Setting up a business in Indonesia starts with choosing the right legal vehicle. Through the Ministry of Law and Human Rights, you formalise your company name, structure, and key documents that define how you can operate.
Many foreign founders hear terms like PT, PT PMA, and representative office but are unsure which fits their plans. The wrong choice can limit activities, block licences, or trigger tax and immigration issues later when the business grows.
Investment rules for company registration depend on industry, ownership, and capital. The Ministry of Investment / BKPM publishes guidance on which sectors are open, restricted, or closed, and what foreign shareholders are allowed to do.
A simple local PT can work for Indonesian-owned ventures, but foreign investors usually need a PT PMA to comply with investment caps. Meanwhile, a representative office lets you test the market, yet it cannot generate revenue or sign normal sales contracts.
In practice, many expats rush into nominee PT structures or informal partnerships. Without checking licensing paths, they risk being locked out of permits, facing disputes with local partners, or failing due diligence when they seek funding or exit the business.
This guide walks through company registration Indonesia from a consultant perspective. You will see how PT, PT PMA, and representative offices compare, which risks to avoid, and how to align your plan with the OSS system and future growth.
Table of Contents
- Why company registration Indonesia matters for all investors
- Key legal forms in company registration Indonesi PT and PT PMA
- Choosing between PT PMA and representative office structures
- Licensing and OSS steps in company registration Indonesia today
- Capital and governance in company registration Indonesia
- Real Story — company registration Indonesia for a Bali start-up
- Common mistakes in company registration Indonesia and fixes
- Tax and compliance after company registration Indonesia
- FAQ’s About company registration Indonesia for founders ❓
Why company registration Indonesia matters for all investors
For company registration Indonesia, the legal form you choose decides what activities you may carry out, how much capital is needed, and who may own shares. It shapes everything from work permits to profit distribution and even exit options later.
A PT is a limited liability company under Indonesian law, while PT PMA is a foreign investment PT. A representative office is not a legal entity in Indonesia but a registered presence. Each structure carries different exposure to contracts, debts, and regulatory audits.
Choosing blindly or following a friend’s set-up can be expensive. Restructuring a company, changing shareholders, or converting a representative office into a PT PMA can take months, require new approvals, and expose historic weaknesses in compliance.
Key legal forms in company registration Indonesi PT and PT PMA
For company registration Indonesia, the basic building block is the PT, or Perseroan Terbatas. It suits local PT company registration Indonesia, where all shareholders are Indonesian and the sector is reserved for domestic ownership.
PT PMA company registration applies where foreign shareholders invest through Indonesia’s foreign investment framework as a foreign investment company. Minimum capital rules are higher, reporting is stricter, and business fields must fall within the Positive Investment List.
In some cases, founders combine local PT and PT PMA structures in one group. This can separate regulated activities, manage risk, or meet local ownership thresholds. However, every PT must match its stated business fields and maintain proper records.
Choosing between PT PMA and representative office structures
When planning company registration Indonesia, foreign groups often debate PT PMA versus representative office. The decision turns on whether you will generate revenue in Indonesia or only perform marketing, liaison, or quality control functions.
A representative office registration Indonesia creates a presence but not a full company. It cannot issue invoices, sign normal sales contracts, or book profit locally, and usually acts as a cost centre funded by a head office abroad.
PT PMA, by contrast, trades in its own name, signs contracts, and employs staff directly. It also carries full corporate obligations: accounting, tax filings, and employment law compliance. For serious long-term operations, PT PMA is usually the sustainable path.
Licensing and OSS steps in company registration Indonesia today
Modern company registration Indonesia runs through the OSS system. After the deed of establishment is signed before a notary, you use OSS business licensing to obtain a Business Identification Number and basic licences.
Depending on your sector, you may then need risk-based licences, location permits, environmental approvals, or sectoral registrations. These are all linked to the OSS profile, so inaccurate data in the initial filing can block later approvals.
For PT PMA, investment realisation reports and compliance with minimum capital must match what you declared in OSS. Authorities increasingly cross-check data with tax and manpower systems, so shortcuts at the start tend to resurface in later audits.
Capital and governance in company registration Indonesia
In any company registration Indonesia, capital and governance rules are more than formalities. They determine voting power, dividend rights, and how easily you can bring in new investors or exit through a share sale later.
A PT typically has shareholders, a board of directors, and a board of commissioners. For PT PMA, authorities may expect higher paid-up capital and clearer governance, especially if the business operates in regulated or high-risk industries.
Poorly drafted articles of association can trap founders in deadlock, make it hard to remove non-performing directors, or expose shareholders to claims. It is worth tailoring governance clauses instead of copying generic templates from unrelated sectors.
Real Story — company registration Indonesia for a Bali start-up
Laura, a designer from Spain, planned a small studio in Canggu. She first considered using a local friend’s PT, thinking formal company registration Indonesia was too complex and costly for a new venture with uncertain revenue.
Her consultant explained that using a nominee PT would leave her without legal control, unclear tax status, and serious immigration risk. Instead, they mapped a PT PMA with realistic capital, aligned business fields, and a clear shareholder agreement.
Within months, Laura’s PT PMA obtained OSS registration, tax number, and basic licences. She hired staff legally, signed villa fit-out contracts in her own company name, and could show investors clean corporate documents during later funding discussions.
Common mistakes in company registration Indonesia and fixes
A frequent mistake in company registration Indonesia is treating notaries or agents as one-size-fits-all solutions. They may register a PT PMA or representative office without fully testing whether the structure matches your real business model.
Another issue is ignoring tax and manpower implications. A structure that works on paper may still fail if payroll, withholding tax, and work permit obligations are not budgeted. This is common in service sectors with foreign managers or consultants.
Finally, founders often delay updating corporate data after investment changes, director resignations, or address moves. Incomplete records can block bank approvals, trigger questions in audits, or complicate selling the company or winding it down later.
Tax and compliance after company registration Indonesia
After company registration Indonesia is complete, the real work is ongoing compliance. The company must register for tax, issue invoices correctly, and file returns on time, even during periods when there is little or no activity.
PT PMA entities are usually under closer scrutiny from tax and investment authorities. Investment reports, financial statements, and transfer pricing policies should be consistent. Intra-group services and loans must be documented with clear contracts.
Keeping a compliance calendar for tax, licences, and labour reporting reduces the risk of penalties or sudden inspections. Clean records also increase the company’s valuation if you later seek financing, sell shares, or invite strategic partners.
FAQ’s About company registration Indonesia for founders ❓
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Do I need a PT PMA for every foreign-owned business in Indonesia?
Not always. The need for PT PMA depends on ownership, sector, and planned activities. Some sectors allow minority foreign stakes in local PT, while others require a full PT PMA under the investment rules.
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Can a representative office sign contracts and issue invoices in Indonesia?
No. A representative office normally cannot issue local invoices or book revenue. It handles marketing, liaison, and supervision only, with costs funded by the overseas head office, not local customers.
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How long does company registration Indonesia usually take to complete?
Timelines vary. If documents are prepared and shareholders are aligned, basic company registration and OSS steps can often be completed in weeks, but sector licences and tax setup can extend the overall process.
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Can I convert a representative office into a PT PMA later on?
You cannot simply “convert” it. Usually, you must establish a new PT PMA and then transfer staff, contracts, and assets where allowed. Planning this from the start avoids duplication of effort and extra costs.
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Is there a minimum capital requirement for PT PMA companies?
Yes. PT PMA is subject to higher minimum paid-up capital thresholds than local PT. Authorities review whether your business plan, sector, and investment size are consistent with the foreign investment framework.
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Should I set up company registration Indonesia before applying for visas?
In most cases, yes. Immigration processes are easier when your company registration Indonesia is complete and clean. Work and stay permits often rely on corporate documents, business fields, and tax registrations.
