Indonesia Company Formation
Indonesia Company Formation: Your Gateway to Southeast Asia’s Fastest-Growing Market Main Characteristics and the basic rules of Company registration in Indonesia
Indonesia Company Formation with BRIS Group
BRIS Group provides expert Indonesia company formation services for entrepreneurs and international investors seeking to establish a business presence in Southeast Asia’s largest economy. Forming a company in Indonesia offers access to a fast-growing market, a strategic regional location, and a favorable environment for manufacturing, trade, and investment.
Our specialists manage the complete Indonesia company registration process remotely, including licensing, corporate banking support, compliance, and ongoing administration. With BRIS Group, your Indonesian company will be fully compliant and ready to operate efficiently across Asia and globally.
A Comprehensive Guide for Non-Residents to Register a Company in Indonesia
Indonesia, the world’s fourth most populous nation and Southeast Asia’s largest economy, offers incredible opportunities for foreign investors. With a thriving consumer market, strategic location, and business-friendly reforms, Indonesia company formation is an attractive option for entrepreneurs seeking growth in manufacturing, digital technology, natural resources, and services.
This guide outlines everything you need to know about forming a company in Indonesia — from entity types and advantages to tax structure, legal requirements, and incorporation procedures.
Why Choose Indonesia for Company Formation?
Indonesia has undergone significant regulatory and economic transformation over the past decade, opening its markets to foreign investors and simplifying business registration procedures.
Key reasons to start a business in Indonesia include:
- Strong Economic Growth: One of the fastest-growing economies in Asia with a young, tech-savvy population.
- Strategic Location: A gateway to ASEAN and key international trade routes.
- Large Domestic Market: Access to over 275 million consumers.
- Foreign Investment Incentives: Government-backed initiatives encouraging FDI in priority sectors.
- Stable Political Environment: Consistent policies that support business development.
- Improved Ease of Doing Business: Digitalization of company registration and licensing.
- Access to Natural and Human Resources: Abundant raw materials and a skilled workforce.
Types of Companies in Indonesia
Foreign investors can establish various types of entities depending on their business objectives and capital structure:
- PT PMA (Perseroan Terbatas Penanaman Modal Asing) – Foreign-Owned Limited Liability Company
The most common structure for foreign investors. Allows up to 100% foreign ownership (depending on the industry) and can engage in commercial operations.
- Local PT (Perseroan Terbatas) – Local Limited Liability Company
Primarily for Indonesian citizens but can include foreign shareholders through nominee arrangements.
- Representative Office (RO)
Suitable for market research, promotion, or liaison activities. Cannot generate revenue or sign contracts.
- Branch Office
A branch of a foreign company registered to operate under the parent company’s name in specific industries (mainly banking, insurance, and energy).
Advantages of Indonesia Company Formation for Non-Residents
- Full or majority foreign ownership possible in many sectors.
- Access to ASEAN’s largest consumer market.
- Government incentives and tax holidays for strategic industries.
- Streamlined company registration via the Online Single Submission (OSS) system.
- Availability of skilled, cost-effective labor.
- Strategic location connecting Asia-Pacific trade corridors.
- Growing digital economy attracting global technology investments.
Disadvantages of Indonesia Company Formation
- Complex bureaucracy in certain sectors and regions.
- Local content requirements for some industries.
- Language barrier – documents often required in Bahasa Indonesia.
- Capital and licensing restrictions for certain activities.
- Frequent legal updates requiring compliance monitoring.
Requirements for Company Registration in Indonesia
To register a company in Indonesia, you must provide:
- Company name approved by the Ministry of Law and Human Rights.
- Articles of Association (Akta Pendirian) notarized in Indonesia.
- Shareholders (minimum 2) – can be individuals or legal entities.
- Board of Directors and Board of Commissioners.
- Registered office address in Indonesia.
- Minimum paid-up capital – varies by sector (usually IDR 10 billion for foreign-owned companies).
- Business License (NIB) from the OSS system.
- Taxpayer Identification Number (NPWP).
Procedure for Indonesia Company Formation
The process of company registration in Indonesia generally involves:
- Determine Business Structure and Ownership: Choose PT PMA, Local PT, or Representative Office.
- Name Approval: Reserve a company name via the Ministry of Law and Human Rights.
- Prepare Deed of Establishment: Draft and notarize Articles of Association.
- Legalization of the Company: Obtain approval from the Ministry of Law and Human Rights.
- Register with the OSS (Online Single Submission): Obtain the Business Identification Number (NIB).
- Tax Registration: Register with the Directorate General of Taxes for a corporate tax ID.
- Domicile Certificate: Acquire from the local municipality.
- Open a Corporate Bank Account: Required for paid-up capital deposit and transactions.
Timeframe for Company Formation in Indonesia
|
Stage |
Estimated Duration |
|
Name Approval |
1–3 business days |
|
Document Preparation & Notarization |
3–5 business days |
|
Ministry of Law Approval |
5–7 business days |
|
OSS Registration & Licensing |
3–5 business days |
|
Tax Registration & Bank Account Setup |
3–5 business days |
Total Estimated Time: 2–4 weeks for full company formation in Indonesia, depending on the structure and documentation.
Corporate Tax System in Indonesia
Indonesia’s corporate tax framework is competitive and offers various incentives for foreign investors.
|
Tax Type |
Rate |
Notes |
|
Corporate Income Tax (CIT) |
22% |
May be reduced to 17% for listed companies. |
|
Value Added Tax (VAT) |
11% |
Standard rate for goods and services. |
|
Withholding Tax |
20% |
On dividends, interest, and royalties (may vary under tax treaties). |
|
Branch Profit Tax |
10% |
On after-tax profits remitted abroad. |
|
Personal Income Tax |
5–35% |
Progressive rates for individuals. |
Incentives:
- Tax holidays up to 20 years for pioneer industries.
- Reduced rates for SMEs and listed companies.
- Investment allowances for R&D and infrastructure projects.
- Double taxation treaties with over 70 countries.
How We May Help You with Our Professionals
Our team of local and international experts provides comprehensive support for Indonesia company formation, ensuring smooth compliance with local laws and regulations.
Our services include:
- Guidance on business structure and ownership rules.
- Company name reservation and legal documentation.
- Licensing and OSS registration support.
- Corporate bank account setup assistance.
- Tax, accounting, and legal advisory.
- Local director or representative services (if needed).
- Post-incorporation compliance and reporting support.
Start Your Indonesia Company Formation Journey Today
Indonesia offers a strategic, high-growth environment for entrepreneurs and investors aiming to expand in Asia. With its large domestic market, improving infrastructure, and pro-investment policies, it is an ideal jurisdiction for long-term success.
Our experienced consultants can streamline every aspect of your Indonesia company formation, helping you establish your business efficiently and compliantly.
Contact us today to begin your journey in Indonesia and unlock the opportunities of Southeast Asia’s most dynamic economy.
Questions & Answers
1. What is the Corporation Tax rate in Indonesia?
Corporation tax in Indonesia is generally set at a rate of 22% for most companies. However, small enterprises with gross revenue below IDR 4.8 billion benefit from a lower rate of 11% on their first IDR 4.8 billion of income. This rate applies to both resident and non-resident companies engaged in business activities in Indonesia.
2. How is Income Tax structured in Indonesia?
Income tax in Indonesia is progressive, with rates ranging from 5% to 30%, depending on the income bracket. Individual taxpayers earning up to IDR 60 million per year are taxed at 5%, while those earning above IDR 5 billion face a 30% tax rate. Non-residents are subject to a flat rate of 20% on income derived from Indonesia.
3. What is the VAT rate in Indonesia?
Value-added tax (VAT) in Indonesia is normally set at 10%. However, certain goods and services may be exempt from VAT or subject to a lower rate. Businesses with an annual turnover above IDR 4.8 billion are required to register for VAT and comply with related filing obligations.
4. How are dividends taxed in Indonesia?
Dividends paid to resident individuals in Indonesia are typically subjected to a tax rate of 10%. Non-resident individuals, however, are taxed at a higher rate of 20% unless a lower rate is applied under a double tax treaty. It is essential to check existing treaties to ensure compliance and possible tax relief.
5. Are there other taxes in Indonesia that businesses should be aware of?
Yes, besides corporation tax, income tax, VAT, and dividends tax, businesses in Indonesia may encounter other taxes such as land and building tax, luxury goods tax, and withholding tax on certain payments like royalties and services. Each of these taxes has specific rates and regulations, crucial for compliance.
Learn more: Visit our Full FAQ HUB page
or contact our tax and company formation team at[email protected]
What is the process for company formation in Indonesia for non-residents?
The process for company formation in Indonesia for non-residents involves several steps. First, you need to choose a business entity type, such as a PT (Limited Liability Company) or a PMA (Foreign Investment Company). Following that, you’ll gather the required documents, including identification and proof of address. Once you have the documents ready, you’ll submit them to the Indonesian Investment Coordinating Board (BKPM) to obtain a business license. After receiving the license, you need to register for taxation and obtain necessary permits based on your business activities.
What are the key requirements for non-residents to establish a business in Indonesia?
Non-residents looking to establish a business in Indonesia must meet several key requirements. These include having a legal business structure, usually a PMA for foreign investors, and a minimum investment of approximately $1 million. Additionally, you will need to provide a deed of establishment, details of shareholders, a business license, tax registration, and any specific permits related to your business operations. Engaging a local legal expert can help navigate these requirements efficiently.
Can a foreigner fully own a company in Indonesia?
Yes, a foreigner can fully own a company in Indonesia, but this is primarily applicable to certain business sectors defined by the Negative Investment List (DNI). A PMA company allows 100% foreign ownership for businesses in sectors that are open to foreign investors. However, other sectors may require partnerships with local Indonesians. It’s crucial to review the DNI to understand ownership limits in your specific industry.
What taxes should non-residents be aware of when forming a company in Indonesia?
When forming a company in Indonesia, non-residents should be aware of several taxes that may apply. The Corporate Income Tax (CIT) is typically set at 22%, with potential reductions available for new businesses. Value Added Tax (VAT) of 10% may also apply to goods and services sold. Additionally, there may be withholding taxes on various income streams, including dividends, interest, and royalties. Consulting with a tax advisor can help navigate these obligations effectively.
How long does it take to establish a company in Indonesia for non-residents?
The time frame to establish a company in Indonesia for non-residents can vary widely based on several factors. Generally, the entire process can take anywhere from 4 to 12 weeks. This timeline includes obtaining the necessary licenses, registering with tax authorities, and finalizing local permits. Engaging with local professionals, such as company formation agents or legal advisors, can significantly expedite the process by ensuring all documentation is prepared correctly and submitted on time.
Are there any restrictions on business sectors for non-residents in Indonesia?
Yes, there are restrictions on business sectors for non-residents in Indonesia, primarily dictated by the Negative Investment List (DNI). Certain sectors, such as mining, telecommunications, and transportation, may have limitations on foreign ownership or may require partnerships with local entities. Additionally, sectors considered sensitive to national interests might be fully closed to foreign investment. It is crucial to review the DNI before initiating the company formation process to ensure compliance with local regulations.
or contact our tax and company formation team at
This publication is provided for information purposes only. This info should not be treated as a substitute for a tax or legal consultation or legislation. You should not act on the basis of the information contained in this publication without having obtained individual advice from the professional expert.
BRIS GROUP does not assume responsibility for any damage resulting from decisions made by the reader on the basis of this publication.
About Indonesia
Capital: Jakarta
Region: Indonesia is a large archipelago of nearly 20,000 volcanic islands. The country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guinea.
Language: Indonesian
Currency: Rupiah (Rp)
Time Zone: GMT+7
Dial Code: +62
Abbreviations: ID /IDN
Helping Your Company Thrive in Indonesia With us, starting and running a business in Indonesia will be easy and efficient!
- Full support of the company’s registration in Indonesia: from the preparation of documents to their submission.
- Remote registration: all processes are online, wherever you are.
- Secretary and Treasurer: we can take on these important roles.
- Nominal directors and shareholders: we will ensure the confidentiality of your information.
- Help in opening a bank account: we will simplify this complex process.
- Registration for taxes, VAT and EORI: ensure all requirements are met.
- Website development: we will create a professional online representation for your business.
- Logo creation: we will design a unique and memorable logo for your brand.
- Full administrative support of the company: we will take over routine tasks.
- Mailing address organization: we provide a reliable mailing address for your business.
- Organization of the virtual office: we will ensure the professional image of your company.
- Telephone answering service: we will answer calls on behalf of your company.
- Accounting, audit and reporting: ensure accurate and timely accounting.
- Preparing and filing a VAT declaration: let’s save you the trouble.
- Interaction with local authorities: take over communication with state institutions.
- Trademark registration: protect your brand.
- More Emphasis on Customer Input.