Today, we're going to establish a corporation in Indonesia
Let me tell you how to create a "company." Recently, a lot of people are visiting Indonesia, and they really need a company to do business there.
A company that foreigners can make in Indonesia is called PMA (PENANAMAN MADAL ASHING). For the basic details, please refer to the previously written article and today I would like to focus on the recent process of establishing a company.
In Indonesia, the word "PT" is usually used in front of a company, but PT means "PERUSAHAAN TERBATAS," which means a corporation, and a company that has been approved by the Investment Authority (BKPM) by investing even 1% of its foreigners or foreign corporations is called "PMA."
"Procedures for Establishing Indonesian Corporation"
The basic establishment procedure is as above.
The most important thing is the "business sector".
It is whether the business I want to do is officially possible to invest in Indonesia.
The chart above is a list of investment restrictions (DNI) published by the Investment Authority (BKPM) as Indonesia's Presidential Decree No. 44 in 2016. The list includes not only prohibited investment but also conditional open and conditional permitted industries.
The details of the chart above are in the tourism sector, and representatively, travel agencies with number 226 are allowed up to 67% of foreigners, and local shares must be at least 33%.
In the case of hotels, the number 228 and the two-star hotel only allows up to 67% of foreign investment. Therefore, depending on the type of business, 100% foreign investment is not possible, and there are industries that require partnership with locals, so please check with the person in charge or agency to see if my business is actually possible to invest and what percentage is possible.
In particular, in the case of restaurants that the most people are interested in, 100% foreign investment was not possible before, but 100% foreign investment is possible recently, and all companies have at least two shareholders.
Recently, the biggest issue is investment capital, and the Investment Administration requires foreign investment companies (PMA) to meet the regulations of 10M investment capital or 50M sales. In other words, it is possible to establish a foreign investment company only when the above conditions are met in addition to the basic company establishment capital.
After the basic permit, the establishment of an Indonesian company includes visas, environmental evaluation of local licensees, resident consent forms, and import permits for each industry, followed by a one-year temporary permanent business permit and permanent business permit.
In the case of manufacturing, the most important thing is that the manufacturing site must be an industrial corporation. Unless it is an industrial corporation, you cannot obtain permission from the investment agency now.
It is true that many parts of the field are changing now, and it is not easy to obtain accurate information in Indonesia. Don't think too easily about making a decision on overseas investment, but research it through various channels if possible and discuss it with your acquaintances and experts.
We have consistently considered investors as "my family" for more than 20 years and are working with solid alternatives through investment consultations, so please feel free to contact us.
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