Get to know more about business processes and the needed paperwork in Indonesia!
If it seems like you can not find the answer here, we will be happy to answer your questions directly.
Business Visa and Work Permit
How long is the process? How long will my visa be valid?
The business visa in Indonesia is valid for 2 months (single entry) or 1 year (multiple entries) however every 60 days you need to leave Indonesia (this process can be done even in one day). The application process can be fast and entirely done online here on the webpage. Delivering a business visa will take 7 working days. The work visa (KITAS) are valid for 1 year (Director and Commissioner position) or 6 months (all the other positions in the company). The whole process takes 2 months, however, after one month, you can travel to Indonesia where the process will be finalized.
Who will be my visa sponsor in Indonesia? Can it be an individual person?
Regarding business visa and work visa (KITAS), the sponsorship shall be a company which invites you to Indonesia due to a business meeting/ conference/ etc., or company which you work for in Indonesia.
Am I able to obtain the business visa or work visa easily?
Yes, here on the CBC webpage, you can apply and handle the whole application process online and fast.
Is it possible to use the business visa to work in Indonesia?
Business visa is applicable for a foreigner who intends to visit Indonesia due to business meeting purpose (meeting, attending seminars, doing presentation, etc.) while the work visa (KITAS) is applicable for foreigners who intend to work legally and obtain revenue (salary) in Indonesia. Therefore, a business visa is not suitable for working in Indonesia.
What is a shelf company?
Shelf companies are corporate entities that have been established by a company provider, This provider already holds the company until a buyer is found.
What is the difference between a shareholder and a director?
The shareholder is the person who owns the company through a share certificate. Generally, a company can be owned by one or several shareholders. And the director is the person responsible for the management of the company.
Can I open bank account in Indonesia?
Based on the local regulation issued by Indonesian national bank you need to have work visa if you would like to establish a personal bank account in Indonesia and you need to have company in Indonesia if you would like to establish company bank account here. Times to times some banks can make an exemption related to the client’s creditworthiness and history.
Will foreigner be able to become a Director or Commissioner?
As PMA, the foreigner will be able to become the company Director (the foreigner will need work visa) as well as Commissioner (the foreigner does not need a work visa if he does not stay in Indonesia) while in PT Local, the foreigner will be able only to become the company Director. However, Cekindo can suggest you have at least 1 local Director in the company to ensure that you all operations are going smoothly.
Will government check if i have invest IDR 10 Billion?
As PMA, you have to prepare and submit for Investment Activity Report (LKPM) which government will check your investment development. You will be able to fulfil the investment within maximum 5 years or the PMA shall be closed.
When i have to put the money into the bank?
You can establish your company bank account once the company is established. The minimum paid-up capital shall be deposited after the company is established and has own bank account.
Will i able to hold 100% ownership of PMA?
Following Presidential Regulation Number 44 the year 2016, there are some sectors which fully (100%) open, partly (certain percentage) open, or even close for foreign ownership. As an example, the trading company is open for 100% foreign ownership while distributing company only open for 67% foreign ownership and retail company is closed for foreign ownership. You can tell us your detailed business plan then we will analyze it. In case you can not own 100% of your company, you can alternatively use local nominee service which should be performed by a professional consulting company.
What kind of company that most suitable for me?
There are 3 types of company which are common: PMA, PT Local and Rep Office. We can’t confirm which company is the most suitable for you before we understand your business. If you are foreigner, probably the most beneficial for you will be PMA company (limited liability company with foreigner ownership). However, the company share depends on your business field (please clarify in negative investment list) and the main requirement is to invest above IDR 10 billion. If you want to avoid to invest big money, alternatively you can set up PT local. Which is normally suitable just for local citizen however you can use local nominee service to secure your ownership. By this option, you will get as well more flexibility in your business since requirements for local PT are not too strict and you can do in more business files. In addition, if you intend to conduct initial research in Indonesia without any minimum investment then you can set up Rep Office.
I would like to expand business in Indonesia. Should I set up a company?
It would depend on your intention and business field. E.g. If you intend to do product distribution in Indonesia, then you could set up a company or alternatively appoint a reliable local partner to become your distributor in Indonesia. Each alternative has some advantages and disadvantages. If your products request registration in Indonesia than you can register all your products under your own company and keep your business more safe and flexible and cooperate with more distributors in Indonesia however if you appoint some distributor, he will register your products and than you need to consult all activities on the Indonesian market with this distributor first since he will be the official importer and distributor in Indonesia. If you will register a company in Indonesia you will get also a lot of other benefits such as to sponsor your foreign employees under your company, establish a bank account, etc.
Accounting, Tax and Payroll
Is there any obligation regarding company payroll?
Currently, all companies in Indonesia shall be registered to BPJS as mandatory Indonesian insurance which will affect the employee payroll. There will be a certain percentage which shall be borne by the company as well as the employee.
My company has tax id, however I never submit tax reporting. Will my company in the trouble?
There will be an administrative penalty by the tax office for delaying or not filing a tax report. To avoid this, it is best to hire a local third party to handle your taxation matters in Indonesia.
Currently my company has established but with no activities, should i report the company taxation?
After your company is established, it is mandatory to submit monthly report although you have no activities and zero taxes.
If my Indonesian company will register the product, what is the requirement?
Beside register the product, you have to obtain the Import license and NIK due to importation activity.
How if my product has been registered under local distributor and we intend to transfer the license into our company or other distributor?
The process will be a little bit complicated since it depends if your current distributor was willing to revoke the license or not since they have rights regarding the license. Therefore we always suggest a client select a reliable local partner in Indonesia. In case the distributor does not agree to revoke the license you need to discuss with relevant institution to release this registration or wait once the registration expires.
Is it safe if I register the product under local distributor?
If you will appoint a local partner (distributor) to distribute but also hold the product license for you. It means that he become the official importer & distributor and nobody else can directly import and distribute your products in Indonesia. You should select your partner very properly since the local partner will hold the license for years. if your partner does not perform well, you cannot change them freely.
My company intends to distribute product in Indonesia, what are the regulation?
Please be informed if foods, beverages, cosmetics, as well as drugs which will distribute into Indonesia, it shall be registered to BPOM first. The registration can be done just under Indonesian legal entity such as your own Indonesian company or local partner who will be your product license holder. If you do not have own company in Indonesia, we suggest you to use come independent consulting company for product registration to ensure security and flexibility of your business with the option to use more local distributors.
How can we get continuous update on this emerging regulation (Halal Law)?
Please see the updated news from our website.
What are the stages gearing towards the implementation of Halal Law in Indonesia for cosmetics and at what stage is this process?
Based on current RPP (draft of government regulation), there will be 3 periods. If the 1st year/period will start in 2016 for food and beverages, for the cosmetics will start in 2017 (cosmetics is a part of the 2nd year/period) and for medicine will start on the 3rd year/period.
The regulation followed in Indonesia is EU, FDA or both?
How do SPF products regulated in Indonesia? Any special requirements for registrations?
The ingredients used for sunscreen/sunblock is limited. If you want to use new ingredients, you need to enclose the research report and scientific journal to prove that those new ingredients are beneficial as sunscreen product. Currently, there is no English version available for the SPF products regulations, but you can find the SPF regulation in the Indonesian language attached.
How cosmetic ingredients are regulated in Indonesia? Any import registration required for cosmetic ingredients?
Yes. The distributor must obtain the Import License and register the product under Indonesian FDA.
What is in need to pass an FDA inspection in Indonesia, other than the documents provided for registration?
The material of the product does not contradictory with the statutory provisions in force in Indonesia.
Can you share how the Halal Law will affect cosmetic importers?
Several tests will be conducted before the product imported to Indonesia if the product classified as the non-halal product (because there are raw material)
Can you please advise if cosmetics indicating SPF 30 or higher are still classified as cosmetics? Are there any specific requirements for products containing sunscreen actives?
Yes, it’s still classified as cosmetics. The requirements depend on the products, which is different for each product.
Does a dietary supplement also need a Halal certificate in Indonesia?
Yes, it does. Because dietary supplement categorised as a product, so it needs to obtain Halal Certificate.
Is there any specific regulation on the prohibited substances used in cosmetic formula? or Indonesia adapts 100% ASEAN guidelines?
Technical requirements for cosmetics ingredients which is listed materials that permitted to be used in cosmetics with restrictions and conditions of use are mention on the regulation of The Head of National Agency for Drug and Food Control No. 18 the year 2015.
Are you required to put physical manufacturer’s name and address on products, or will brand owner name and address be enough (i.e. responsible person in EU)?
Manufacture and distributor name will be put on the product.
You said on page 16, halal certification is not mandatory for cosmetic yet. Do you expect this coming and yes when?
Based on current RPP (draft of government regulation), there will be 3 periods. Halal requirements for cosmetics will start in 2017 if the first period starts in 2016.
Do the warnings and use directions need to be in Indonesian? Or is English okay?
Product information is written in bilingual or Indonesian.
I understand all products will need to be Halal shortly. Please explain the requirements of ingredients to allow them to be used in Halal products. What things are allowed & what are not?
Based on Article 17, Law of Republic of Indonesia no. 33/2014 concerning Halal Product Assurance, the material used in the Halal Product Process (PPH) consists of raw material, process material, additional material, and auxiliary material. The material originates from animal, plant, microbe, or material that is obtained through chemical, biological or genetically modified process. Material which originates from an animal item is basically halal, except when it is haram according to sharia law. The material originated from an animal that forbidden including corpse, blood, pig, animal that is slaughtered not in accordance with sharia and other material that determined by the Minister based on MUI fatwa.
One of the product document required is Domicile Letter. What exactly is meant by Domicile Letter?
Domicile Letter (SKDP) is a letter that explains the domicile or habitual residence of a company. SKDP issued by the local government (signed and stamped by the district, sub-district, and village/local community government where your company office will be located).