations and succession plans.

Workforce expansion: As a registered PT, you can legally recruit employees in Indonesia, facilitating workforce growth and operational scalability.

Funding opportunities: Registering a PT unlocks diverse funding avenues, including bank loans, investment attraction, and stock or bond issuance for business expansion and growth.

Professional image boost: Registering as a PT enhances credibility and fosters trust with customers and partners, showcasing a formal commitment to compliance with Indonesian laws.

Establishing a PT company in Indonesia offers numerous advantages

Documents required to establish a PT company in Indonesia

When setting up a PT company in Indonesia, essential documents are required to navigate legal requirements and formalize operations. These include:

• Shareholders: A minimum of 2 shareholders.
• Shareholder information:
  • For Indonesian individuals: National ID (KTP) and taxpayer identification number (NPWP).
  • For Indonesian companies: Certified Articles of Association, approvals from the Ministry of Law and Human Rights, proof of address, tax identification number, business license, and company registration certificate (TDP/NIB).
• Director and commissioner information:
  • For Indonesian individuals: National ID, taxpayer identification number, email, and phone number.
  • For foreign individuals: Valid passport, email, and phone number.
• Original proof of residence from building management.
• Lease agreement copy between the company and the building management.

Businesses must prepare essential legal documents to establish a company in Indonesia

Minimum capital required to register a PT company

In Indonesia, companies can be established on three different scales, each requiring varying levels of investment or capital contribution:

Small: Investment between 50,000,000 IDR and 500,000,000 IDR.

Medium: Investment between 500,000,000 IDR and 10,000,000,000 IDR.

Large: Investment exceeding 10,000,000,000 IDR.

Note: To hire foreign nationals in a PT company, the company must be at least of medium scale with a capital exceeding 1,100,000,000 IDR.

How to set up a PT company in Indonesia?

The process of how to set up a PT company in Indonesia can be complex and requires adherence to specific legal regulations. Seeking assistance from experienced legal experts or consultants is crucial. Here is how to set up a PT company in Indonesia.

Step 1: Choose the right business structure

• Conduct thorough research on available business structures in Indonesia, such as PT (Perseroan Terbatas), CV (Commanditaire Vennootschap), or PT PMA (Penanaman Modal Asing).
• Evaluate the legal, financial, and operational implications of each structure.
• Consult with legal advisors or business consultants to determine the most suitable structure based on your business goals, ownership, and liability considerations.

Step 2: Ensure compliance with requirements

• Familiarize yourself with the specific requirements and regulations for company registration in Indonesia.
• Check the eligibility criteria, including capital requirements, shareholder qualifications, and business activities permitted for foreign investors.
• Ensure that your business activities comply with Indonesia's Negative Investment List (DNI), which outlines sectors closed or restricted to foreign investment.

Step 3: Reserve and register your company name

• Choose a unique and legally permissible name for your company.
• Conduct a name availability search through the Ministry of Law and Human Rights (Kementerian Hukum dan Hak Asasi Manusia - Kemenkumham) or online portals.
• Reserve the chosen name by applying with the Directorate General of Intellectual Property (Direktorat Jenderal Kekayaan Intelektual - DJKI).
• Once approved, register the company name with the Ministry of Law and Human Rights (Kemenkumham) or a notary public.

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Step 4: Prepare the necessary documents

You need to compile all required documents for company registration, including:

• Articles of Association (Akta Pendirian Perusahaan)
• Shareholders' and directors' identification documents (passport copies or identity cards)
• Proof of registered office address
• Capital verification report (Laporan Verifikasi Modal)
• Letter of a statement of willingness to be the director or commissioner (Surat Pernyataan Kesanggupan Menjadi Direksi atau Komisaris)

Therefore, you also need to ensure that all documents are accurate, complete, and compliant with Indonesian legal standards.

Step 5: Apply for a Deed of Establishment and Certificate of Domicile

• Engage a notary public to draft the Deed of Establishment (Akta Pendirian) for your company.
• Submit the Deed of Establishment to the Ministry of Law and Human Rights (Kemenkumham) for approval and registration.
• Apply for a Certificate of Domicile (Surat Keterangan Domisili) from the local government office where your company will operate.

Step 6: Obtain the business trading license (SIUP)

• Apply for a Business Trading License (Surat Izin Usaha Perdagangan - SIUP) from the Ministry of Trade or local Trade Office (Dinas Perdagangan).
• Prepare required documents, including the company's articles of association, identification documents, and proof of domicile.
• Upon approval, obtain the SIUP, which allows your company to engage in trading activities legally.

Step 7: Register for Taxpayer Registration Number (NPWP)

• Register your company with the local tax office (Kantor Pelayanan Pajak - KPP) to obtain a Taxpayer Registration Number (Nomor Pokok Wajib Pajak - NPWP).
• Submit required documents, such as the Deed of Establishment, SIUP, and identification documents of shareholders and directors.
• Comply with ongoing tax obligations and reporting requirements to maintain tax compliance.

Step 8: Apply for Business Trading License (SIUP)

• The company must then apply for the permanent business trading license (SIUP) at the Ministry of Trade.
• Ensure all necessary documents are in order and comply with the ministry's requirements.

Step 9: Register your company in the One Single Submission System (OSS)

• Register your company in the OSS, an integrated online platform for business licensing and permits.
• Complete the registration process and obtain the OSS number, which serves as proof of your company's legality and facilitates future permit applications.

Step 10: Apply for a Company Registration Certificate (TDP) and relevant licenses

• Depending on your business activities, apply for additional licenses and permits required by relevant authorities.
• These may include environmental permits, health licenses, industrial permits, and other sector-specific licenses.
• Ensure compliance with all regulatory requirements to avoid legal issues and penalties.

Step 11: Open a corporate bank account

• Select a reputable bank and open a corporate bank account in the name of your company.
• Prepare required documents, such as the Deed of Establishment, SIUP, NPWP, and identification documents of authorized signatories.
• Facilitate smooth financial transactions and manage company funds effectively through the corporate bank account.

The process of how to set up a PT company in Indonesia is complex and requires strict compliance

Registration requirements for foreign investors

While the process of registering a company in Indonesia has become more streamlined for foreign investors, understanding how to set up a PT company in Indonesia is still essential. Investors need to prepare the following for registration:

• Completed LLC registration form for notarization.
• Certificate of incorporation for notarization.
• Company name (with at least three options).
• Comprehensive background of founders.
• Copy of official ID cards (3x4 size).
• Copy of land ownership certificate.
• Full address of the PT company.
• Complete data of the Board of Directors and Commissioners.
• Copy of the main office building permit (IMB).
• Copy of the land and building tax (PBB) for the company.

In conclusion, understanding how to set up a PT company in Indonesia involves navigating through complex legal regulations. However, with thorough planning and adherence to the process outlined, establishing your PT company can be achieved successfully. If you're looking to recruit employees for your PT company, consider leveraging Aniday's expertise. With its extensive network of experts and headhunters, Aniday can simplify the process of finding and attracting top talent for your business.

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