When establishing a business in Indonesia, it’s essential to understand the difference between PT (Perseroan Terbatas) and CV (Commanditaire Vennootschap) companies.
Many entrepreneurs often wonder, “What is the difference between CV and PT in Indonesia?” Each company type has its unique characteristics and legal requirements.
In this article, we will explore the dissimilarities between PT vs CV companies in Indonesia, helping you make an informed decision based on your business needs and goals.
PT: A PT company is a limited liability company, similar to a corporation in other countries. It is considered a separate legal entity from its shareholders. The liability of shareholders is limited to their capital contributions to the company.
CV: In contrast, a CV company operates as a partnership with general partners and limited partners. General partners assume unlimited liability, while limited partners’ liability is limited to their capital contributions.
Minimum Capital Requirements
PT: To establish a PT company, the Indonesian government has set a minimum capital requirement, which varies depending on the business sector. For instance, a PT company in the trading sector must have a minimum capital of IDR 50 million.
CV: Unlike PT companies, CV companies don’t have specific minimum capital requirements. The capital contributions of partners can be determined based on their agreement.
Also read: 6 Types of PT Companies in Indonesia
Legal Entity Status
PT: A PT company is recognized as a separate legal entity from its shareholders. It can enter into contracts, own assets, and be sued or sue others in its own name.
CV: In contrast, a CV company doesn’t have separate legal entity status. Instead, it operates as an extension of the partners, and the partners are personally liable for the company’s debts and obligations.
PT: A PT company is required to have a board of directors (Direksi) and a board of commissioners (Komisaris). The directors manage day-to-day operations, while the commissioners oversee their activities and ensure compliance with regulations.
CV: Unlike a PT company, a CV company doesn’t have a formal management structure. The partners collectively manage and make decisions for the company.
PT: Foreigners can own shares in PT companies in Indonesia, subject to certain restrictions based on the business sector. Some sectors may require partnerships with Indonesian entities or specific licenses.
CV: Foreign ownership in CV companies is limited to being a limited partner, while general partners must be Indonesian citizens.
Transfer of Ownership
PT: Ownership of shares in a PT company can be transferred through the sale or transfer of shares, following the necessary legal procedures and documentation.
CV: In a CV company, ownership can be transferred by adding or removing partners, requiring an amendment to the partnership agreement and appropriate documentation.
PT: PT companies are subject to corporate income tax on their profits at a rate of 25% in Indonesia.
CV: CV companies are not subject to corporate income tax. Instead, the partners report their share of the profits as part of their personal income tax obligations.
Understanding the differences between PT and CV companies in Indonesia is crucial for making the right decision when establishing your business.
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If you are considering to set up PT company in Indonesia, InvestInAsia offers comprehensive company registration services. Contact us today for a consultation and take the first step towards establishing your PT company in Indonesia.