Starting Business in Indonesia

Based on the International Monetary Fund World Economic Outlook, in PPP terms, Indonesia is among the 10th highest of GDP in the World, thus no wonder that Indonesia is the largest economy in Southeast Asia.

As for that, business is good and booming in Indonesia, where Indonesia has shown amazing progress based on the Ease of Doing Business Index.

Thus, it is really interesting to start or open your business in Indonesia.

Business in Indonesia

As in other countries, Indonesia have certain type and/or criteria of business establishment, that each have its own benefits and/or limitations, which are

  1. Permanent Establishment;
  2. Representative Office / Branch;
  3. Indonesian Limited Liability Company.

Permanent Establishment

Permanent Establishment (PE) define as a business forms used by individuals who do not reside in Indonesia or reside in Indonesia no more than 183 (one hundred and eighty three) days in a period of 12 (twelve) months, or entities that not established and not domiciled in Indonesia, to run a business or conduct activities in Indonesia.

For more information about PE, please read here.

Representative Office / Branch

A Representatif Office basically divided into 3 category in Indonesia, which are:

  • Foreign Representative Office (KPPA);

Foreign Representative Office (KPPA) are utilized by foreign companies and/or groups of foreign companies for the purposes of preparing the establishment and development of foreign companies in Indonesia and/or managing its interests in Indonesia. For further information regarding Foreign Representative Office, please read here

  • Foreign Trade Representative Office (KP3A);

Foreign Trade Representative Office take the form as the same as Foreign Representative Office (KP3A), however, KP3A can be a Selling Agent, Manufactures Agent, and/or Buying Agent. For further information regarding Foreign Trade Representative Office, please read here.

  • Public Works Representative Office (BUJKA).

A Public Works Representative Office (BUJKA) basically a Representative Office for Construction companies, to conduct or working on Construction Project in Indonesia. For further information regarding Public Works Representative Office (BUJKA), please read here.

  • Representative Office of a Foreign Oil and Gas Company (KPPA MIGAS).

Companies which are active in the business field of oil and gas may open a KPPA MIGAS representative office, to conduct project and/or work related to Oil and Gas Business Sectors. For further information regarding Representative Office of a Foreign Oil and Gas Company (KPPA MIGAS), please read here.

Indonesian Limited Liability Company (PT PMA)

Conducting your business under the form of Indonesian Limited Liability Company (PT PMA) means that you invest in terms of Foreign Direct Investment.

It is the legal entity through which a foreign investor can conduct commercial activities in Indonesia.

under these forms, you may receive lots of benefits form the tax facilities and/or tax exemptions.

However, It is important to stress that various sectors in Indonesia are closed, or partially closed, to foreign investment. To find out which sectors are open to foreign investment you need to access the Indonesian Negative Investment List.

For further information regarding establishment of Indonesian Limited Liability Company (PT PMA), please read here.

If you have any questions about the establishment of a PT PMA, you can contact us at: info@remidian-bahureksa.com or fill in the form.