How to Open a Company in Indonesia in 2025

Indonesia is Southeast Asia’s largest economy, with a projected GDP of USD 1.43 trillion in 2025 and a population of over 285 million. With a rapidly expanding digital economy and strong growth in sectors like ecommerce, fintech, manufacturing, and logistics, it continues to draw attention from global entrepreneurs and foreign investors.

But opportunity comes with complexity.

Despite reforms like the OSS (Online Single Submission) system and a Positive Investment List that opens certain sectors to foreign ownership, Indonesia remains a challenging jurisdiction for first-time entrants. High minimum capital requirements, sector-specific restrictions, and bureaucratic inconsistencies can create friction for SMEs or startups used to more flexible markets.

In this guide, we’ll walk you through how to open a company in Indonesia and lay out the legal options, requirements, and practical realities, so you can make a decision based on your business goals and risk tolerance.

Foreign entrepreneurs can enter the Indonesian market through one of three types of business structures: Foreign-Investment Limited Liability Company, Local Limited Liability Company, and Representative Office.

The table below provides a high-level comparison:

Each of these business types comes with its own advantages and limitations, along with a unique registration process.

In the sections that follow, we’ll take a closer look at the PT PMA, Local PT, and Representative Office, so you can choose the right structure for your business goals and understand what’s required to get started.

A Foreign-Investment Limited Liability Company (also known as Perseroan Terbatas Penanaman Modal Asing or PT PMA) is the standard legal entity for foreign entrepreneurs who want full ownership and operational control of an Indonesian company.

It is the only business structure that allows a foreign-owned company to operate independently in Indonesia and generate revenue, sign contracts, and hire staff without a local nominee.

✅ Full foreign ownership in most sectors under the Positive Investment List

✅ Ability to generate revenue and enter into binding contracts

✅ Eligible to hire foreign employees with company-sponsored work permits

✅ Same legal status and protections as a local company

❌ High minimum capital requirement: IDR 10 billion (approx. USD 605,000), making Indonesia less accessible to early-stage founders compared to jurisdictions like Singapore or Hong Kong

❌ Some sectors (e.g. broadcasting, media) are still partially restricted or require local partnerships

❌ Limited to business activities approved in your investment licence (NIB)

❌ Bank account setup often requires director's presence in Indonesia

Setting up a Foreign-Investment Limited Liability Company (PT PMA) in Indonesia involves several steps and coordination with multiple government agencies.

Below is a detailed walkthrough of the process:

1. Reserve your company name through the Ministry of Law and Human Rights (AHU). It must be unique, written in Roman characters, and aligned with the Klasifikasi Baku Lapangan Usaha Indonesia (KBLI) for your intended business activity.
2. Prepare and notarise the Deed of Establishment with a licensed notary, which includes your company name, objectives, capital structure, shareholder list, and officer appointments.
3. Submit the Deed of Establishment to AHU. Upon approval, AHU will issue a Decree of Approval (Surat Keputusan Pengesahan), which officially grants your company legal entity status in Indonesia.
4. Secure a domicile letter from the local subdistrict office to confirm your registered business address. This document may still be required by banks, tax offices, and regional authorities.
5. Register for a Tax Identification Number (NPWP) at the local tax office. This is needed for opening a bank account, filing corporate taxes, and issuing VAT invoices if applicable.
6. Apply for a Business Identification Number (NIB) via the OSS (Online Single Submission) system. The NIB acts as your primary business licence and automatically registers your company for customs, social security (BPJS), and other systems based on risk category (GR 28/2025).
7. Open a corporate bank account with an Indonesian bank. Prepare your Deed of Establishment, AHU approval, NPWP, and director ID. Some banks require the authorised signatory to be present in person.
8. Inject the capital investment (IDR 10 billion) into the company's bank account. Report this, along with your investment plan, to the Investment Coordinating Board (BKPM) via the OSS portal.
9. Apply for additional licences if your business activity is classified as medium- or high-risk. This may involve further approvals from sectoral ministries or local authorities.

The business registration for a PT PMA company can take about 2 to 6 weeks, assuming your documents are ready and your business falls under a low- or medium-risk category. Business sectors with additional licensing requirements (e.g. finance, education, or food processing) may take longer, especially if approvals from other ministries are involved.

A Local Limited Liability Company (Perseroan Terbatas or PT) is the standard company structure for Indonesian citizens. It enjoys the same legal standing as a PT PMA but is not open to foreign ownership unless a local partner is involved.

Some foreign entrepreneurs attempt to use nominee arrangements by registering a Local PT under an Indonesian citizen’s name while retaining informal control. However, Indonesia does not recognise trusts or the legal separation of beneficial and registered ownership. If the nominee decides to take full control, the foreign party has no legal recourse in Indonesian courts.

That said, local PTs have fewer setup requirements, lower capital thresholds, and are easier to register than PT PMAs, making them suitable for small-scale operations run by locals.

✅ Requires significantly lower paid-up capital than a PT PMA

✅ Easier registration process and faster approval timelines

✅ No restrictions on business activities reserved for local SMEs

✅ Suitable for small-scale or early-stage businesses targeting the domestic market

❌ Foreigners cannot directly hold shares in the company

❌ Using nominee shareholders offers no legal protection

❌ Cannot be used as a holding structure for foreign investment

❌ Limited eligibility for hiring foreign employees or sponsoring work permits

The registration process for a Local PT is broadly similar to that of a PT PMA, but with more flexibility and less regulatory oversight. Unlike PT PMAs, there is no minimum capital threshold imposed by BKPM, and approvals are generally faster unless your business operates in a regulated sector.

Here’s how it works:

1. Reserve the company name through the Ministry of Law and Human Rights (AHU), ensuring it meets local naming conventions and aligns with the proposed KBLI codes.
2. Draft and notarise the Deed of Establishment with a licensed Indonesian notary, outlining the company’s name, objectives, shareholders, directors, and share structure.
3. Submit the deed electronically to AHU, and once approved, obtain the Decree of Approval (Surat Keputusan Pengesahan) confirming your legal entity status as a Local PT.
4. Obtain a domicile letter (if required) from your local subdistrict office to confirm your registered business address. 
5. Apply for a Tax Identification Number (NPWP) at the local tax office. This is mandatory for issuing invoices, opening a business bank account, and fulfilling tax obligations.
6. Register for a Business Identification Number (NIB) through the OSS platform. Depending on your business risk level and KBLI code, additional licences or location permits may be required.
7. Open a corporate bank account, submitting your Deed of Establishment, NPWP, and the director’s proof of identity and address.
8. Inject the paid-up capital into the company’s bank account based on your company’s classification as micro, small, medium, or large.

For many local PTs, particularly micro and small enterprises with low-risk activities, the process can be completed within 1 to 2 weeks. That said, timelines may vary depending on your KBLI code, location, and whether any sectoral approvals are needed.

A Representative Office (RO or Kantor Perwakilan) is the simplest way for foreign companies to establish a legal presence in Indonesia if they don’t engage in direct commercial activities. It’s primarily used for market research, sourcing, liaison, or promotional purposes.

Because ROs are not allowed to generate revenue or issue invoices in Indonesia, they’re best suited for foreign companies exploring the Indonesian market before committing to a full-fledged investment.

✅ No capital requirement or shareholder structure

✅ Relatively fast setup – can be completed within 2 to 4 weeks

✅ Ideal for market research, sourcing, or building early-stage presence

✅ Can legally sponsor a Chief Representative or limited support staff to maintain a local presence

❌ Cannot conduct revenue-generating activities or sign contracts on behalf of the parent company

❌ Limited to activities like liaison, promotion, and supervision

❌ Must rely on the foreign parent company for funding and liabilities

❌  RO licences are valid for 3 years and renewable for up to 5 years total

The registration process is generally quicker than a PT PMA and Local PT, and involves fewer documents:

1. Obtain approval from BKPM by submitting a formal application outlining your parent company’s details, intended business scope, office address, and appointment of the Chief Representative.
2. Prepare and notarise legal documents, including a Letter of Appointment from the parent company, Power of Attorney, and supporting documents translated into Bahasa Indonesia.
3. Register with the Ministry of Law and Human Rights (AHU) and the Directorate General of Taxes to obtain your Tax Identification Number (NPWP).
4. Apply for a Business Identification Number (NIB) through the OSS platform. This serves as your main operating licence and also registers the office with customs, social security (BPJS), and other agencies.
5. Open a corporate bank account in Indonesia. Even though ROs cannot generate revenue, a local account is needed to pay office rent, utilities, payroll, and handle inward remittances from the parent company.

If your objective is managing operations across Asia, serving international clients, or holding regional assets, then Hong Kong may be the more practical launchpad.

Hong Kong is one of the best countries to start a business as a foreigner, thanks to its fast registration process, low tax rates, and full foreign ownership in all sectors. It’s ideal for founders who want to operate globally without unnecessary complexity or capital barriers.

Here’s why many founders are choosing Hong Kong instead of Indonesia:

• Fast setup: Incorporating in Hong Kong typically takes 3 to 5 working days, while company registration in Indonesia can take 1 to 6 weeks.
• Low corporate income tax: Hong Kong applies a two-tier profits tax system at 8.25% and 16.5%, compared to Indonesia’s 22%. Foreign-sourced profits are not subject to tax in Hong Kong.
• 100% foreign ownership: Foreign entrepreneurs can own 100% of their company across all industries.
• No minimum capital requirements: Unlike Indonesian business entities, Hong Kong companies can be formed without paid-up capital.
• English-language business environment: English is one of Hong Kong’s official languages, used in contracts, government filings, and everyday business.
• Regional hub advantage: Tap into the Asia-Pacific market and beyond while operating under Hong Kong’s business-friendly rules.

At Statrys, we help you incorporate your Hong Kong company 100% online within 5 days (subject to approval). Our team handles everything from company formation to registered address, company secretary, and even opening a multi-currency business account, so you can manage international payments and local compliance with one trusted service provider.