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What Business Should I Start In Indonesia – When you have all this extraordinary beauty, abundance of green natural resources and good people, such power can be wasted if not managed properly. Indonesia has an undeniable beauty that is hard to miss, even a visitor who comes as a tourist first, would like to be part of that opportunity to run a business or distribute their investment property in the country. So, how can I start a business in Indonesia if I am a foreigner? What is PT. The PMA? What rights and obligations do I have with a foreign company in Indonesia? If you are still not sure how to do your business in Indonesia, E-VISA Bali will answer all these questions today, in the following.
If you are serious about starting a business in Indonesia, you will need help from PT. PMA. What’s going on? PMA represents
What Business Should I Start In Indonesia
. It refers to the type of foreign investment for conducting business in Indonesian territory. The business will be conducted in the form of a PT or a limited liability company under the law of Indonesia. In particular, large business areas are involved in the establishment of PT. PMA. Therefore, the source of funding can come entirely from foreign investors (individual foreign citizens, foreign businesses and/or foreign governments) or joint ventures with domestic investors. Additionally, a business license is another thing to consider depending on your business location.
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Indonesia is open to foreign investment. But before your PT is built. PMA, you must ensure that your line of business is classified in the open sector and made in the list of important investments in Indonesia published by BKPM (Investment Coordination Board). The list gives you an understanding of your limits for certain business areas and other requirements.
Building a PT. PMA, foreign investors must meet a minimum investment plan of IDR 10 billion. For wholesale trade, food and beverage services and construction services, the value of the investment plan does not include land and buildings. Although the investment plan in the industrial business area already includes land and construction.
On the other hand, the minimum amount you have to deposit in Bank Indonesia when establishing your PT is IDR 10 billion. After your registration, you must comply with tax laws by obtaining a Tax Identification Number (NPWP) for your business.
After completing the establishment of your PT. PMA, now you can run your line of business and activities in Indonesia, for example:
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In the past, almost all directors were PT. PMAs were immigrants and when they returned to their countries and left the company, it was very difficult to find out where they were. To avoid this incident, it is recommended that you appoint a guide from a local Indonesian citizen. If the PT. The PMA insists that the foreign director, ensure that the foreigner has a permanent residence permit (KITAP) card. This indicates that the foreigner has permanent residence in Indonesian territory.
A foreign company in Indonesia is in the form of a PT or a joint stock company according to the Omnibus Law on Job Creation based on the law of the Minister of Law and Human Rights 21/2021, the procedures can be described as follows:
3. Minutes of establishment of PT/minutes of establishment of PT;
5. A letter of commitment from the founder to obtain a decision, approval or recommendation from the PT technical agency in a specific industry or a copy of the decision, approval and recommendation from the relevant PT technical agency in a specific business. place;
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6. A letter of commitment from the founder to obtain a taxpayer identification number (NPWP) and an annual tax return report; again
7. Copy of letter of statement about full address of PT from building manager or authorized authority or original letter of statement about full address of PT signed by all board members and all founders and members of board of commissioners of PT.
Do you have any other questions about the process of starting a company with PT? PMA in Indonesia? Ask us your question at info@. There is no better time than 2021 when it comes to starting a business in Indonesia as a foreigner. The Indonesian government has recently implemented business-friendly policies to improve the investment climate in the country.
If you are a foreign investor who wants to invest and start a company in Indonesia, you can be relieved that today it is very easy and convenient to incorporate companies in Indonesia.
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If previously the company registration process required at least two months to be completed, the case is different in 2021. Now a foreign investor can get his company registered within one to 1.5 months.
In addition, if you plan to establish your business in Jakarta, you do not need to submit a Business Domicile (SKDP). This regulation has been in effect since May 2019.
If you are a foreign investor who will cover the positions of shareholder and board member or commissioner, the KITAS for investors is available to you and the good news is that this residence permit allows you to work quickly.
In addition, the Investor KITAS comes with significant benefits including easy application and exemption from government work permit fees (DPKK).
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There are two options available for Investor KITAS. As a foreign investor, you can choose whether you want to apply for a 1-year KITAS or a 2-year KITAS. Both types of KITAS allow you to enter and exit Indonesia multiple times as long as your KITAS is valid.
To benefit from the benefits of KITAS Investor, you must invest at least IDR 1 billion in invested shares. And the company must have an invested capital of more than IDR 10 billion.
As if the above two changes were not enough, your company can now start work immediately as long as it receives a Business Identification Number (NIB) that can be used through the Online Shipping System (OSS), which has been upgraded to OSS 1.1. In other words, no additional licenses are required.
There are an additional 45 business areas, namely Call Center, Event Promoter, Travel Agency (Ticket) and Education and/or Training (among others). For more information, please contact our business consultant.
Why You Should Start A Business In Indonesia
In order for your company to operate in Indonesia, you must register the company. To get a smooth start, you need to choose a legitimate business.
The most common legal business options available to foreign investors in Indonesia are Foreign Limited Liability Company (PT PMA), Local Limited Liability Company (PT) and Representative Office.
Since most foreign investors can choose to enter PT PMA in Indonesia, we will explain in detail about the type of PT PMA.
Foreign ownership of PT PMA varies from as little as 1% to 100%. To know more about foreign ownership in Indonesia, you should read the list of negative funds or contact our experts. In addition, PT PMA can hire foreign workers.
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For a PT PMA to operate in Indonesia, it must have at least one director and one commissioner (one of whom must be Indonesian), and two shareholders (either foreign or local individuals or companies, or a combination of both).
PT PMA requires a minimum of IDR 10 billion in investment, and the minimum paid-in capital is also IDR 10 billion.
Outside of Jakarta, a residence permit is still required to register a business in Indonesia. It is important to know that a residential address is strictly prohibited for conducting business in Indonesia. If you want to avoid the huge costs of setting up a new office, you can always choose a virtual office or a serviced office in Indonesia.
As mentioned above, in order to facilitate the business establishment process, you need to apply through OSS for NIB and other relevant licenses.
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After your company has been successfully incorporated in Indonesia, you are required to secure residence and work permits for your foreign workers and secure a bank account. If you are unsure about either process, please feel free to chat with us.
Despite recent pro-business policies, there are still many complex regulations that restrict foreign investment. With the implementation of the omnibus law, thousands of laws will be changed, including tax and labor.
The negative investment list in Indonesia may soon be replaced by the positive investment list, also known as the priority list. Some business sectors will welcome foreign investment, such as automobiles, coal-fired power plants and electronics, as well as exports and substitution.
It is important to note that policies and laws may change frequently in Indonesia to encourage foreign direct investment. You can check this guide for business registration in Indonesia.
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However,
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