A guide to Setting Up a Business in Indonesia: What you Need to Know

The South East Asian country of Indonesia offers the foreign businessperson many opportunities and if you are interested in setting up a company in this unique nation, there is much to consider. Like any other country, the business laws are quite complex and as a foreigner, you must be careful to be in compliance at all times and the best way to ensure compliance is to enlist the services of a local legal firm that facilitates new business registration.

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Main Types of Business

There are 3 types of business that you can register in Indonesia, which are as follows:

  • Representative Office – Known as KPPA, this is ideal for the entrepreneur who wishes to carry out domestic market research and this non-trading business can have one resident manager, with limited business activities and compliance. There are no capital requirements and if you search online for a specialist legal firm based in Jakarta, they will advise you accordingly and facilitate the business registration. If you search with Google, you will quickly source an accounting & bookkeeping services company in Indonesia that can handle all your paperwork and prepare your quarterly reports and tax returns.
  • Local Company – A PT is the right choice for someone who wants limited liability and it also supports work permits, must have at least two local shareholders and at least one director. There are no business restrictions for this trading entity, which is compliant with local laws and this is the easiest type of business registration that can be completed within 3-4 weeks.
  • Foreign Company – Known locally as PT PMA, this entity offers limited liability and can be 100% foreign owned, making is an attractive option for many foreign businesspeople, with a trading entity that must have at least 10 billion rupiah for capital investment. The business also requires at least 1 director, at least 2 shareholders and at least 1 commissioner and it is limited in business activities. You might want to talk to an expert tax consultant, who could save you a lot of money.

Compliance with Indonesian Business Laws and Regulations

Of course, it is crucial that you remain fully compliant and the best way to ensure compliancy is to hire a local legal firm, who will also offer you the best advice when selecting a type of business. They can also provide a wide range of business services, including bookkeeping and accounting, which would prove to be invaluable.

By outsourcing all your office requirements, your new business will prosper and all of your business requirements would be handled by the local law firm, who make sure that you are everything you need and can also assist in obtaining long-term visas. The law firm would be happy to provide you with a short video consultation to discuss your needs, which would be free and without obligation and when you are ready, they will begin the business registration process, notifying you of the many requirements.

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