Company formation in Indonesia

At a glance

Entity

Foreign-investment limited liability company (PT PMA — Perseroan Terbatas Penanaman Modal Asing); minimum 2 shareholders, at least 1 director and 1 commissioner

Corporate tax

22% headline corporate income tax (2026). Listed companies meeting the 40% free-float test get a 3% cut (19%); companies with turnover under IDR 50bn get a 50% rate reduction on the taxable-income portion up to IDR 4.8bn turnover. As of 2026 (PP 20/2026) PT entities can no longer use the 0.5% final-tax UMKM regime.

Incorporation time

~2-4 weeks to a live entity with NIB in a straightforward (open, non-restricted KBLI) case; sector licences, corporate bank account and investor KITAS add weeks

Minimum capital

Paid-up capital reduced to IDR 2.5 billion (from IDR 10bn) under BKPM Reg. 5/2025, effective Oct 2025. A capital-declaration letter is accepted at incorporation; actual deposit follows bank-account opening. Separately, the total investment plan must still exceed IDR 10 billion per KBLI code, excluding land and buildings — and each foreign investor needs ~IDR 10bn shareholding to qualify for an Investor KITAS.

Resident director

No Indonesian-national director is legally required and 100% foreign ownership is allowed in most (open-list) sectors. In practice at least one director should reside in Indonesia to handle day-to-day matters; a foreign director managing operations locally needs a work permit/KITAS. Shareholders and commissioners can be non-resident foreigners.

Audit

Statutory audit by an Indonesia-registered public accountant is mandatory if total assets reach IDR 50 billion, or if the company is listed, issues public debt, or collects/manages public funds; otherwise audit is voluntary. Note: under Permenkum 49/2025 all PTs must hold an AGM and approve an annual report within 6 months of year-end, and larger companies file annual financials with the Ministry.

Remote set-up

Yes — can be formed remotely by granting power of attorney to an Indonesian notary. Foreign shareholder/director documents (passports, corporate documents) must be notarised and apostilled/legalised abroad; KYC on shareholders and directors applies. Physical presence in Indonesia is not required for the entity itself, though bank-account opening and KITAS often require an in-person step.

Government fee

Kemenkumham (Ministry of Law) PNBP for legal-entity ratification is IDR 1,100,000 for companies with capital above IDR 1 billion (which every PT PMA is), plus name-reservation (~IDR 200,000) and State Gazette announcement fees; the OSS-issued NIB and NPWP carry no state fee. Notary fees (typically IDR 3-8 million) are separate and are not a government charge.

Best for

This is built for foreign founders committing real capital to an operating Indonesian business, whether in F&B, tourism, tech, trading or manufacturing. It is not a cheap holding shell. The IDR 10bn investment-plan commitment sees to that.

The process

1. Reserve a company name (min. 3 words) via AHU Online and have a notary draft the Deed of Incorporation (Akta Pendirian) setting out shareholders, KBLI business activities, capital and board
2. Obtain Ministry of Law & Human Rights approval of the deed (SK Kemenkumham / SK Pengesahan), which creates the legal entity
3. Register through the OSS-RBA (risk-based) system to obtain the NIB (business identification number), which simultaneously issues the corporate NPWP (tax ID) and BPJS registration
4. Secure any risk-based sector licences for the chosen KBLI, open a corporate bank account and deposit/declare capital, and arrange KITAS work/stay permits for any resident foreign director