Foreign Company Establishment in Indonesia

Introduction

Indonesia has emerged as one of the most attractive investment destinations in Southeast Asia. With a rapidly growing economy, a young population, and supportive government policies, the country offers foreign investors a profitable environment to establish and expand their businesses. Over the past decade, Indonesia has modernized its investment regulations to make the establishment of foreign-owned companies easier, faster, and more transparent.

Key Advantages of Investing in Indonesia

  • Massive consumer market with over 275 million people.
  • Stable economic growth driven by industry, digital economy, and infrastructure development.
  • Strategic geographical position connecting major Asian markets.
  • Reformed investment regulations that facilitate foreign ownership.
  • Full foreign ownership allowed for various business sectors.
  • Growing demand for technology, manufacturing, consulting, logistics, and more.

Types of Companies Available for Foreign Investors

  1. Foreign-Owned Limited Liability Company (PT PMA).
  2. Local Limited Company with Indonesian Partner (PT Local).
  3. Representative Office (KPPA).

Steps to Establish a PT PMA

  1. Define permitted business activities under the Indonesian Investment List.
  2. Reserve the company name.
  3. Prepare the corporate structure and capital details.
  4. Obtain approval from OSS/BKPM.
  5. Open a corporate bank account and deposit capital.
  6. Register tax identification numbers.
  7. Apply for business and operational licenses.

Advantages of Establishing a PT PMA

  • Full or majority foreign ownership depending on business activity.
  • Ability to legally employ expatriates.
  • Eligibility for import/export licenses.
  • Reliable banking system for corporate accounts.