Foreign Company Registration in Indonesia: Process and Requirements

Indonesia continues to attract significant foreign investment because of its large population and steady economic growth. 

According to the World Bank, Indonesia’s GDP is projected to grow by approximately 5% annually in both 2025.

Moreover, establishing a business in Indonesia offers investors access not only to its vibrant domestic market, but also to the broader ASEAN region.

Therefore, starting a company in Indonesia is a smart move that positions you for significant growth and regional advantage.

However, navigating Indonesia’s regulatory and bureaucratic landscape requires a clear understanding of legal steps, capital requirements, and licensing procedures. 

Read More: 9 Key Insights to Understand Business Culture in Indonesia

This guide provides a concise overview of the foreign company registration process in Indonesia as of 2025, ensuring investors are equipped with up-to-date insights and practical tips.

Types of legal entities for foreign investors

Indonesia offers various business entities, some of which are available for foreign investors:

1. PT PMA (Foreign Investment Limited Liability Company)

PT PMA is the primary legal entity that allows foreign investors to conduct commercial activities and generate profits in Indonesia as an Indonesian-registered company.

This structure enables complete or partial foreign ownership, depending on the business sector’s regulations.

PT PMA companies are treated as Indonesian legal entities and have full rights to engage in business across most sectors, resembling the functions of an LLC in western countries.

Therefore, it’s highly favored among foreign investors due to its relatively simple requirements.

However, certain sectors in Indonesia are restricted or partially closed to foreigners, detailed in the Positive Investment List. 

In cases of partial closure, foreign investors need an Indonesian partner to establish businesses in those sectors.

There are several minimum requirements for registering foreign-owned companies in form of PT PMA in Indonesia, including:

• Having at least two shareholders who can be foreign individuals, foreign corporations, or a combination of both.
• At least one local director and one commissioner, whether foreign or local.
• A fully paid-up minimum investment of Rp10 billion.
• Compliance with sector-specific ownership restrictions as regulated by the Indonesian government.

2. Representative office

Representative offices in Indonesia are suitable for foreign companies exploring the Indonesian market. 

Allowed activities are limited to market research, promotion, and acting as agents for buying or selling on behalf of the foreign parent company. 

Licenses for these companies expire after two years and need renewal to continue business in Indonesia. 

It’s important to note that representative offices cannot generate profits in Indonesia, and all commercial transactions must be managed by the foreign parent company. 

Unlike other foreign-owned companies in Indonesia, there is no minimum capital requirement for representative offices. 

They are also allowed to employ both local and foreign employees. 

However, there are several administrative requirements needed for establishing a representative office, such as:

• Submission of an application and supporting documents to the Ministry of Trade or Investment Coordinating Board (BKPM).
• Appointment of a foreign representative authorized to manage office activities.
• Annual reporting of business activities to relevant government authorities.
• Validity period generally up to five years, with the possibility of renewal.
• Strict adherence to non-commercial operational scope.

There are three types of representative offices in Indonesia: Foreign representative office, Foreign construction representative office, and Foreign trade representative office.

3. Subsidiary office

Subsidiary companies in Indonesia are formed as limited liability companies (LLCs), with the most appropriate type being PT PMA if the parent company is foreign. 

Subsidiaries are separate legal entities established by business owners to access the Indonesian market.

They operate independently from the parent and are subject to Indonesian corporate regulations and taxation, such as a corporate tax rate of 25%.

To do a subsidiary company registration in Indonesia, there are several minimum requirements, such as: 

• Having at least two individuals or foreign corporations or a combination with local shareholders
• At least one local director
• One foreign or local commissioner.

Registration Process and Required Licenses

Foreign company registration in Indonesia involves a straightforward sequence of essential steps to ensure full legal compliance and smooth business operations.

From selecting appropriate business structure to securing all necessary licenses, each phase plays a vital role in formalizing your business.

The following six key steps summarize the registration journey:

1. Determine the Business Structure

Before starting the registration process, you need to decide on the appropriate legal business structure. 

This decision sets the foundation for all subsequent steps and determines the regulatory, ownership, and compliance frameworks your business will follow. 

Typically, this evaluation involves consulting with legal advisors or investment consultants to align your business goals with the right entity type.

Choosing your business structure early ensures clarity in preparing documentation and meeting government requirements.

2. Reserve your Company Name

The registration process begins with reserving a unique and compliant company name. 

This involves submitting proposed names through the Online Single Submission (OSS) system, adhering to regulations such as minimum word count and name suitability. 

You will need to provide potential names for approval, and this task is usually handled by the company founders or their appointed representatives. 

Once approved, the reserved name is valid for around 60 days, allowing you time to prepare subsequent documents.

3. Preparing Essential Documents

Once the structure is chosen and the company name reserved, you need to prepare several critical documents that form the legal foundation of your company for registration.

The essential documents include:

• Deed of Establishment: A notarized document drafted by a licensed Indonesian notary which contains the company’s articles of association, the composition of shareholders, directors, and commissioners, as well as the business scope.
• Statement Letter: A formal letter confirming the authorized capital and paid-up capital of the company.
• Company Name Approval: Evidence of an approved and unique company name reservation compliant with Indonesian law.
• Domicile Certificate: A certificate stating the company’s official registered office address.

Preparing these documents involves coordination between the notary, company founders, shareholders, and office providers, which is fundamental to avoid delays in subsequent steps. 

After this stage, your business foundation documents will be ready for submission. 

This preparation phase typically takes 2 to 4 weeks, depending on the thoroughness of document collection and notarization.

4. Registering with OSS

After all the documents are ready, you need to register your business with the OSS system to obtain the Business Identification Number (NIB).

This number serves as your company’s primary legal identity and initial business license for operation in Indonesia.

Additionally, you will apply for specific business licenses required by your company’s sector to ensure compliance with relevant regulations. 

These registrations are typically managed by your company representatives or appointed agents through the official OSS portal.

5. Registering for a Tax Identification Number (NPWP)

After obtaining business licenses via OSS, the company must register for a Tax Identification Number (NPWP) at the local tax office to formalize its tax status. 

This requires submission of your legalized deed, domicile certificate, and identification documents of the responsible official. 

The NPWP allows your company to fulfill all tax reporting and payment obligations, and registration is mandatory before conducting any commercial operations. 

This process is generally completed within several days.

Read More: Indonesia Corporate Income Tax Guide: Rates, Incentives & Deadlines

6. Opening a Corporate Bank Account

With legal and tax documents secured, the company opens a corporate bank account under its name. 

This step involves submitting required paperwork and fulfilling the bank’s due diligence procedures. 

The bank account is critical for depositing paid-up capital and managing financial transactions. 

Authorized signatories manage this process, which typically takes several business days.

7. Managing Visas and Stay Permits

For foreign directors or commissioners, visas and stay permits (KITAS) must be obtained to comply with immigration regulations. 

This involves preparing sponsorship letters, company documents, and employment contracts, and applying through immigration authorities, often assisted by licensed consultants. 

This process legally enables foreign personnel to reside and work in Indonesia and can take several weeks depending on circumstances.

Read More: Business & Working Visa in Indonesia: Application and Regulation

Minimum investment requirements and shareholding structures

There are several minimum requirements and shareholding structures to follow when establishing a business in Indonesia:

1. Minimum investment requirements

The Indonesia Investment Coordinating Board (BKPM) sets the minimum capital requirements for PT PMA (Foreign Investment Companies) at Rp10 billion, depending on the industry foreign investors are involved in. 

This minimum capital amount serves as a rough plan and will be invested according to the company’s investment plan over three years. The minimum investment rate for the first four digits in the Indonesian Standard Industrial Classification must be more than Rp10 trillion, excluding land and buildings within one business activity.

2. Shareholding structures

PT PMA must have a minimum investment of Rp10 billion, with placed and paid-up capital of Rp2.5 billion. Shareholding percentages are determined based on the nominal value of shares, with each shareholder required to hold a minimum of Rp10 million in share value.

3. Negative Investment List (DNI)

The DNI is a list of business sectors compiled by the government to inform potential investors about businesses that are not permitted in Indonesia and various regulations, especially regarding joint ownership. 

The DNI allows 100% foreign investment in over 200 business lines, with several incentives for priority sectors. However, certain titles, such as Right of Ownership, are only available to Indonesian citizens, while others like Right to Use are open to foreign investors.

Please note that these regulations may change over time, so it’s important to check the latest rules and regulations.

Role of BKPM as Investment Coordinating Board

By bridging the business world and the government, BKPM is responsible for creating a more conducive investment climate for Indonesia. This includes efforts to enhance the ease of doing business in Indonesia, which is crucial for attracting foreign investment. 

Here are some supports provided by BKPM to foreign investors:

1. One-stop service

BKPM serves as a one-stop service center for investors, providing information on investment opportunities, assistance in obtaining required permits and licenses, and advice on navigating the regulatory environment in the country.

2. Fiscal facilities

The Indonesian government offers investment incentives such as customs duty exemptions, a 30% net income deduction from total investment in the form of fixed assets, and depreciation of intangible assets.

3. Enhanced investment access

BKPM plays a crucial role in improving investment access in Indonesia. It collaborates with various stakeholders to ensure that both foreign and domestic companies can invest in Indonesia smoothly.

4. Improved investment quality 

BKPM works with various stakeholders to ensure that investments made in Indonesia bring maximum benefits to the Indonesian economy.

5. Introduction of innovation in investment

BKPM also ensures that both foreign and domestic companies can leverage the latest technology and innovation in their investments in Indonesia.

Timelines and costs

Understanding the registration process involves knowing how long it usually takes and what fees are involved. 

1. Timeline for the registration process

Typically, the registration process for foreign companies in Indonesia spans from 1 to 3 months. The duration varies depending on the business registration location and document completeness.

However, since 2020, the registration process in Indonesia, particularly in Jakarta, has been expedited. In just four weeks, your PT PMA could be ready to operate.

2. Associated costs

The total cost of registering your company in Indonesia depends on the package until your business starts operating. This cost ranges from IDR 3,500,000 to IDR 10,000,000.

These expenses cover notary fees, government registration, NPWP processing, domicile handling, deed authentication by the Ministry of Law and Human Rights, consultation fees, etc.

Please note that costs and timelines may vary depending on various factors, including business type, location, and process complexity. Therefore, it is highly recommended to consult with legal or business advisors for a more accurate and detailed estimate.

Tips for successful registration

To smoothen the company registration journey in Indonesia, it’s wise to follow some strategic guidelines:

1. Thorough research and strategic planning

Before diving into registration, thorough research is key. Plan out your business strategy carefully, covering financial, operational, and marketing aspects. Understand industry trends, customer demographics, and economic conditions to make informed decisions.

Do not miss to consider external factors like economic conditions, laws and regulations, and market competition as well. 

2. Understanding legal requirements and limits

In Indonesia, there are various requirements and limitations that need to be understood and complied with. For instance, there are restrictions on certain industries that foreign companies can enter, and there are minimum capital requirements that must be met. 

Moreover, you need to ensure that your business complies with tax laws, labor laws, environmental laws, and other relevant regulations.

3. Collaborating with reliable local partners or advisors

Forge partnerships with trusted local entities to ease the registration process and navigate challenges. They can help you understand local laws and regulations, assist in document submission processes, and provide valuable insights on doing business in Indonesia. 

Besides offering insights into local regulations, they also assist with document submission, and help build relationships with stakeholders. Their expertise is invaluable for understanding market dynamics and overcoming obstacles.

Maximize Your Business Potential in Indonesia

Indonesia’s economy is vibrant and growing, presenting vast opportunities for businesses to thrive. 

However, success in this dynamic market requires more than just completing your company registration. 

You need efficient operations, embrace digital innovation, and have the ability to scale quickly to sustain your growth.

To stay competitive and reach your full potential, leveraging technology to streamline processes and future-proof your operations is crucial.

With integrated SaaS from Mekari, your journey toward lasting business success in Indonesia starts with a solid foundation — empowering you to streamline operations, adapt swiftly, and seize every opportunity in a fast-evolving market.

References

Acclime. ‘’Foreign company registration options in Indonesia’’
Ministry of Investment. ‘’How Can We Help’’
InCorp. ‘’How to Meet PT PMA Minimum Capital Requirements in Indonesia’’