How to Start a Small Business in Indonesia?
Corporate Secretary Service – Indonesia is a great place to invest. A growing economy, rising consumption, and natural resources and labor make for great investments. Compliance and regulation are difficult in Indonesia because the laws are complex. Investors need clear rules for starting a business in Indonesia.
Indonesia’s new law will change how businesses operate, especially when it comes to foreign investment. It was approved on November 2, 2020. However, many of its provisions are broad and will require further rules to be made.
The old law still applies until further notice. Law No. 25/2007 defines foreign investment as investment by foreign companies in Indonesia. This includes foreign persons, companies, or governments. The Investment Coordinating Board or BKPM updates this list.
- Some sectors are excluded from FDI.
- Limit foreign investment.
- Some sectors require local partners or domestic ownership.
If you’re a foreigner looking to do business in Indonesia, we recommend hiring a business solutions company like 3E Accounting. Company registration, licensing, and other compliance issues may delay starting the business. The best legal structures for foreign investment are:
- A Representative Office is best for exploring business opportunities and has no financial reporting obligations. Can do research and marketing.
- Foreign Investment Limited Liability Company or PT PMA: ideal for revenue-generating businesses and can be foreign-owned. You need at least IDR 10 billion in capital with two shareholders. One director must be foreign and one must be Indonesian.
You can also buy an existing PT PMA. A local limited liability company (Perseroan Terbatas or PT) can be converted into a PT PMA. This is faster, but still needs Ministry approval and OSS registration. Foreign workers in Indonesia must get a KITAS or work permit and a Tax Identification Number or TIN (NPWP in Indonesia).
Baca Juga: How to Get a Business License in Indonesia?
All PT PMA’s in Indonesia need the following to start and run their business:
- Deed of establishment and articles of association.
- Tanda Daftar Perusahaan (TDP)
- Legal status from the Ministry of Law and Human Rights.
- Register with the OSS platform.
- Get a business registration number from OSS.
- Location permit replaces domicile letter.
- Business license from BKPM.
- Confirmation as a taxable entrepreneur.
- Taxpayer Identification Number (TIN or NPWP in Indonesia)
Most companies can start business after getting an NIB. If you’re in a specialized sector like food or agriculture, you’ll need more permits and licenses. PT PMA must submit audited annual reports to the Ministry of Trade.
This guide helps foreigners start a business in Indonesia. To ensure a smooth transition, contact 3E Accounting. Our team of experts can help you navigate the Indonesian commercial landscape. Don’t worry about developing your business by setting up a company in Indonesia, because Portcorp is here as a solution for your business. Portcorp is your comprehensive corporate secretary service in Indonesia. With our presence, you can get a dedicated company secretary to support you to what you need. Our company secretaries will track deadlines and file paperwork so your business keeps running smoothly. Contact us now for your business success in the future!
