Company Name in Indonesia: Understand the Legal Aspects

Without a good company name, there is no great value in the branding of your business. The longevity of your business depends greatly on the name you choose -- that’s why most entrepreneurs research all aspects of choosing a company name, before making a decision.

However, when choosing a good name for your business, you will also need to consider the legal aspect of a company name in Indonesia.

If you give your company a name that does not comply with Indonesian Law, do not be surprised that your application gets rejected and the process of registration delayed.

In this article, we compile the requirements of choosing a suitable name for your company, especially PT PMA (foreign-owned company), so that your company name can stand out in the minds of your clients, and at the same time does not break the law.

Three is the Magic Number

According to the Ministry of Law and Human Rights in Indonesia, a foreign company name must consist of at least three words. Even though this requirement cannot be found on any official statement issued by the Indonesian government, your application will definitely be rejected if your company name has fewer than three words.

You need to reserve your company name by first applying to the Directorate General of General Legal Administration, through their Legal Entity Information System.

The naming application will then be verified by the mentioned system, to ensure that the name has not been used by other company yet. This same system will also automatically detect and reject company names of fewer than three words.

Every Company Needs a “PT”

PT is the abbreviation for Perseroan Terbatas, and it means Limited Liability Company. Therefore, all company names in Indonesia must be preceded by “PT” once they are approved. This official name that starts with PT will be used in all permits, licenses and transactions owned by the company.

It’s important to know that PT does not count as one of the three words required for a company name in Indonesia. It will precede your three-word (the minimum) company name as an addition.

PT PMA can be Named in English

You can still use an English name if you are a foreign company or PT PMA. It does not matter if this PT PMA is only partially-owned or fully-owned by foreigners. Apart from English, a PT PMA can also be named in other languages.

Local Company can Only be Named in Indonesian

It is compulsory to use Indonesian (or Bahasa Indonesia) to name all business entities owned by Indonesian companies or individuals. Therefore, all local companies PT must be followed by Indonesian names.

Other Important Requirements

In addition to the requirements mentioned above, company names in Indonesia must also meet the following conditions:

1. They are written in the Roman or Latin alphabet.

2. Combination of numbers and letters that do not form a word with meaning is not allowed.

3. Foul languages or words that are against morality are restricted.

4. They shall not be similar to the names of government institutions and existing organisations or companies.

5. They shall not be misleading and must be relevant to the business objectives and activities.

The Final Note

While it is not unlikely to change your company name in the future, we advise you to think your company name through so that it will be permanent. This is because the change of a PT PMA name will also affect many other things such as obtaining a new tax card, and approval from authorities such as BKPM, local tax department, and the Ministry of Law and Human Rights.

It is also recommended that you have two or more proposed names ready for application, in case your first choice of company name gets rejected.

Take your time, and choose your company name in Indonesia carefully. You can also contact Cekindo for further details regarding company name or business setup in Indonesia.

 

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