Company Establishment in Indonesia: What It Costs and How It Works
Company establishment in Indonesia for a foreign owner almost always means setting up a PT PMA, a limited liability company that can be 100% foreign owned in most business sectors. You need a minimum investment plan of IDR 10 billion per business line, a registered KBLI code, a company address, and registration through the OSS system to get your NIB. A straightforward setup handled by a lawyer takes four to eight weeks and costs roughly USD 1,500 to USD 3,500 in professional and government fees, more if your sector needs sector licenses on top of the base registration.
Contents
- What a PT PMA Is and Who Actually Needs One
- Company Establishment in Indonesia: Cost Breakdown
- Can Foreigners Own 100% of a Company in Indonesia
- How Long Company Registration Actually Takes
- What a KBLI Code Is and Why It Decides Everything
- PT PMA vs Local PT: Which One You Need
- Documents You Need Before You Start
- Mistakes That Get Licenses Suspended
- After Registration: KITAS, Tax and Reporting
- FAQ
What a PT PMA Is and Who Actually Needs One
A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the standard legal vehicle for company establishment in Indonesia when there is any foreign shareholding, even 1%. It is a separate legal entity, it can own assets, sign contracts, employ staff, sponsor work permits, and hold a long-term lease or Hak Guna Bangunan title on land. If you plan to run a villa rental business, a restaurant, a consulting practice, an import operation or basically anything beyond informal freelance work in Indonesia, you need this structure. Running a business on a tourist visa or through a friend's local company is not a workaround, it is the single most common way foreigners end up with a frozen bank account or a business they do not legally control.
Company Establishment in Indonesia: Cost Breakdown
The government fees for a PT PMA are modest. Most of what you pay covers notary work, OSS filing, legal structuring and the registered address you need to list the company against. Prices below are typical ranges for a single-KBLI, low to medium risk business in Bali or Jakarta. Confirm the exact figure with your lawyer once your KBLI and shareholding structure are fixed, because sector-specific licenses can add significantly to this.
| Item | Typical cost range (USD) | Notes |
|---|---|---|
| Deed of establishment and notary fees | 400 to 900 | Scales with number of shareholders and amendments |
| Legal and administration fee (lawyer or agent) | 700 to 2,000 | Covers OSS filing, NIB, NPWP, structuring advice |
| Registered company address (annual) | 300 to 1,500 | Virtual office only works for certain KBLI, see below |
| Sector license on top of NIB, if required | 500 to 3,000+ | Applies to F&B, tourism, construction, education and similar |
| Investor KITAS for one director (optional, separate process) | 1,000 to 1,800 | Often done right after company setup |
| Total for a simple single-KBLI setup | 1,500 to 3,500 | Excludes sector license and KITAS |
Paid-up capital is a separate number from these fees and it is not a fee you pay to an agency, it is money you deposit into the company's own Indonesian bank account as working capital. Regulation generally requires a minimum investment plan of IDR 10 billion per KBLI business line (excluding the value of land and buildings) with at least 25% of that paid up at incorporation, so around IDR 2.5 billion. There are exceptions for certain micro, small and medium enterprise classifications and for some specific sectors, so this is the figure to confirm against your exact KBLI before you commit capital.
Can Foreigners Own 100% of a Company in Indonesia
Yes, for most business sectors, under the Positive Investment List introduced in 2021. This replaced the old Negative Investment List and opened the large majority of KBLI codes to 100% foreign ownership. A smaller number of sectors, including some related to media, certain agriculture, and a handful of strategic industries, still require a local partner or cap foreign ownership at a set percentage. The only way to know for certain is to check the current classification against your exact KBLI code, because the list is reviewed and sectors move in and out of restriction.
How Long Company Registration Actually Takes
For a standard low or medium-low risk business with one KBLI code, expect four to eight weeks from signed documents to a working NIB. Complex cases, multiple KBLI codes, high-risk classifications that need sector approvals, or a shareholding structure involving a foreign corporate entity instead of individuals, can run two to four months. The table below gives a realistic sequence.
| Stage | Typical duration |
|---|---|
| Name reservation and deed of establishment | 3 to 7 days |
| Ministry of Law approval (SK Kemenkumham) | 5 to 10 days |
| Tax registration (NPWP) | 2 to 5 days |
| OSS registration and NIB issuance | 5 to 15 days |
| Sector license, if your KBLI requires one | 2 to 8 weeks additional |
If someone quotes you company establishment in Indonesia in under two weeks for a KBLI that normally needs a sector license, ask them exactly which licenses are included, because a bare NIB without the operational license underneath it does not let you legally trade.
What a KBLI Code Is and Why It Decides Everything
KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) is the standard business classification code system, and it is the single most important decision in your setup. Your KBLI determines your minimum capital, whether you need a local partner, which risk tier you fall into under the OSS Risk Based Approach, which licenses sit above your NIB, and legally, what you are allowed to do. A villa rental business and a general property management business are different KBLI codes with different rules. We see businesses register under a broad, convenient-sounding code and then find out eighteen months later that the activity they are actually running needs a different one, which means re-registering and sometimes re-licensing from scratch.
PT PMA vs Local PT: Which One You Need
If there is any foreign shareholder, a PT PMA is the required structure, full stop. A local PT (PT PMDN) is for Indonesian-owned businesses only, and it cannot legally have a foreign name on the shareholder register, not even at 1%. Nominee arrangements, where an Indonesian individual holds shares on paper for a foreign beneficial owner, are not a recognised legal structure and carry real risk if a dispute ever reaches court, because the nominee agreement itself has no standing under Indonesian company law.
| PT PMA | Local PT (PT PMDN) | |
|---|---|---|
| Foreign ownership | Up to 100% in most sectors | Not permitted |
| Minimum investment plan | IDR 10 billion per KBLI (typical) | No fixed minimum under this rule |
| Can sponsor foreign KITAS | Yes | No |
| Typical use case | Any business with a foreign shareholder | Indonesian citizens only |
Documents You Need Before You Start
- Passport copies of all shareholders and directors
- Proposed company name, checked for availability before the deed is drafted
- Chosen KBLI code or codes, confirmed against your actual planned activity
- Shareholding structure and percentages, and a corporate shareholder's own registration documents if applicable
- Registered address in Indonesia matching your KBLI's zoning requirements
- NPWP for each individual shareholder and director, or proof it will be obtained
- Bank reference or proof of funds for the paid-up capital deposit
If you are entering Indonesia specifically to sign documents or open the bank account, most people use a visit visa for this, and our guide to the B211A visit visa covers what that visa does and does not allow you to do while your company is being set up.
The most expensive mistake we see: registering under a KBLI code chosen for convenience rather than accuracy, then operating a different activity. The company trades for a year or two, then a license audit, a bank compliance check, or a partner dispute surfaces the mismatch. At that point you are not just paying to amend the KBLI, you may be re-applying for the operational license, repaying capital shortfalls, and in some cases facing a suspended NIB while trading stops. Get the KBLI right before the deed is signed. It is far cheaper to spend an extra hour on this at the start than to fix it later.
After Registration: KITAS, Tax and Reporting
Getting the NIB is not the finish line. A PT PMA needs to file LKPM, the investment realisation report, on a regular basis, usually quarterly in the first years, and failing to file is one of the more common reasons an NIB gets flagged or revoked even when the business itself is operating fine. The company also needs monthly and annual tax filings regardless of whether it is profitable yet.
Most foreign owners also want to live in Indonesia to run the business day to day, which means applying for an investor or work KITAS sponsored by the new company. Our pages on the work KITAS visa and the broader work permit and residence visa process walk through what the company needs to have in place before it can sponsor that application, and if you are bringing a spouse or children, the family KITAS visa page covers dependent sponsorship separately.
If your business has a brand name, logo or product name you care about, register it early. Trademark applications in Indonesia run on a first-to-file basis, not first-to-use, so a competitor or a squatter can file your name before you do. Our trademark registration guide covers the process and cost. And if the business needs a physical premises built or renovated, for example a restaurant fit-out or a villa conversion, check our PBG building permit guide before signing a lease, because an address that looks fine for registration purposes is not automatically zoned for the construction or renovation work you plan to do on it.
FAQ
How much does it cost to set up a company in Indonesia?
Professional and government fees for a straightforward PT PMA with one KBLI code typically run from USD 1,500 to USD 3,500. Separate from this, you need paid-up capital of roughly IDR 2.5 billion deposited into the company's own bank account, based on the standard minimum investment plan of IDR 10 billion per KBLI. Sector licenses and an investor KITAS, if needed, add further cost on top of these figures.
Can a foreigner own 100% of a company in Indonesia?
Yes, in most business sectors, since the Positive Investment List replaced the old Negative Investment List in 2021. A minority of sectors still require a local partner or cap foreign ownership at a set percentage. Whether your specific business qualifies for 100% ownership depends entirely on the KBLI code assigned to your activity, so this needs to be confirmed before you structure the shareholding.
How long does it take to register a company in Indonesia?
A standard low or medium-low risk PT PMA with one KBLI code typically takes four to eight weeks from signed documents to a working NIB. Businesses that need a sector license on top of the base registration, such as food and beverage, tourism or construction, commonly take two to four months in total once the additional licensing step is included.
Do I need a local partner to start a business in Bali?
Only if your specific KBLI code falls into a restricted category under the current Positive Investment List. The large majority of sectors foreigners operate in Bali, including hospitality, consulting, retail and property management, allow 100% foreign ownership through a PT PMA. A local partner is a legal requirement in restricted sectors, not a general rule, and should never be arranged informally through a nominee agreement.
What is a KBLI code and why does it matter?
KBLI is Indonesia's standard business classification system, and every PT PMA must register under one or more KBLI codes that match its actual activity. The code determines your minimum capital requirement, your risk tier under the OSS system, whether a sector license sits above your basic NIB, and whether foreign ownership is capped. Choosing a KBLI that does not match what the business actually does is the most common reason licenses later get flagged.
What is the minimum capital to set up a PT PMA?
The standard rule requires a minimum investment plan of IDR 10 billion per KBLI business line, excluding land and buildings, with at least 25% of that, around IDR 2.5 billion, paid up at incorporation. Some sectors and some micro or small business classifications have different thresholds, so confirm the figure against your exact KBLI code before transferring capital.
Can I run a business in Indonesia on a tourist or visit visa instead of setting up a company?
No. A tourist or visit visa does not authorise business activity, employment or income generation in Indonesia. Operating informally, or trading through a friend's company or a nominee structure, leaves you without legal control of the business, without the ability to open a proper corporate bank account, and exposed if immigration or tax authorities review the arrangement. Company establishment through a PT PMA is the legal path for any ongoing commercial activity.
What happens after the company is registered?
Registration gives you the deed, the NPWP and the NIB, but the company then has ongoing obligations: monthly and annual tax filing, and periodic LKPM investment realisation reporting, usually quarterly in the early years. Many owners also apply for an investor or work KITAS at this stage so they can legally live in Indonesia and manage the business directly, sponsored by the new company.
Setting up a PT PMA correctly from the first filing saves far more time and money than fixing a mismatched KBLI or a missed report later. If you want the specifics checked against your exact business plan before you commit capital, see our full range of legal services or get in touch through our team page to discuss your structure directly.