How to Set Up a PT Company in Indonesia: A Complete Guide

Setting up a PT (Perseroan Terbatas) company in Indonesia is an essential step for businesses looking to establish a legal presence in the country. A PT company is a limited liability entity, making it a preferred choice for both local and foreign investors. Whether you are an entrepreneur, investor, or business owner, understanding the process, legal requirements, and necessary documents is crucial to ensure a smooth setup. In this guide, we will provide a step-by-step approach to establishing a PT company in Indonesia.

Understanding PT Company in Indonesia

A PT company in Indonesia is a limited liability company that is governed by Indonesian corporate law. There are two types of PT companies:

  1. Local PT Company: Owned 100% by Indonesian nationals.

  2. Foreign-Owned PT (PT PMA): Allows foreign ownership, subject to investment regulations and restrictions in certain business sectors.

For foreign investors, a PT PMA is the most suitable option as it provides legal recognition and allows business activities in Indonesia.

Requirements for Establishing a PT Company

Before starting the process, it is important to meet the following requirements:

  • Minimum Capital: The required minimum capital depends on the company type. A PT PMA usually requires an investment plan of at least IDR 10 billion.

  • Business Classification: The company’s business activities must comply with the Indonesian Standard Industrial Classification (KBLI).

  • Registered Office Address: A physical business address is mandatory for registration.

  • Company Name: Must be unique and approved by the Ministry of Law and Human Rights.

  • Board of Directors and Commissioners: At least one director and one commissioner are required.

Step-by-Step Process to Set Up a PT Company

Step 1: Reserve a Company Name

The company name must be unique, not similar to existing businesses, and approved by the Ministry of Law and Human Rights. The name reservation is conducted through the online system provided by the government.

Step 2: Prepare the Articles of Association

The Articles of Association outline the company’s structure, objectives, and governance. This document must be drafted by a notary and signed by the shareholders.

Step 3: Obtain Deed of Establishment

Once the Articles of Association are finalized, a notary will submit them to the Ministry of Law and Human Rights for approval. The ministry will issue a Deed of Establishment, confirming the legal status of the company.

Step 4: Obtain Business Identification Number (NIB)

The Business Identification Number (Nomor Induk Berusaha – NIB) is obtained through the Online Single Submission (OSS) system. The NIB serves as the primary business license, allowing the company to operate legally.

Step 5: Obtain Business Licenses and Permits

Depending on the business activities, additional permits may be required, such as:

  • Location Permit

  • Environmental Permit

  • Sector-Specific Licenses (e.g., tourism, manufacturing, or finance licenses)

Step 6: Register for Tax Identification Number (NPWP)

All companies in Indonesia must obtain a Taxpayer Identification Number (NPWP) from the Directorate General of Taxes.

Step 7: Open a Corporate Bank Account

A business bank account is necessary for financial transactions. Most banks require the company’s legal documents, NPWP, and identification of shareholders.

Step 8: Register Employees with Social Security

If hiring employees, companies must register with the Social Security Administration (BPJS) for health and employment benefits.

Costs Involved in Setting Up a PT Company

The cost of setting up a PT company varies based on the business sector, capital investment, and legal services required. Key costs include:

  • Notary and Legal Fees

  • Business Licensing Fees

  • Government Processing Fees

  • Minimum Capital Investment for PT PMA

Benefits of Setting Up a PT Company in Indonesia

  • Legal Protection: Limited liability ensures that personal assets are separate from business liabilities.

  • Ease of Business Operations: A PT company allows for structured business activities and compliance with regulations.

  • Access to Local and International Markets: Foreign-owned companies can conduct business legally and expand in Indonesia.

Common Challenges and How to Overcome Them

Bureaucratic Complexity

The registration process involves multiple government agencies, which can be time-consuming. Hiring legal professionals ensures compliance and smooth processing.

Sector-Specific Restrictions

Some industries have foreign ownership limitations. Consulting with experts helps determine the best structure for business operations.

Capital Requirements

Foreign-owned companies must meet investment requirements. Proper financial planning is essential for long-term sustainability.

How The Bali Lawyer Can Help

The Bali Lawyer specializes in company registration and legal services for businesses in Indonesia. Our experienced team provides end-to-end assistance, ensuring your PT company setup complies with all regulations.

Our Services Include:

  • Company Name Reservation

  • Deed of Establishment and Notary Services

  • Business Licensing and Permits

  • Tax Registration and Compliance

  • Legal Consultation and Corporate Compliance

 

Setting up a PT company in Indonesia involves multiple legal and administrative steps. Proper planning and legal guidance are essential for a successful business setup. The Bali Lawyer offers professional assistance to navigate the regulatory landscape and establish your company efficiently. Contact us today for expert support in setting up your PT company in Indonesia.