The Regulations for Foreign Investors in Indonesia

Indonesia is speedily gaining recognition as the ideal investment destination for overseas investors. The reasons for this include its expanding domestic market, availability of a young and skilled workforce, and an improved investment environment. Furthermore, for more than a decade, Indonesia’s political climate has remained steady, with the nation enjoying the benefits of democracy. If you want to invest in Indonesia, you need to be well aware of the company registration procedures to enable your business to get started and run smoothly.

First, you need to decide on the ideal business structure, whether a representative office, a local company (PT) or a Limited Liability Company (PT PMA). The registration process takes around a month or one and a half months, after which you can start your business operations.

Most overseas investors prefer the PT PMA structure for their business since it permits them between zero to 100% ownership in many sectors. It also provides them with benefits like the freedom to hire foreign employees, permission to apply for Indonesian tenders, and acquiring rights similar to domestic companies.

The rules for Foreign Investors in Indonesia

Overseas investors need to be aware of the following:

  • You need to decide which is the most suitable business structure for your business.
  • Identify the sector in which your business is involved.
  • Find out whether the industry you have chosen is available for foreign investment. There are specific sectors in which foreigners cannot invest. Refer to the Indonesia Negative Instrument List (DNI) that contains the list of approved sectors for foreign investors and contains the stipulations concerning foreign ownership.

Activities you can do after Company Registration

Once your company incorporation procedure is over, you can begin business activities in Indonesia. After registration, you can conduct these activities on your company’s behalf:

  • Buy property and assets.
  • You can acquire operating business licenses.
  • Open a bank account in your company’s name.
  • You can hire employees.
  • Acquire permits for foreign staff.
  • Make a quarterly investment report to BKPM.

Evidently, Indonesia is on the way to become the first-choice destination for overseas investors. 3E Accounting Indonesia is a leading firm that supports entrepreneurs who want to start their business in Indonesia and provides services related to the formation of company, registration, documentation, and other related issues. With its cost-effective services, our experienced team helps you run business operations efficiently and remain compliant with Indonesian regulations.