Indonesia has been very attractive to some foreigners in term of business and many foreigners have been showing their interest in establishing a company in Indonesia. The questions arise for this matters are: “Can foreigners establish a company in Indonesia?” or “How do foreigners establish a company in Indonesia?” and many others. To answer these questions, this article will explain on how to establish a company for foreigners in Indonesia in general.
The Indonesian government has issued regulations for foreigners to establish business in Indonesia, which regulated in Law No. 25/2007 regarding Investment. Foreign investors who are interested in making investment in Indonesia are required to comply to all important aspects especially in accordance with applicable regulations.
Based on Law No. 25/2007, one of action that enables foreigner to do a business in Indonesian territory is to establish Foreign Direct Investment (FDI) or also known limited liability company (PT PMA). Foreign Direct Investment is an investment activity made by foreign investors or companies to do a business in Indonesia, both with full-foreign investment or joint ventures with Indonesian investors.
Foreign investors can establish a new PT PMA or acquires an existing PT PMA by having an investment in the company. Refer to Investment Coordinating Board Indonesia, the minimum investment for establishing a company is IDR 10 billion exclude of the value of land and buildings, and IDR 2,5 billion of them must be deposited into Indonesian banks.
In addition, foreign investors must pay attention to what type of business/sectors which are open for foreign investment. The information this type of business/sectors can be found on Presidential Regulation No. 10/2021, regulating about the Negative Investment which determines which sectors are open, partially closed, or closed for foreign investment.
If you have any interests in foreign investment in Indonesia, you can contact us for further information and we will gladly to assist you.
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