Header Top Bar

WhatsApp Us +62 813 3355 7116

FAQ (Frequently Asked Questions)

Learn more about business processes and requirements for running a company in Indonesia. If you cannot find an answer here, we will happily answer your questions directly.

1. Company Registration

Can I set up a company in Indonesia as a foreigner?

If your business field is open to foreigners, you can set up a foreign-owned company (PT PMA) in Indonesia as a foreigner. Find out more about the restrictions and eligibility of Positive Investment List.

What is a PT?

PT (Perseroan Terbatas) is the Indonesian term for a limited liability company.

What is a PT PMA?

Limited liability company with foreign direct investment ranging from 1-100%.

What is a PT PMDN?

Limited liability company with 100% local/domestic direct investment.

What is a CV?

CV (Commanditer Vennootschap) is a proprietary business entity that houses several individuals who run a business.

Can a foreigner form a CV?


What kind of company is the best for me: a foreign-owned company, a local company, or a representative office?

According to Law No. 25/2007 on Investment, foreign investors must establish a PT PMA company to make direct investments and conduct commercial and business activities in Indonesia.
A PT PMA firm in Indonesia is a legally recognized business entity that can engage in various commercial and business operations as long as it complies with the current laws and regulations.
As for RO, its purposes include conducting market feasibility studies and liaison activities.
Consult with us if you need more info.

When do I have to deposit money in the bank?

The minimum paid-up capital should be deposited once the company completes its establishment process after receiving the Article of Association and Deed of Establishment.

Is a foreigner able to become a director or commissioner?

Yes, in a foreign-owned (PT PMA) company, a foreigner can be a director or a commissioner.

Can you provide pricing details for company registration services?

To provide accurate pricing information for our company registration service, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the services may vary accordingly. For detailed information, please contact our consultants.

What is the difference between PT and CV?
  • PT: limited liability company (shareholders are not legally liable for company liabilities).
  • CV: a proprietary company where liability falls on the shareholders.
What is the minimum shareholder requirement to incorporate a PT?

Two shareholders.

What are the shareholder rights in a PMA company?

Shareholders of a PMA Company in Indonesia have various rights, including voting rights in general meetings, entitlement to dividends and liquidation proceeds, and access to information. They must approve significant matters through general meetings of shareholders with specified quorums, including:

  • Amending articles of association
  • Changing share capital
  • Appointing or dismissing directors and commissioners
  • Approving major transactions, dividends, and financial statements
  • Company reorganization
Can foreigners invest and own a company without having a local partner?

Yes, if it is a PMA.

Can foreigners be shareholders in a PMA?


Can foreigners be shareholders in a PMDN?


What is the role of the Director?

Take responsibility and make every decision for the company.

What is the role of the Commissioner?

Supervise and monitor the directors’ work to ensure every activity is completed and the decisions are coherent with the Shareholders’ goals.

Can the same person be the Director and Commissioner?


Can the same person be a Shareholder and Director?


Can the same person be a Shareholder and Commissioner?


Can I set up a PMA / PMDN company in any location in Indonesia?


How much is the minimum fund required to establish a PT PMA business in Indonesia?

The investment requirement for PMA companies in Indonesia varies based on their classification under the Indonesia Industrial Standard Classification (KBLI). Generally, a minimum investment of IDR 10,000,000,000 (ten billion Indonesian Rupiah), excluding investment in land and buildings, is needed to conduct one business activity in one location.

Will the government check if I have fulfilled the investment plan of IDR 10,000,000,000?

Yes, the government will check IDR 10,000,000,000, the minimum paid-up capital. Fulfilling this requirement is a must.

What is the minimum authorized capital requirement to form a PMDN?
  • Small: IDR 50 million – 500 million.
  • Medium: IDR 501 million – 10 billion.
  • Large: more than IDR 10 billion.
How many Directors can be in a PMA / PMDN?

There is no maximum requirement; however, we recommend having 2-3 Directors and appointing a President Director for a small company.

Can I use a virtual office for PMA / PMDN?


What is a virtual office?

A low-cost set of services that facilitate remote work while maintaining a business address to present to customers.

What is a serviced office?

A regular physical office where you can sit and work.

What is a KPPA?

A term for Representative Office.

Can I set up a KPPA (Representative Office) in any location in Indonesia?

No, Representative Offices must be situated in the provincial capital, e.g., Jakarta, Bandung, Surabaya, Denpasar, etc.

What is the minimum capital requirement for KPPA?


Can a foreigner be the Chief Representative Officer of a KPPA?


Can a KPPA conduct business and generate profit?

No, KPPA is strictly prohibited from doing so.

How long can a KPPA operate in Indonesia?

KPPA license does not have a validity period, meaning it is valid as long as the KPPA operates.

Can the CEO of the parent company be CRO?


How long does the PMA/PMDN incorporation process take?

2-3 Weeks.

How long does the KPPA incorporation process take?

2-3 Weeks.

What is the OSS?

OSS, or Online Single Submission, is a business licensing system integrated electronically with all ministries and state agencies.

What is IU?

IU or Izin Usaha is the business permit.

What is SIUP?

SIUP, or Surat Izin Usaha Perdagangan, is the operational license for businesses involved in retail and trading.

What is TDUP?

TUDP, or Tanda Daftar Usaha Pariwisata, is the operational license for tourism-related businesses, such as restaurants, hotels, and bars.

What is IUI?

IUI, or Izin Usaha Industri, is the operational license for manufacturing companies.

What is NIB?

NIB or Nomor Induk Berusaha is the business identity number.

Can I set up a corporate bank account under the company name?


How long does the corporate bank account setup process take?

One day.

Do I need to show the investment in my bank account?

No. This could be shown in the form of a balance sheet.

Can I set up a bank account before the company is incorporated?

No, bank account setup is done once the company has been incorporated.

Do I have to be in Indonesia to set up the corporate bank account?


Can I set up a PT while I am abroad?


What is KBLI?

Klasifikasi Baku Lapangan Usaha Indonesia or the Indonesian Business Classification Number.

Do I have to decide the KBLI for my business in Indonesia on my own?

No, we will help you with the process.

How many business activities can I have?

There is no maximum requirement. However, you must show an investment plan of IDR 10 billion for each KBLI registered in the OSS system.

What happens if a PT wants to add a director, a commissioner, or other business activities in the future?

Any changes in the Deed of Incorporation will result in a deed amendment and an update to the OSS system.

How much do I have to pay for the corporate taxes?

0.5% of annual revenue for the first three years, 22% of annual profit afterward.

Do I have to pay for the value-added tax (VAT)?

Only if your company generates more than IDR 4.8 billion in revenue annually.

What is LKPM?

Laporan Kegiatan Penanaman Modal or the Quarterly Investment Activity Report.

Do we need to submit it regularly?


What is the minimum investment requirement to be eligible for the Investor KITAS?

IDR 1 billion.

Is a foreign CRO of a Representative Office eligible for the Investor KITAS?

No, but he/she is eligible for the Work Permit KITAS.

2. Visa

What is KITAS?

KITAS is the Indonesian stay permit.

Can I use a business visa to work in Indonesia?

No, you cannot. A business visa can only be used for business purposes, such as attending business meetings, seminars, exhibitions, or training.
To work in Indonesia, you must apply for a work permit and a limited (KITAS) or permanent (KITAP) stay permit.

Is the KITAS/ITAS extension possible in Indonesia?

Of course. Your ITAS can be extended for up to five years.

What are the requirements for an Investor KITAS/ITAS application in Indonesia?

To be eligible, you must have a minimum of IDR 10 billion in authorized capital, IDR 10 billion in paid-up capital, and IDR 1 billion in personal shares.

What are the requirements for a Retirement KITAS/ITAS application in Indonesia?

You will need to be at least 55 years of age and will not work to earn income in Indonesia. Consultation on further requirements is necessary.

What are the requirements for the Work Permit KITAS application?

Red background photo, passport copy, latest diploma, minimum 5-year work experience, and insurance.

What is an Indonesia Family KITAS/ITAS? Can I work in Indonesia under this stay permit?

An Indonesia Family KITAS/ITAS is issued to family members. They can be a spouse and/or children under 18 years of age. It is illegal to work in Indonesia with a family of KITAS/ITAS. To work legally, a Work ITAS is required.

How easy is it to obtain a business visa or work visa?
The difficulty level depends on your country of origin. Indonesia has a list of restricted countries, including:

  • Afghanistan
  • Belarus
  • Guinea
  • Israel
  • North Korea
  • Cameroon
  • Liberia
  • Niger
  • Nigeria
  • Russia
  • Somalia
  • Uzbekistan

Citizens from those countries will find the process complicated, and their applications will likely be rejected.

Who can be my visa sponsor?
  • For business and work visas, the sponsor must be a company legally registered in Indonesia.
  • For social-cultural and retirement visas and KITAS and KITAP, the sponsor must be either an Indonesian legal entity or a citizen.

InCorp Indonesia provides visa sponsorship should you require this service.

How long is the visa application process, and how long will my visa be valid?
The duration depends on the visa type.

  • Work and stay permits take approximately two months. If the applicant is a company director, the visa is valid for one year. For other positions, the visa is valid for six months.
  • A multiple-entry business visa takes approximately one week and will be valid for one year.
  • A single-entry business visa and a social-cultural visa take approximately 1 week and are valid for 2 months. The visa can be extended four times, each for an additional 30 days.
  • A retirement visa takes approximately two months and will be valid for one year.
How do you determine the cost of your visa and immigration consultation services?

To provide accurate pricing information for our visa and immigration consultation services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the services may vary accordingly. For pricing details, please talk to our consultants.

What is the Investor KITAS (C313 & C314)?

This is the type of KITAS you’ll get if you own shares in a company and hold a position as a Director or commissioner.

How long is the Investor KITAS valid for?

1 year for C313 and 2 years for C314. Both are extendable.

How long does the KITAS registration process take?

3-4 weeks for C313 & C314; 6-8 weeks for C312.

What is the passport validity requirement for the Investor KITAS?

Thirty months for the 2-year Investor KITAS and 18 months for the 1-year Investor KITAS.

What is the minimum account balance required for the Investor KITAS?

Thirty months for the 2-year Investor KITAS and 18 months for the 1-year Investor KITAS.

Do I need to apply for the work permit as a shareholder and Director / Commissioner?


What is the Work Permit KITAS (C312)?

It is the type of KITAS you’ll get if you work for a company established in Indonesia.

Can I work in multiple companies under the Work Permit KITAS?

No, you can only work for the company that sponsors your KITAS.

What do I need to extend my Work Permit KITAS?

NPWP, BPJS Health and Social Welfare.

What is NPWP?

Tax identification number.

What is BPJS?

Employee’s health & social welfare.

Can I work in Bali if my KITAS is registered in Jakarta?

No, you are only allowed to work based on the location stated in your KITAS.

I want to bring my wife/husband and my child to Indonesia. What type of KITAS will they need?

The Dependent KITAS (C317).

What are the requirements for the Dependent KITAS application?

Marriage or civil union certificatean d your child’s birth certificate.

Can my wife/husband work in Indonesia under the Dependant KITAS?


Who are considered ‘dependents’?

Only your spouse and your children under the age of 17.

Can I sponsor my parents to get the Dependent KITAS?

No, parents are not considered dependents.

3. Finance

Should I submit tax reports if my company has been established but has no business activities?

Yes, submitting monthly and annual tax reports is mandatory even if your company does not have any business activities, thus zero taxes.

Will having a tax ID but never submitting tax reports cause a problem for my company?

You will receive an administrative penalty for delaying or not filing the tax report correctly and promptly. To avoid this, it is best to hire a local third party, such as InCorp Indonesia, to handle your taxation matters in Indonesia.

What are the obligations related to payroll?

Health Insurance and Social Security Insurance (BPJS) are mandatory. The company and the employee share a certain percentage. The other obligation is tax withholding. The percentage and type of taxes vary from case to case. Contact us for information on your specific field.

What are the deadlines for the annual tax return?

The deadline for an individual tax return is 31 March. A corporate tax return must be lodged within four months after the end of the calendar year or taxable year. More information can be found here: 21 Must-Know Facts about Annual Tax Return in Indonesia.

How is pricing determined for your finance, accounting, and tax services?

To provide accurate pricing information for our finance, accounting, and tax services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the services may vary accordingly. For pricing details, please talk to our experts.

4. Product Registration

What are the regulations on product distribution in Indonesia?

Before you can distribute your products in Indonesia, you will have to register your product with the BPOM (National Agency of Food and Drugs) and MoH (Ministry of Health). Only an Indonesian legal entity can register the product.
If you decide to distribute your product via a local distributor, they will register the product under their entity in Indonesia and become the product license holder. InCorp Indonesia can act as your local distributor and register the product under its name.

Is it safe to register a product under a local distributor?

Yes and no. It is very important to choose a reliable distributor, as they will register the product under their company and become the product license holder and import license holder. It is difficult to change the local distributor if you are not satisfied with the cooperation.

What if my product has been registered under a local distributor, and I decide to transfer the license to my company or another distributor?

You can transfer the license if your local distributor agrees to change the product license holder.

What requirements are needed if my Indonesian company will register the product?

You must register the product with BPOM (National Agency of Food and Drugs) and MoH (Ministry of Health). The type of testing and document requirements depend on the type of product you want to register. Also, the time frame for registration could vary between 3 to 15 months.

If my company is Halal certified for Europe or Malaysia, does that mean it is also Halal certified for Indonesia?

The Indonesian Halal bodies recognize some of the international halal certifications. Nevertheless, since there might be differences in the standards each certification body uses, halal certification in Indonesia still needs to be processed.

Do all the products sold in Indonesia need to be halal registered?

Yes, if they are halal. Law no. 33 of 2014 states that all halal products distributed in Indonesia that are not halal certified will be considered as non-halal since October 2019. Further information can be found in Halal Certificate Registration InCorp Indonesia.

Can you provide pricing examples for the product registration services?

To provide you with accurate pricing information for our product registration services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the service may vary accordingly. For detailed information, please contact our consultants.

5. HR Outsourcing

What are the standard regulations regarding employment in Indonesia?
  • Minimum salary of IDR 3.9 million for the Jakarta region
  • 12-day annual leave (minimum)
  • BPJS coverage
  • Holiday allowance
How does the HR outsourcing mechanism work?

As your HR outsourcing provider, InCorp Indonesia signs a standard employment agreement with an outsourced employee. We then coordinate with your company to take care of the employee’s payroll and pay the salary.

What taxes are involved?
  • Employee income tax article 21
  • VAT on both service invoice and salary invoice
  • 2% recovery tax on salary invoice
How does InCorp’s recruitment outsourcing mechanism work?

As a professional executive search agent, InCorp Indonesia helps promote job vacancies, screen, and shortlist applicants, conduct pre-interviews, and arrange final interviews with applicants. This can also be topped up with an employee background check.

What needs to be included in an employment background check?
These are a few things you need to examine while performing an employee background check:

  • Criminal record
  • Educational background, qualifications, and professional certifications
  • Work and employment history
  • Sexual offense record
  • Alcohol and drug tests
  • Credit and financial background
How many types of employment and hiring options are there in Indonesia?

According to Indonesia’s Manpower Law, employers can hire Indonesian talents on a temporary or permanent contract.

What non-wage compensations do employers in Indonesia usually provide their employees?

In addition to the agreed-upon salary, employers also typically offer some other compensations such as overtime pay, paid annual leave, festive holiday leave, and insurance.

What other things should be considered when it comes to hiring local and foreign employees in Indonesia?
  • Prohibit any form of discrimination and provide equal opportunity for Indonesians and expatriates.
  • Increase the competence of the workers by giving or encouraging job training.
  • Follow the termination procedures (Terminating an employee in Indonesia can be long, tedious, and expensive)
  • Observe the working hours, holidays, and overtime regulations
  • Give mandatory employee benefits, including social security and health insurance
  • Withhold only the right amount of income tax on behalf of the employees
  • Follow the wages and other benefits outlined by the law
  • Process the work permits for foreign employees
Can you provide pricing details for HR outsourcing services?

To provide you with accurate pricing information for our HR outsourcing services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the service may vary accordingly. For detailed information, please contact our consultants.