Want to expand a business in Indonesia? Before starting a business in Indonesia, you need to collect information about the types of companies in Indonesia. The type of company you choose may affect some areas such as business field, investment, taxation, permit, and so on.
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Types of Companies in Indonesia
There are three types of companies commonly used by business actors in Indonesia:
1. Local Company in Indonesia (PT PMDN)
The main characteristic of a Local Company in Indonesia is 100% share owned by a local. However, it is still possible for a foreigner to have share ownership by using the under-name method. The authorized capital smallest amount is IDR 50 million with 25% paid-up capital. Owning a local company has more advantages compared to other types of companies. In addition, a local company can carry out a more comprehensive range of business fields and activities.
2. Foreign Investment Company in Indonesia (PT PMA)
Different from a local company, a PT PMA in Indonesia’s ownership share can be 100% owned by a foreigner with minimum authorized capital is IDR 10 billion. A very vital thing that needs to do before establishing a PT PMA in Indonesia is to check the Negative Investment List (in Indonesia shorten as DNI). The DNI contains foreign investment limits related to company business classifications updated actively from time to time. Please stay updated.
3. Foreign Representative Office in Indonesia (KPPA)
A KPPA in Indonesia is a foreign representative office to manage business activities. In addition, it is to evaluate the market conditions and investors. It is such an important step before starting to establish a company in Indonesia. A KPPA in Indonesia must have the same name as the parent company. Above all, there are limitations of the KPPA activities, such as:
1. Not allowed to sign any contract
2. Receive payment
3. Have another license beside it given
Do you want to establish a foreign company in Indonesia? Please read the comprehensive information here.
