How to Set Up a PT Company in Indonesia for Local and Foreign Investors

r123-share-title

Knowing how to set up a PT company in Indonesia is essential for anyone who wants to build a business.

Establishing a PT (Perseroan Terbatas) company in Indonesia requires careful planning, from name reservation to compliance with capital and licensing requirements. 

Currently, the government uses the Online Single Submission (OSS) system to simplify the business licensing process. 

However, the licensing rules may differ for establishing a local company and a foreign-owned company.

Learn how to establish a PT company in Indonesia, whether for a local or foreign-owned business, in the guide below.

How to Set Up a PT Company in Indonesia

1. Understanding the PT Structure

Perseroan Terbatas (PT) is a limited liability company where shareholders responsibilities are limited to their share contributions. 

A PT can be established by both Indonesian and foreign individuals.

Local PTs or domestic investment (Penanaman Modal Dalam Negeri/PT PMDN) are designed for 100% Indonesian ownership.

Foreigners may opt for a foreign investment company (Penanaman Modal Asing/PT PMA). 

This requires a minimum of two shareholders, either individuals or legal entities, along with one director and one commissioner.

2. Checking Business Sector Regulations

Before proceeding, verify if your intended business sector is open to a local PT. 

Indonesia’s Positive Investment List regulates sectors with some restricted or closed to foreign ownership. 

Local PTs generally face fewer restrictions making them more suitable for certain industries. 

Consult the Ministry of Investment and Downstream Industry (BKPM) or a legal advisor to ensure compliance with sector-specific regulations. 

This step is crucial to avoid legal obstacles during registration.

3. Choosing and Reserving a Company Name

Choose a unique company name consisting of at least three words.

You can check name availability through the Ministry of Law and Human Rights online portal ahu.go.id/sabh/perseroan/pesannama or with the help of a local consultant.

Once confirmed, reserve the name via the Online Single Submission (OSS) system. 

The reservation is valid for a specified period and secures the name for your PT registration.

4. Determining Capital Requirements

The minimum paid-up capital for a local PT is based on company size:

• Micro: less than IDR50 million
• Small: IDR50–500 million
• Medium: IDR500 million–10 billion
• Large: over IDR10 billion.

To employ foreign staff, your PT must be classified as medium-size, with a minimum authorized capital of IDR1.1 billion. 

5. Preparing Required Documents

Gather the following essential documents, including identification (passports or KTP for Indonesians) of shareholders, directors, and commissioners, a domicile letter for the business address, and the proposed Articles of Association. 

All documents must be in Indonesian, with English translations optional for reference.

Read more:

Company Registration Number in Indonesia: A Guide for Expats

6. Notarizing the Deed of Establishment

Hire a notary to draft and legalize the Deed of Establishment, which includes the Articles of Association, shareholder details, and business objectives. 

Shareholders or authorized representatives must sign the deed. 

The notary will submit the deed to the Ministry of Law and Human Rights for approval, which may take 1–6 months to ratify the PT as a legal entity. 

7. Registering for Tax and Business Identification

After obtaining the Deed of Establishment, register for a Tax Identification Number (NPWP) with the Directorate General of Taxes and a Business Identification Number (NIB) through the OSS system. 

The NIB serves as a general business license and may include additional permits depending on the business scope. 

These registrations are critical for tax compliance and operational legitimacy.

8. Opening a Corporate Bank Account

Open a corporate bank account in Indonesia to manage company funds. 

Some consultancies offer assistance to open accounts without physical presence. 

Provide the Deed of Establishment, NPWP, and NIB to the bank for account setup.

For foreigners using a nominee arrangement, retaining control of the bank account is essential to ensure proper financial oversight, even without direct legal ownership.

9. Obtaining Additional Licenses

The next step of setting up a PT company in Indonesia is to obtain additional licenses, such as a Business License (SIUP), Environmental Permit (UKL-UPL), or sector-specific permits. 

However, additional license requirements vary depending on your specific business activities.

Consult a local expert to identify all necessary permits.

Read more:

How to Live in Bali Permanently: Everything You Need to Know

10. Maintaining Continuous Compliance

After registering, ensure ongoing compliance by filing monthly and annual tax returns, submitting financial statements in accordance with Indonesian Financial Accounting Standards (SAK), and reporting investment activities (LKPM.

In addition, ensure that all employees are registered with BPJS Kesehatan (Health Insurance) and BPJS Ketenagakerjaan (Employment Insurance) as required by Indonesian law.

Regular reviews of nominee agreements are advisable to mitigate potential risks, considering that the nominee possesses legal title to the assets.

11. Considerations for Foreign Investors

Foreigners establishing a local PT via a nominee arrangement should exercise caution, as the nominee holds legal ownership, thereby presenting potential risks.

Alternatively, a PT PMA allows full foreign control but requires higher capital (IDR10 billion) and stricter supervision. 

It is advisable to use a trusted consultancy service to obtain guidance on safely establishing a PT in Indonesia in compliance with Indonesian regulations.

We hope you find this information on how to set up a PT company in Indonesia helpful!