Indonesia is proud to have one of the best-performing economies in the world and the largest economy in Southeast Asia. In 2019, the GDP per capita of Indonesia was recorded at approximately US$3,847.
Apart from the favorable economy, foreign investors are so interested in investing in Indonesia because of the loosen policy of obtaining an investor KITAS, low startup costs, and encouraging huge government support.
Foreigners can now work right away with an investor KITAS that can be applied through a simple process of the Online Single Submission (OSS) system in Indonesia.
Read on to find out how to invest in Indonesia if you are a foreign investor.
Ways to Invest in Indonesia
Indonesia presents substantial opportunities for foreign businesses to invest in. A great number of small, medium and large organisations are interested in Indonesia’s emerging and established markets.
Foreign businesses considering doing just that can select the most suitable legal structure for their presence in Indonesia.
Therefore, in terms of the legal entity type, you need to determine the best fit for your business objectives and goals. The following are the major legal structures on how to invest in Indonesia.
Differences between Local PT and PT PMA
You can differentiate a PT PMA from a local PT according to their various characteristics:
Local PT
- Can only be fully owned by one or more Indonesian citizens or Indonesian legal entities
- A limited liability company
- A minimum of 1 director, 1 commissioner, and 2 shareholders
- Four important trading licenses are micro SUIP, small SUIP, medium SUIP, and large SUIP
PT PMA
- A form of legal entity most commonly used by foreigners or foreign companies to carry out commercial activities in Indonesia
- A limited liability company
- A minimum of 1 director, 1 commissioner, and 2 shareholders. At least one shareholder is required to be a foreign individual or foreign entity
- Minimum capital investment is IDR 10 billion
- Minimum paid-up capital is 25% of the minimum capital investment
Investing in Indonesia Easily with a Representative Office
The Indonesian authorities have been making as easy as possible for foreigners to start a business in Indonesia through the establishment of a representative office. A representative office in Indonesia is a cheaper and easier way to establish than other types of presence in the country.
Different types of the available representative office in Indonesia are stated below:
1. Foreign Representative Office (KPPA)
KPPA is a general representative office to make your market entry in Vietnam. It is often established for the parent company’s management purpose.
2. Foreign Construction representative office (BUJKA)
A BUJKA is slightly different from KPPA and KP3A and is set up for organisations conducting business activities in construction areas. The license required for BUJKA is SIUJK.
3. Foreign Trade Representative Office (KP3A)
A KP3A can perform activities similar to KPPA and can also serve as selling and/or buying agents. However, it still cannot conduct sales on its own.
How to Invest in Indonesia with Cekindo’s Assistance
Cekindo has significant experience in handling the requirements of foreign businesses looking to know how to invest in Indonesia. The main mode of investment in Indonesia is by registering a company – from large international organisations right through to smaller businesses, representative offices to branches.
Cekindo has been serving as a company registration specialist in Indonesia for many years. We have helped thousands of overseas businesses set up their business in compliance with Indonesian laws and regulations. We are able to scale our services to fulfill your special needs.
Get in touch with Cekindo for further discussion. Fill in the form below.
