Opening a business in Indonesia is an exciting opportunity, but the process demands careful preparation. Whether you’re a local entrepreneur or a foreign investor, you must follow specific legal requirements before starting operations.
This guide covers every step—so you can confidently move from planning to business launch.
Also read: Top Questions Foreigners Ask Before Registering a Business in Indonesia
Choose Your Business Entity
Foreign investors typically choose a PT PMA (Foreign-Owned Limited Liability Company), which can allow up to 100% foreign ownership in many sectors. It requires a minimum authorized capital of IDR 10 billion.
For Indonesian citizens, a PT (Local Limited Liability Company) comes with lower capital requirements, and the company name must be in Bahasa Indonesia.
If you only want a presence without commercial activities, consider KPPA (Foreign Representative Office)—suitable for research or liaison purposes.
Also read: The Types of Companies and Business Entities in Indonesia
Check Sector Eligibility
Review the Positive Investment List to see if your business sector is:
- Open (full foreign ownership allowed)
- Conditional (requires local partners)
- Closed (no foreign investment)
- Priority (eligible for government incentives)
Also check:
Secure and Reserve Your Company Name
Your name must have at least three words, be unique, and not resemble government or international organizations. Reserve it via the Ministry of Law and Human Rights (MOLHR) system.
Also read: Company Name Regulation in Indonesia
Get a Valid Business Address
Indonesia requires a commercial (non-residential) address. A virtual office is acceptable for certain business types. You’ll need a lease agreement and, in some cases, a building permit.
Prepare Required Documents
PT PMA: Passports of shareholders, proof of capital, foreign company documents, office lease.
Local PT: KTPs, family cards, and proof of office address.
Register Through OSS and Obtain NIB
The Online Single Submission (OSS) platform issues your NIB (Business Identification Number). This number serves multiple purposes: import license, customs access, and company registration certificate.
Also read: Risk-Based Business Licensing and OSS System in Indonesia
Select KBLI Codes
The KBLI defines your permitted activities. It also determines your licensing obligations—low-risk businesses may only need an NIB, while high-risk sectors require multiple specific permits.
Open a Corporate Bank Account
Prepare your deed of establishment, MOLHR approval, NIB, NPWP (tax number), business licenses, and IDs. Certain banks may require an initial deposit ranging from IDR 1 million to IDR 100 million.
Understand SME (UMKM) Rules
Small local businesses can register for IUMK licenses at the district level with fewer requirements—ideal for micro and small enterprises.
Post-Incorporation Compliance
You must hold an Annual General Meeting, file tax returns, maintain corporate records, and submit investment activity reports to BKPM for PT PMAs. Social security registration with BPJS is mandatory for employees.
Business Requirements Checklist Table
| Business Type | Capital Requirement | Key Documents | Licensing Authority | Key Limitations |
|---|---|---|---|---|
| PT PMA | IDR 10B authorized, IDR 2.5B paid-up | Passports, capital proof, lease, company deed | MOLHR, OSS | Must follow Positive Investment List |
| Local PT | Lower capital (varies) | KTP, KK, lease, company deed | MOLHR, OSS | Name in Bahasa Indonesia |
| KPPA | No capital | Passport, appointment letter, lease | BKPM | No commercial activities |
| UMKM (Micro/Small) | ≤ IDR 500M assets | KTP, KK, local permit | Local District Office | Limited to small-scale operations |
Why Work with InvestinAsia
Navigating Indonesian business law is complex. InvestinAsia’s Indonesia company registration services provide expert guidance—from choosing your entity to securing all licenses—ensuring you start right, avoid compliance issues, and save time.
We also provide other services such as:
- PMA registration in Indonesia (Foreign Company)
- Representative office registration in Indonesia
- Indonesia Local PT PMDN Set Up
- Indonesian Virtual office setup
- Business registration number in Indonesia
- Business Licenses in Indonesia
- Trademark Registration in Indonesia
- Franchise License in Indonesia
If you are interested in starting a business in Indonesia, you can start by contacting us for FREE consultation.
References:
Jakarta Investment Centre. Check your business interest. https://invest.jakarta.go.id/investment-procedures.
IZIN.co.id. Panduan Lengkap KLASIFIKASI BAKU LAPANGAN USAHA INDONESIA (KBLI) 2020. https://izin.co.id/kbli-terbaru.php.
