The Procedure of Foreign-Owned Company Registration (PT PMA) In Indonesia

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Indonesia is one of the world's current growing economy which attracts investors to do the business in the country. There are two forms of investment a foreign investor can take in Indonesia; those are by establishing a foreign-owned company or a representative office. Unlike the latter, a foreign-owned company has full rights to run a business in Indonesia as stated in the licenses.Before running the business, it’s important to follow the procedure of foreign-owned company registration (PT PMA) in Indonesia. The registration is regulated formally under Indonesian law so that one must comply with it. Here is the procedure to follow.·         Register to Indonesia Investment Coordinating BoardForeign-owned company registration (PT PMA) in Indonesia must be done through the Investment Coordinating Board, either through their office or online application—known as SPIPISE. The investment value must be a minimum of IDR10 billion except the land, building, and inventory. Moreover, you must pay attention to how much foreign capital is allowed in the company. The precise percentage of foreign capital depends on the business sector, in which some sectors can be 100% owned by foreigners while some others are limited to 49% or more. This capital shares must be settled before you register the company.For the registration, the investors or their legal representative must fill the registration form and attach the necessary documents, such as the investors’ copy of passport, Article of Association, Deed of Establishment, and registration letter with stamp duty and signature.·         Obtaining Principle LicenseAfter you register your company in Indonesia, you can’t start the business right away but need to obtain principle license. If the company is new—not a transformation from Indonesian-owned company to PT PMA—you also need to obtain the necessary documents to run the business. The documents include investment license, permit to hire foreign workers, and Tax Identification Number (known as NPWP).Principle license is valid for a certain period, and the PT PMA must finish the said investment within that timeframe. If it has not, you need more than just foreign-owned company registration (PT PMA) in Indonesia but also principle license extension as late as 30 days before the license expiration date. ·         Obtaining Business LicenseA business license is another permit a PT PMA must obtain before doing their activities in Indonesia. The license is specified for certain activities which mark the scope of works a PT PMA can conduct in Indonesia. An exception exists for PT PMA which works in construction in specified regions regulated by Indonesian law. For such company, after getting a principle license, a construction can be started right away. Other necessary licenses can be obtained at the same time as the construction process.Even though foreign-owned company registration (PT PMA) in Indonesia seems to need many licenses and requirements, the registration process does not take too long. Each license can be obtained within 5 working days or less. For a company with minimum investment at IDR100 billion, there is a quick process called 3-Hours License Service. Within 3 hours, you can register a PT PMA and obtain all necessary licenses so that your business in Indonesia can start as soon as possible.Source: Smartcolaw 


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