Company Registration Indonesia: Advisory On Legal Entities
Local Company (PT) Setup
A foreign-owned company in Indonesia is commonly referred to as a PT PMA – a Limited Liability company with foreign capital. It is a common and preferred company type or structure chosen by foreign businesses and investors, as it is designed to meet the legal requirements stipulated by the government.
Our Company Setup services cover advising on your eligibility to start a PT PMA based on the business sector you operate in and setting up your company in accordance with the latest regulations.
Foreign Owned Company (PT PMA) Setup
A foreign-owned limited liability company is a legal entity that can be fully owned by foreign companies or investors. However, the maximum foreign ownership is determined by the business sector and business activities. The restrictions are listed in Indonesia’s Positive Investment List.
Today, it’s more practical than ever to sell goods and services across the globe. Most of the world’s potential consumers are outside of the Indonesia, and the global affinity for Made in Indonesia products and services is second to none. Many exporters continue to boost their bottom line and build their competitiveness by selling to world markets, and you can too. And as thousands of exporters can attest, diversifying your customer base through exporting can help to weather changes in the domestic and global economies.
If you are looking to export you may have asked yourself, “Is it worth all the effort?” Exporting can be one of the best ways to expand your business:
With significant projected growth in global trade, fueled in large part by newly affluent consumers in China, India, and other developing economies, the challenge for businesses of all sizes in Indonesia is how to dip into this incredible revenue torrent.
As global trade grows, companies that engage in it report a shift in income derived from their export sales compared with sales in their domestic markets.
You might reasonably respond by saying, “That’s all well and good, but do I have what a person in another country will buy?” Companies that produce an amazing array of products and services have grown their businesses through exports. Some of what’s sold is unique, but most is not, relying on other factors such as superior customer service or marketing to close the deal. The businesses and people behind them are excellent at business fundamentals and passionate about expanding globally.
Companies that do not manufacture products can profit from exporting by providing wholesale and distribution services.
Another answer to “Why bother to export?” is that exporting adds to the knowledge and skills of everyone in a company. Doing business in a market that’s beyond one’s borders can transform its practitioners. The experience of forming new relationships, getting up close and personal with another culture, figuring out how to meet the needs of others, and learning how to address new business challenges is personally rewarding. It also leads to improvements in products and services and makes companies stronger in whichever markets they compete.
Assess your company’s readiness to enter your first international market, expand into additional markets, or take on more challenging, high-growth export markets.
Based on your level of export knowledge and experience, identify your company’s next steps for “raising the bar” on export sales. Link to three export assessments below that best describes your company. By doing so, your firm should gain clearer understanding of its capabilities, resources, actions you can take now, and assistance available to you:
Develop an Export Plan
A solid export plan is the first step to international business success.
An export plan helps you understand the facts, constraints, and goals around your international effort. Use it to create specific objectives, decide on implementation schedules, and mark milestones of your success. It can also motivate your team to reach goals.
The Value of an Export Plan
Written plans give a clear understanding of specific steps that need to be taken and help assure a commitment to exporting over the longer term.
Without a plan, your business may overlook better long-term growth opportunities outside of the domestic market.
Benefits of a PT PMA (Foreign-Owned Company) :
Ability To Employ Foreigners
A foreign-owned company can sponsor and issue work KITAS for its international employees. It can also sponsor business visas for business partners and clients arriving in Indonesia for a short stay.
Own The Rights To Register Products
Register your products under your PT PMA to ease business operations in Indonesia, instead of relying on an Importer of Records.
Own The Rights To Obtain License
With a PT PMA, your company will be able to apply for various business licenses to further diversify your business portfolio or investments.
Other Requirements Of Starting a PT PMA For 100% Foreign Ownership In Indonesia
Paid-Up Capital Amount
All PT PMA(s) are required to fulfill the minimum paid-up capital of IDR 10 billion. Shareholders of the company are required to sign off a Capital Statement Letter stating that the shareholders have sufficient funds to meet the required capital.
The Structure Of A PT PMA
As outlined in Indonesia’s Company Law, a corporate structure of a PT PMA consists of Shareholders, Board of Commissioners, and Board of Directors.
A Shareholder as the namesake states owns the company – they could be individual or corporate shareholders. They have the highest authority when it comes to decision-making. They could be an individual, company, or foundation. The PT PMA will also require a minimum of 1 Commissioner and 1 Director.
Representative Office (Branch Office) Setup
A Representative Office is also commonly referred to as a branch office, foreign companies or investors can fully own a Representative Office. This setup works best for non-sales-related business activities (e.g.: setting up call centers, design houses, market research). It is also an interim solution for preparing the establishment of PT PMA.
The Benefits of Representative Office in Indonesia
As mentioned, a representative office (RO) is an affordable way of how to penetrate the market in Indonesia. Whether you are not sure about your target audience or the presence of business partners, these companies will help you to understand the Indonesian market properly.
Even though representative offices are not permitted to generate revenues, they are entitled to sponsoring work and stay permits for their foreign employees. Moreover, an RO can sponsor a business visa for business partners coming to Indonesia.
To establish a representative office in Indonesia might be the most feasible solution for many entrepreneurs due to its lenient corporate structure. As opposed to a foreign company no shareholder or director is required, and only one chief executive is sufficient.
NEXPort is a one-stop market entry provider that will assist you throughout the whole process of representative office formation. We will not only advise you on the most suitable type of an RO but also incorporate the company on your behalf.
Currently, four types of representative offices are available:
1.KPPA: General RO of a Foreign Company
2.KPPPA (known as KP3A or K3PA): RO of a Foreign Trading Company
3.BUJKA: RO of a Foreign Construction Service Company
4.KPPA MIGAS: RO of a Foreign Oil and Gas Company
Let us guide you through the representative office registration process and achieve the best results promptly.
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