Starting Business in Indonesia
Before starting a business in Indonesia, it is essential to define the size of your company, as this determines your legal obligations and the available business structures.
Classification of Company Based on Capital
For foreign investment business entities, based on regulation 4/2021, they are categorized as large-scale business and must comply with the minimum investment value, unless otherwise stipulated by law and regulations.
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*USD 1 = IDR 16,0000​
Micro Business
Less than USD 62.5 thousand
Has a business capital up to a maximum of one billion rupiahs excluding land and buildings for business premises.
Small Business
USD 62.5 - 312.5 thousand
Has a business capital of more than one billion rupiahs up to a maximum of five billion rupiahs excluding land and buildings for business premises.
Medium Business
USD 312.5 - 625 thousand
Has a business capital of more than five billion rupiahs up to a maximum of ten billion rupiahs excluding land and buildings for business premises.
Large Business
More than USD 625 thousand
​Has a business capital of more than ten billion rupiahs excluding land and buildings for business premises.
​Regulation of the Investment Coordinating Board 4/2021 stipulates the minimum paid-up capital for PMA is USD 625,000 unless otherwise determined by laws and regulations. For example, the capital requirement for construction works under Regulation of the Government 5/2021 is a minimum of USD 1,562,500,000
Form of Business Entity for Investment
Foreign Investment Company
Supervisor, liaison office, coordinator, and manage the interests of the company or its affiliated companies.
Representative Offices of Foreign Companies (KPPA)
Supervisor, liaison office, coordinator, and manage the interests of the company or its affiliated companies.
Prepare the establishment and business development of PMA companies inIndonesia or other countries and Indonesia.
Located in an office building in the provincial capital.
Not seeking any income from sources in Indonesia, including not being allowed tocarry out any activities or engage in any engagements/transactions for the sale andpurchase of commercial goods or services with domestic companies or individuals.
Must not participate in any form in the management of any company, subsidiary, orbranch of a company in Indonesia.
Representative Offices of Foreign Construction Service Business Entities (BUJKA)
BUJKA may carry out construction activities in the field of construction consultancy services, construction works, and integrated construction works, however, must meet the requirements of large qualifications.
Representative Offices of Foreign Electricity Support Service Companies (JPTLA)
Electricity installation.
Construction and installation of Electricity Installation.
Maintenance of Electricity Installations.
Representative Offices of Foreign Trade Companies (KP3A)
Introduce, promote, and advance the marketing of goods produced by foreign companies or by associations of foreign companies which appoint them, as well as to provide information or instructions for the use and import of goods to domestic companies/users.
Undertake market research and supervision of domestic sales in relation to the marketing of goods from foreign companies or jointly appointed foreign companies.
Conduct market research for goods required by foreign companies.
Close contracts for and on behalf of the appointing companies with domestic companies for export purposes.
Representatives of foreign trading companies in Indonesia may take the form of selling agents and/or manufacturer's agents and/or buying agents.
Representative Offices of Foreign Companies in The Field of Trading Through Electronic System (KP3A PMSE)
(No description)
Permanent Establishments
A permanent Establishment is a foreign individual or legal entity that operates business in Indonesia and is a foreign tax subject on-resident taxpayer. One example of a foreign business entity with a permanent establishment a representative office established to conduct business activities in the oil and gas sector.