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Company Registration Indonesia: Advisory On Legal Entities

Local Company (PT) Setup

A Local Company is structured as an entity that is 100% owned by a local. It requires a smaller capital and has lesser limitations and requirements to fulfill. Foreigners who wish to open a Local Company can start one through a Special Purpose Vehicle (SPV) arrangement.
  • Benefits of a Local PT Company in Indonesia for Foreigners
  • Even though there are other legal entities particularly designed for foreigners — a limited liability foreign-owned company and representative office — starting a local company might bring more benefits to some foreign entrepreneurs.
  • Not Restricted from Some Business Fields
  • The Negative Investment List is a document that regulates foreign ownership of businesses based on business sectors they operate in. Thus, some business activities are fully closed to non-domestic investors, and some are partially limited. On the other hand, a local company is not a subject to this regulation, and it might be the only choice how to start a business in Indonesia in your field.
  • Lower Incorporation Costs
  • In comparison with a foreign-owned company, the paid-in capital of a local company is much lower. In general, it ranges from IDR 50,000,000 up to more than IDR 10,000,000,000. The amount of the capital defines the size of the company, which further determines whether a company is eligible to sponsor a work permit for a foreign worker (and how many).
  • Small : IDR 50,000,000 – 500,000,000
  • Medium : IDR 500,000,001 – 10,000,000,000
  • Large : above IDR 10,000,000,001

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.

Strategic Reasons to Export
The World is Open for Your Business

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:  

  • Grow your bottom line (companies that export are 17 percent more profitable than those that don’t).
  • Smooth your business cycles, including seasonal differences.
  • Use production capabilities fully.
  • Defend your domestic market.
  • Increase your competitiveness in all markets.
  • Increase the value of your intellectual property should you choose to license it.
  • Increase the value of your business should you choose to sell it. 
  • As the volume of trade grows and barriers to trade fall, competition in a company’s domestic market intensifies, particularly from foreign competitors. Competition in our own backyard and enter new markets for our products and services overseas:
  • Ninety-five percent of the world’s consumers live outside the United States. That’s a lot of potential customers to ignore.
  • Foreign competition is increasing domestically. To be truly competitive, companies must consider opening markets abroad.
  • Exporting is profitable.
  • Exporting helps businesses learn how to compete more successfully. 
  • Additional reasons to export.


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.

Export Readiness

Are You Ready to Export?

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

Low Incorporation Cost

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.

Visa Sponsorship

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.

Organisational Structure

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.

Starting a Representative Office in Indonesia with NEXPort

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.

Stay on top of regulations with tailormade solutions to break into Indonesia. We’re here to help clients rethink structure & cost to deliver on business ROI.

To find out more, fill in the form below and we will get back to arrange a 1-to-1 guided consultation.

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