With its robust economic growth and strategic location in Southeast Asia, Indonesia is an attractive destination for foreign investors, including entrepreneurs from the United Kingdom. However, UK businesspeople looking to establish operations in Indonesia must be aware of the specific requirements for setting up and fully owning a company.
Let’s explore the steps involved in Indonesia company registration for United Kingdom entrepreneurs, along with the sectors that allow full foreign ownership.
Also read: Do UK Citizens Need a Visa for Indonesia?
Can I Register a Company in Indonesia as a Foreigner from the UK?
Yes, UK entrepreneurs can establish and fully own a business in Indonesia, provided the company operates in sectors that permit complete foreign ownership. The Indonesian government classifies industries into two main categories:
- Positive Investment List (DPI): This list includes sectors that are entirely open to foreign investment, designed to stimulate economic growth.
- Negative Investment List (DNI): This list places restrictions on foreign ownership in certain sectors, requiring foreign companies to either collaborate with local businesses or meet specific ownership criteria.
Also read: Can a Foreigner Own 100% of a Business in Indonesia?
Sectors Open to Full Ownership for UK Entrepreneurs
UK entrepreneurs can fully own businesses in various sectors under the Positive Investment List, including:
- Agriculture: Opportunities in crop cultivation, livestock farming, and aquaculture.
- Manufacturing: Involves industries like textiles, electronics, and automotive components.
- Tourism: Encompasses businesses such as hotels, resorts, and other tourism-related ventures.
- Telecommunications: Includes internet service providers and mobile communication services.
- Financial Services: Offers opportunities in banking, insurance, and other financial sectors.
- Healthcare: Involves the establishment of hospitals, clinics, and other healthcare facilities.
These sectors present significant growth potential, as Indonesia actively encourages foreign investment to support its expanding economy.
Also read: Major Industries in Indonesia (Based on Contribution to GDP)
Sectors with Restrictions on Foreign Investment
Certain industries, such as mining, oil and gas, real estate, and retail, have foreign investment restrictions. These restrictions may include:
- Minimum investment thresholds.
- Requirements to partner with local companies.
- Technology transfer or export requirements may apply.
To ensure compliance with current regulations, it is important to consult the Indonesian Investment Coordinating Board (BKPM). (We can assist with this. Contact us now!)
How UK Entrepreneurs Can Set Up a Business in Indonesia
There are two primary ways for UK entrepreneurs to establish a business in Indonesia:
- PT PMA (Penanaman Modal Asing): This is a limited liability company that permits either full or partial foreign ownership.
- PMA Representative Office: This is a non-profit office that acts as a liaison for the foreign parent company in Indonesia.
To establish a PT PMA, UK entrepreneurs must fulfill these conditions:
- The minimum required paid-up capital is IDR 10 billion (around GBP 500,000).
- Appointment of at least two directors, one of whom must be an Indonesian citizen.
- Approval from the BKPM.
For a PMA Representative Office, the requirements are less stringent, needing only a registered office in Indonesia and an appointed Indonesian representative.
Also read: Corporate and Company Structure in Indonesia: Complete Guide
Why Indonesia is a Great Opportunity for UK Entrepreneurs
Indonesia’s rapidly expanding economy, strategic geographical location, and a population of over 270 million people provide immense opportunities for UK entrepreneurs. Key sectors like agriculture, manufacturing, and tourism are particularly promising for foreign investment.
Understanding Indonesia’s regulatory landscape and industry classifications can make the business setup process smoother and more efficient.
For expert guidance on Indonesia company registration for United Kingdom businesses, you can rely on InvestinAsia’s Indonesia PMA company registration and Indonesia Representative Office Set Up services to simplify the process.
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