Indonesian law does not differentiate between Perseroan Terbatas Penanaman Modal Asing (PMA) companies and domestic companies. This reflects the efforts of Indonesia to attract foreign investment, however its foreign investment regulatory climate is still very rigid.
The Indonesian Investment Coordinating Board (BKPM) is the government body which processes and handles Foreign Direct Investment administration and licensing.
To incorporate a Indonesia company the following is required for the Indonesia Investment Coordination Board:
Before the incorporation process can be started, the company's Deed of Establishment must be approved by the Indonesian Minster of Justice and Human Rights and investment approval by the Indonesian Investment Coordination Board.
The following documents must be notarised in the founders country of domicile and approved by the local Indonesian Embassy who issues a Letter of Notification to the authorities in Indonesia:
Foreign firms are required to acquire a foreign capital license before commencing operations.
There is only one type of company available to foreign investors, a Penanaman Modal Asing (PMA), which is the equivalent to a Private Limited Company.
Company names need to be submitted for approval and must adhere to certain rules laid down by the Indonesia Investment Coordination Board:
We check that your Indonesia company name is acceptable and is not already incorporated with the Indonesia Investment Coordination Board.
Only one director is required for an Indonesian Company, with no restrictions on nationality or residency and corporate directors are allowed.
One company commissioner is required for an Indonesian company, this is the equivalent of a Chief Operating Officer and his role is to supervise the policy and management of the company's board of directors.
The Indonesia Investment Coordination Board requires all PMA companies to appoint a Company Secretary who is resident in Indonesia.
A minimum of two shareholders are required for an Indonesian company. For the first 15 years of operation an Indonesian PMA company can be 100% foreign owned and controlled, so no restrictions are placed on nationality and residency for the first 15 years. Beginning from year 16 an Indonesian shareholder must be appointed, owning at least 5% of the company.
Minimum share capital is IDR 50 million (€5000).
Companies incorporated in Indonesia must set up a Registered office, that gives the company a legal presence in Indonesia but it is not allowed to undertake business transactions or receive payments in Indonesia. Registered offices are primarily to give a physical address where documents may be legally served - we can provide a registered office in Indonesia.
A registered office is issued with government authorisation from the relevant governing body of the industry your business operates, the 5 government offices to authorise registered offices for incorporation PMA companies are:
Annual reports must be prepared and presented at the Annual General Meeting (AGM) by the Board of Directors, the report is only presented once it has been reviewed by the Commissioner. The report should be signed by the entire Board of Directors and the Commissioner and completed within six months of the end of the financial year.
Financial statements must be audited by an accountant, foreign accountants are not legally allowed to practice in Indonesia therefore an Indonesian registered public accountant must be employed.
This information, along with the register of shareholders and directors is available from the registry of companies.
At the end of the financial year, a company is required to save the equivalent of at least 20% of paid up capital from its net profits as a reserve fund. Funds can be either in the form of cash or liquid assets.
An Annual General Meeting is required and can be conducted in person or via video conferencing or other electronic means, providing all participants can see and hear each other directly. The minutes of an AGM must be recorded and signed by all participants.
Once incorporated we provide a set of corporate documents for your Indonesia company which, includes the Certificate of Incorporation, Memorandum of Association the Articles of Association and share certificates. Copies of the company incorporation documents are sent via email and the originals from the companies registry are sent to you in a corporate folder.