Indonesia in 2025 stands out as one of the most dynamic economies in Asia for global business expansion. Its growing middle class, digital transformation, and government-backed reforms have made it a regional powerhouse. With a population exceeding 270 million and strategic proximity to key markets like Singapore, Malaysia, and Australia, Indonesia presents immense potential for international startups, investors, and corporations.
Whether you are setting up a subsidiary, a local branch, or exploring new investment opportunities, understanding the process of company registration in Indonesia is essential. This guide walks you through every step from choosing the right structure to navigating compliance and alternative hiring models like Employer of Record (EOR).
Table of Contents
- Why Should You Register a Company in Indonesia?
- Legal Framework Governing Company Formation in Indonesia
- Choosing the Right Business Structure
- Step-by-Step Guide to Registering a Company in Indonesia
- Documents Required for Company Registration
- Post-Registration Compliance Requirements
- Business Licenses and Additional Permits
- Timeline to Register a Company
- Cost to Incorporate a Company in Indonesia
- Challenges Foreign Investors Commonly Face
- Foreign-Owned Company Registration (PT PMA)
- Simpler Alternative: Hiring via an Employer of Record (EOR)
- Conclusion
- FAQs
Why Should You Register a Company in Indonesia?
Registering a company in Indonesia allows foreign and local investors to operate legally, access local markets, and build long-term business credibility. While hiring through an Employer of Record (EOR) offers speed and flexibility, incorporating a legal entity gives you complete control over operations, branding, and capital structure.
Key advantages include:
- Establishing a formal presence recognized by Indonesian authorities.
- Accessing tax benefits and government incentives under investment-friendly policies.
- Building trust with Indonesian clients, suppliers, and partners.
- Participating in public tenders and regulated industries.
- Full ownership under the foreign investment structure (PT PMA) in permitted sectors.
For businesses aiming at sustained market growth or local investment, setting up a registered entity is the most strategic choice.
Legal Framework Governing Company Formation in Indonesia
Before you begin the registration process, it’s crucial to understand Indonesia’s legal environment. Company formation is primarily governed by the following laws and authorities:
- Company Law (Law No. 40 of 2007) – Regulates establishment, structure, and governance of limited liability companies.
- Omnibus Law on Job Creation (Law No. 11 of 2020) – Simplifies licensing and investment procedures for domestic and foreign entities.
- Ministry of Law and Human Rights (MOLHR) – Handles the approval and issuance of company deeds and legal entity status.
- Investment Coordinating Board (BKPM) – Regulates foreign direct investment and issues business licenses for PT PMA companies.
- Online Single Submission (OSS) System – A digital platform for integrated business registration and licensing.
These frameworks ensure transparency, digital accessibility, and compliance for new investors.
Suggested Read: Employer of Record in Indonesia: Complete 2025 Hiring & Compliance Guide
Choosing the Right Business Structure
Selecting the right business entity in Indonesia determines how your company is taxed, regulated, and managed. Each structure suits different business goals and levels of foreign ownership.
| Business Type | Legal Status & Ownership | Best For | Foreign Ownership |
| Local PT (Perseroan Terbatas) | Private limited company | Local entrepreneurs and small to medium enterprises | Not allowed |
| PT PMA (Foreign-Owned Company) | Private limited company with foreign ownership | Foreign investors and multinationals | Up to 100% (sector-dependent) |
| Representative Office (KPPA) | Non-trading legal presence | Market research and liaison activities | 100% foreign ownership allowed |
| Branch Office | Extension of foreign parent company | Financial institutions and specific industries | Restricted |
| CV (Commanditaire Vennootschap) | Partnership with general and limited partners | Local small business owners | Not permitted for foreigners |
Foreign investors typically choose the PT PMA model as it allows partial or full foreign ownership, depending on the industry classification under the Positive Investment List.
Step-by-Step Guide to Registering a Company in Indonesia
Once you decide on your structure, follow these steps to complete your company registration:
- Determine Business Classification – Identify your industry’s KBLI (Standard Business Classification) code to align with government regulations.
- Reserve Company Name – Choose a unique company name and register it with the Ministry of Law and Human Rights (MOLHR).
- Prepare the Deed of Establishment – Draft the deed through a local notary, outlining ownership, directors, shareholders, and articles of association.
- Obtain MOLHR Approval – Submit the deed for approval to legalize your company as a corporate entity.
- Register with OSS System – Apply for a Business Identification Number (NIB) and Business License through the OSS platform.
- Obtain Tax Identification Number (NPWP) – Register for NPWP to enable tax compliance.
- Open a Corporate Bank Account – Deposit paid-up capital as required under Indonesian law.
- Register for BPJS (Social Security) – Enroll your employees under BPJS Ketenagakerjaan (Employment) and BPJS Kesehatan (Health).
When all steps are completed, your company will be legally operational in Indonesia.
Documents Required for Company Registration
You must prepare and submit several key documents to complete registration successfully. These include:
- Copies of passports or ID cards of all shareholders and directors.
- Proof of registered business address (lease agreement or ownership certificate).
- Tax identification numbers (for local shareholders).
- Deed of Establishment drafted by a notary.
- Articles of Association detailing capital structure and management.
- Statement letter of capital investment (for PT PMA).
- Proof of paid-up capital transfer.
Foreign documents must be translated into Bahasa Indonesia and legalized or apostilled before submission.
Post-Registration Compliance Requirements
Once your company is registered, you must comply with ongoing legal and tax requirements. Common obligations include:
- Monthly and annual tax filings under PPh 21 (employee income tax) and VAT.
- Enrollment of employees in BPJS Ketenagakerjaan and BPJS Kesehatan.
- Payment of THR (Tunjangan Hari Raya), the annual religious holiday allowance.
- Maintenance of financial records and annual audit (for larger companies).
- Renewal of business licenses as applicable under OSS.
Failure to meet these obligations can result in administrative fines or license suspension. Many businesses rely on payroll and compliance partners such as EORs to manage these requirements efficiently.
Business Licenses and Additional Permits
Depending on your industry, you may need specific operational licenses. Common permits include:
- SIUP – General Trading License.
- NIB – Business Identification Number (mandatory for all businesses).
- TDUP – Tourism Business Registration.
- Environmental Impact Assessment (AMDAL) – For industrial and manufacturing sectors.
- Importer Identification Number (API) – For businesses importing goods into Indonesia.
The OSS system consolidates many of these processes, but businesses in regulated sectors may still need additional local approvals.
Timeline to Register a Company
With the streamlined OSS system, company registration in Indonesia typically takes 10 to 20 business days. The estimated timeline is:
| Step | Duration |
| Name reservation and deed drafting | 3–5 days |
| MOLHR approval | 3–7 days |
| NIB and license issuance (via OSS) | 2–3 days |
| Tax and BPJS registration | 2–5 days |
Delays can occur if document legalization or foreign shareholder verification takes longer.
Cost to Incorporate a Company in Indonesia
Company registration costs vary depending on your chosen structure, industry, and use of professional assistance.
| Cost Component | Estimated Range (IDR) | Approx. (USD) |
| Notary & Legalization Fees | IDR 5–15 million | USD 300–1,000 |
| Government Filing & Licensing | IDR 2–5 million | USD 150–350 |
| Paid-Up Capital (minimum for PT PMA) | IDR 10 billion | USD 650,000 (for foreign-owned) |
| Professional/Consultant Fees | IDR 10–20 million | USD 600–1,200 |
Local PT companies can register with lower paid-up capital, while PT PMA entities require compliance with foreign investment thresholds.
Challenges Foreign Investors Commonly Face
Foreign founders often encounter procedural and regulatory challenges while setting up in Indonesia. Some common issues include:
- Understanding foreign ownership limitations in specific sectors.
- Complexity of document legalization and translation.
- Delays in NIB or MOLHR approvals due to data inconsistencies.
- Managing BPJS and PPh 21 compliance for employees.
- Adapting to Indonesia’s decentralized regulatory framework.
These can be mitigated by partnering with experienced local consultants or Employer of Record providers who manage compliance on your behalf.
Foreign-Owned Company Registration (PT PMA)
A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the preferred structure for foreign investors. It allows full or partial foreign ownership, depending on the industry, and is governed by the BKPM under the Positive Investment List.
To set up a PT PMA:
- Minimum two shareholders (can be individuals or entities).
- One local director and one commissioner are required.
- Minimum paid-up capital of IDR 10 billion (varies by industry).
- Must file an investment plan with BKPM.
This structure offers access to incentives and unrestricted profit repatriation, making it ideal for long-term business expansion in Indonesia.
Simpler Alternative: Hiring via an Employer of Record (EOR)
If your goal is to test the Indonesian market before committing to full incorporation, using an Employer of Record (EOR) is a faster and cost-effective option.
An EOR legally employs workers on your behalf, managing payroll, taxes, and benefits while you retain operational control.
Advantages include:
- Hiring employees in Indonesia without setting up a PT PMA.
- Full compliance with BPJS, THR, and PPh 21 tax obligations.
- Reduced setup time hire within days instead of weeks.
- Lower operational costs and no need for paid-up capital.
Many global startups and remote-first companies use EORs like Asanify to enter Indonesia compliantly and scale quickly.
Suggested Read: Employer of Record in Indonesia Cost: 2025 Hiring & Payroll Breakdown
Conclusion
Indonesia offers tremendous opportunities for global companies, but choosing the right entry path is critical. If you plan for a long-term, capital-intensive operation, registering a local entity like a PT PMA ensures complete control and legal recognition. However, if your goal is to hire quickly, test market feasibility, or maintain flexibility, partnering with an Employer of Record in Indonesia enables you to operate without the burden of incorporation or compliance complexity.
FAQs
Typically 10–20 business days, depending on document readiness and government processing time.
Yes, under the PT PMA structure, foreign investors can own up to 100%, depending on the sector under the Positive Investment List.
Generally IDR 10 billion (approx. USD 650,000), but it varies by industry.
Corporate income tax (22%), PPh 21 for employees, VAT (11%), and social security contributions (BPJS).
Yes, a local registered business address is mandatory for incorporation.
Yes, through an Employer of Record (EOR) like Asanify, which allows compliant hiring without entity setup.
THR (Tunjangan Hari Raya) is a mandatory annual religious holiday bonus equal to one month’s salary, paid before major religious festivals.
BKPM oversees foreign investment approvals, ensures compliance with investment regulations, and grants PT PMA licenses.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.
