With its sprawling archipelago, a dynamic population of over 280 million, and a rapidly digitizing economy, Indonesia continues to be a top-tier destination for foreign investment. As a key member of the G20 and the economic powerhouse of Southeast Asia, the opportunities for growth are immense. However, for foreign companies and entrepreneurs, the gateway to this lucrative market is a specific and highly regulated legal pathway: company registration in Indonesia.
For nearly all forms of foreign direct investment (FDI), this means establishing a foreign-owned limited liability company, known locally as a PT PMA (Perseroan Terbatas Penanaman Modal Asing). While the Indonesian government, through initiatives like the Omnibus Law on Job Creation and the Online Single Submission (OSS) system, has made significant strides in streamlining this process, it remains a multi-stage journey involving several government bodies, specific legal documentation, and strict regulatory requirements.
Attempting to navigate this process without expert local guidance is a common mistake that often leads to significant delays, costly errors, and missed opportunities. This definitive guide is designed to demystify the entire procedure. It will provide a clear, step-by-step roadmap for anyone asking how to start a business in Indonesia, covering the crucial pre-registration planning, the complete registration process, and the role of professional legal services in Jakarta in ensuring your market entry is smooth, compliant, and successful.
Before You Begin: Key Pre-Registration Considerations
Before a single document is filed, a thorough planning phase is essential. Answering these foundational questions will determine the viability and structure of your entire Indonesian venture.
1. Understanding the PT PMA: Your Investment Vehicle
A PT PMA is a limited liability company established under Indonesian law, where some or all of its shares are owned by a foreign national, a foreign corporation, or both. It is the only legal entity that allows foreigners to engage in most commercial, revenue-generating activities. It grants the company the same rights and responsibilities as a local company, including the ability to own assets, hire employees, sponsor work permits for foreign executives, and participate in tenders.
2. The Crucial First Step: Checking the Positive Investment List
This is the most critical preliminary step. Indonesia has shifted from a restrictive “Negative Investment List” (DNI) to a more liberal “Positive Investment List” (as per Presidential Regulation No. 10 of 2021 and its amendments). The guiding principle now is:
- All business sectors are considered 100% open to foreign investment, unless specifically restricted.
A professional consultant will analyze your intended business activities against this list to determine your eligibility. The list outlines:
- Priority Sectors: Which are granted fiscal or non-fiscal incentives.
- Sectors Reserved for Cooperatives and MSMEs: Which are closed to foreign investment.
- Sectors with Specific Conditions: Which may have a cap on foreign ownership percentage or require a partnership with a local entity.
Your entire market entry strategy hinges on the classification of your business activity (known by its 5-digit KBLI code) within this list.
3. Meeting the Minimum Capital and Investment Requirements
To ensure that foreign investors are well-capitalized and serious about their ventures, the government sets a high threshold for PT PMAs:
- Total Investment Value: The company must have a total investment plan of more than IDR 10 billion (approx. USD 650,000). This value excludes the cost of land and buildings.
- Paid-up and Authorized Capital: From the total investment, the minimum authorized capital and paid-up capital is IDR 10 billion. This is the amount that must be physically injected into the company’s bank account after its establishment is legalized. Founders must sign a Capital Statement Letter confirming their commitment to inject this capital.
4. Determining the Shareholder and Management Structure
Indonesian Company Law mandates a clear structure:
- Shareholders: A PT PMA must have at least two shareholders. These can be individuals, corporations, or a combination of both (foreign or local).
- Management: The company must have at least one Director and one Commissioner. The Director is responsible for the day-to-day management, while the Commissioner oversees the Director’s activities. These positions can be held by foreign nationals, who will later need to obtain the appropriate work and stay permits (KITAS).
The Step-by-Step Company Registration Process
Once the planning phase is complete, the formal company registration in Indonesia begins. A professional firm will manage this entire sequence for you.
Step 1: Company Name Application and Approval
The first action is to secure a unique company name. The name for a PT PMA must consist of at least three words and cannot be misleading or similar to existing company names, government institutions, or trademarks. Your consultant will submit your proposed names to the Ministry of Law and Human Rights (Kemenkumham) for approval.
Step 2: Preparation of Required Documents
While your consultant prepares the Indonesian legal drafts, you will need to provide key documents from the foreign shareholders:
- For Individual Shareholders: A clear, color copy of their valid passport.
- For Corporate Shareholders: A copy of their Articles of Association (and any amendments) in English, legalized by a public notary and the Indonesian embassy in the country of origin. A document showing the full board of directors is also required.
Step 3: Drafting and Signing the Deed of Establishment (Akta Pendirian)
This is a critical legal step. A Notary will draft the Deed of Establishment, which serves as the company’s constitution. It contains all essential information, including the company name, domicile, business objectives (KBLI codes), capital structure, and the names of shareholders and management. This document must be signed by all founders (or their proxies) in the presence of the Notary.
Step 4: Obtaining Legal Entity Status from the Ministry of Law and Human Rights (Kemenkumham)
After the Deed is signed, the Notary will submit it electronically to the Kemenkumham. Upon approval, the Ministry will issue a Decree of Approval (Surat Keputusan or SK), which officially grants your PT PMA status as a legal entity in Indonesia.
Step 5: Obtaining the Company’s Tax ID Number (NPWP)
Immediately following the Kemenkumham approval, your consultant will register the newly formed company with the relevant Tax Office to obtain its official Tax ID Number (NPWP – Nomor Pokok Wajib Pajak). This is essential for all future tax obligations and financial transactions.
Step 6: Registration in the Online Single Submission (OSS) System
The next major step is to register the PT PMA in the OSS system, which is the centralized government portal for all business licensing, managed by the Ministry of Investment / BKPM (Badan Koordinasi Penanaman Modal).
Step 7: Issuance of the Business Identification Number (NIB)
Once registered in the OSS system, the company will be issued a Business Identification Number (NIB – Nomor Induk Berusaha). The NIB is a revolutionary master key for your business license in Indonesia. It serves as your:
- Company Registration Certificate (TDP)
- Importer Identification Number (API)
- Customs Access Identification (NIK)
Step 8: Obtaining Effective Business Licenses and Fulfilling Commitments
For many industries, the NIB alone is not sufficient to begin commercial operations. Based on the risk level of your chosen KBLI code (Low, Medium-Low, Medium-High, or High), the OSS system will issue a Business License or Standard Certificate. For medium to high-risk sectors, this license will be issued in an “un-effective” state, pending the fulfillment of specific “Commitments” (e.g., obtaining environmental permits, technical approvals, etc.). Your consultant’s job is to manage the fulfillment of these commitments to make your license fully effective.
The Skailaw Advantage: Your Professional Partner for Company Registration
While the steps above may appear linear, each one involves navigating specific government portals, understanding nuanced legal terminology in Bahasa Indonesia, and avoiding common procedural pitfalls that can cause significant delays. This is precisely where professional legal services in Jakarta become invaluable.
A Strategic, Not Just Administrative, Partner
A firm like Skailaw does not simply act as a document processor. Our approach to company registration in Indonesia is strategic from day one.
- In-depth Pre-Consultation: Our process begins with a comprehensive consultation to understand your business objectives. We ensure your planned activities are viable under the Positive Investment List and advise on the most strategic KBLI codes to support your current and future growth.
- End-to-End Project Management: We act as your single point of contact and dedicated project manager. We coordinate with the Notary, liaise with government agencies, and keep you informed at every stage. You are freed from the complexity of the bureaucracy to focus on your core business strategy.
- Speed, Efficiency, and Certainty: Our deep familiarity with the PT PMA establishment process and the intricacies of the Kemenkumham and OSS systems allows us to anticipate requirements, prepare documents accurately the first time, and accelerate the overall timeline.
- Integrated Post-Registration Support: Our service does not end once your business license in Indonesia is issued. As an integrated business advisory firm, Skailaw is uniquely positioned to assist with your ongoing needs, including:
- Corporate Secretarial Services
- Accounting and Tax Compliance
- Work Permit (KITAS) applications for foreign directors
- Mandatory Investment Activity Report (LKPM) filing
Building Your Indonesian Venture on a Solid Foundation
Indonesia’s market holds extraordinary potential for those who are well-prepared. The process to setup a PT PMA is your formal entry into this market—a process that is detailed, regulated, and demands precision. Attempting to navigate this journey without an experienced local guide is a risk that can lead to costly errors and frustrating delays, jeopardizing your entire investment strategy.
Your entry into one of the world’s most promising economies deserves a foundation that is secure, compliant, and efficient. By partnering with a professional firm, you ensure that your business is built correctly from day one, setting the stage for long-term success.
Don’t let bureaucracy stand in the way of opportunity. Contact the experts at Skailaw today to begin your journey of how to start a business in Indonesia on the right legal foundation.