Business Setup in Indonesia

Company Setup for Foreign Investors in Indonesia

Legal guidance for foreign nationals setting up a business in Indonesia — from structure planning to government registration, handled by a licensed lawyer.

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Overview

Can Foreigners Own a Business in Indonesia?

Yes — foreign nationals can legally own and operate a business in Indonesia, but the rules governing foreign ownership are specific and regulated by the Indonesian Investment Coordinating Board (BKPM) and the Indonesian Investment Law (Law No. 25 of 2007).

The primary vehicle for foreign business ownership in Indonesia is the PT PMA (Perseroan Terbatas Penanaman Modal Asing) — a Foreign Investment Limited Liability Company. A PT PMA allows foreign nationals to hold shares in an Indonesian company, subject to sector-specific ownership limits set by the government's Positive Investment List.

Setting up a company in Indonesia involves multiple government agencies, legal documents, and registration processes. Having a licensed lawyer manage this process ensures that your company structure is legally sound, your investment is protected, and your business can operate without compliance issues from day one.

💡 Important: Not all business sectors are open to 100% foreign ownership. Some sectors are restricted or require Indonesian co-ownership. We assess your intended business activity during the initial consultation to determine the correct ownership structure for your specific case.

Company Setup at a Glance

Main Vehicle PT PMA (Foreign Investment Company)
Min. Investment IDR 10 Billion (investment plan)
Min. Paid-Up Capital IDR 2.5 Billion
Ownership Up to 100% (sector dependent)
Registration Body OSS System / BKPM
Estimated Timeline 4–8 weeks (full setup)

PT PMA Full Details →

Business Structure Options for Foreign Investors

Understanding the available legal entity types helps you choose the right structure before committing to registration. We advise on the most appropriate structure for your business activity and investment goals.

Most Common for Foreigners

Foreign Ownership

PT PMA

Perseroan Terbatas Penanaman Modal Asing

The standard legal vehicle for foreign investment in Indonesia. Allows foreign nationals to hold shares and operate a business across most sectors, subject to the Positive Investment List.

Foreign ownership allowed (up to 100% in open sectors)
Can hire foreign workers (with proper permits)
Eligible for Investor KITAS sponsorship
Full legal entity — can sign contracts, own assets
Subject to BKPM / OSS registration

PT PMA Setup Details →

Domestic Entity

PT (Domestic Company)

Perseroan Terbatas (100% Indonesian Owned)

A domestic limited liability company, owned entirely by Indonesian citizens or entities. Foreign nationals cannot legally hold shares in a PT directly. Using a nominee arrangement is illegal and carries serious legal risks.

100% Indonesian ownership required
Simpler registration requirements than PT PMA
Lower minimum capital requirements
Not suitable for foreign ownership
Nominee structures are illegal

⚠️ Warning: Foreigners using nominee shareholders in a PT risk losing their company. See our Legal Risk page.

Representative Office

KPPA / KP3A

Kantor Perwakilan Perusahaan Asing

A representative office of a foreign company in Indonesia. Allowed only for marketing and liaison activities — cannot conduct commercial transactions or generate revenue in Indonesia.

No revenue-generating activities permitted
Marketing and research only
Lower setup requirements than PT PMA
Suitable for market entry research phase
Cannot sponsor Investor KITAS

Ask About KPPA →

Our Recommendation: For most foreign investors who want to actively operate, manage, or earn revenue from a business in Indonesia, a PT PMA is the correct legal structure. It provides the strongest legal protection, full commercial rights, and eligibility for an Investor KITAS.

PT PMA Setup Guide →

Foreign Ownership Rules in Indonesia

Foreign ownership is regulated by the Positive Investment List (Daftar Prioritas Investasi) issued by BKPM. Understanding these rules is essential before choosing a business sector.

100% Open Sectors

Some business sectors allow 100% foreign ownership through a PT PMA. Examples include certain technology, tourism, industrial, and service sectors.

View Investment Rules →

Partially Open Sectors

Some sectors allow foreign ownership up to a specified percentage (e.g., 49%, 67%, or 95%), requiring Indonesian co-ownership for the remainder.

Check Your Sector →

Restricted / Closed Sectors

Certain sectors are closed to foreign ownership entirely or are reserved for Indonesian nationals only. Examples include certain media, defence, and cultural sectors.

View Restrictions →

Get Legal Advice First

Before committing to a business structure, our lawyer reviews your intended activity against the current Positive Investment List to confirm your ownership options.

Book Consultation →

General Company Setup Process in Indonesia

A simplified overview of the steps involved in setting up a PT PMA in Indonesia. Full details and a step-by-step guide are on our PT PMA Setup page.

Legal Consultation

Determine business activity, ownership structure, share allocation, and confirm sector eligibility under the Positive Investment List.

Company Name Reservation

Check and reserve the company name through the Ministry of Law and Human Rights (Kemenkumham) AHU online system.

Deed of Establishment

Prepare and sign the Articles of Association (Akta Pendirian) before a licensed Indonesian notary. This document defines the company structure, shareholders, directors, and commissioners.

Ministry Approval

Submit the deed for approval and ratification by the Ministry of Law and Human Rights. This creates the company as a legal entity.

OSS / NIB Registration

Register the company through the Online Single Submission (OSS) system to obtain the NIB (Business Identity Number) and business licensing.

NPWP & Tax Registration

Register for a company Tax ID (NPWP) with the Directorate General of Taxation. Required before any commercial activity begins.

Business Licence & Sector Permit

Obtain any sector-specific business licences required by the relevant government ministry for your business activity.

Company Bank Account

Open an Indonesian corporate bank account and fulfil the minimum paid-up capital injection requirement. We assist with bank introduction and capital injection documentation.

See Full PT PMA Setup Guide →

Why Legal Support Is Essential for Company Setup

Setting up a PT PMA without legal guidance exposes foreign investors to significant legal and financial risks.

Correct Legal Structure

Choosing the wrong ownership structure, share allocation, or director arrangement can make your company legally invalid or result in future disputes.

Nominee Shareholder Risk

Using Indonesian nominees to bypass foreign ownership limits is illegal. Foreign investors who do this risk losing their entire company with no legal recourse.

Government Compliance

PT PMA companies face specific reporting obligations to BKPM, OSS, and tax authorities. Non-compliance results in penalties and may jeopardise your business licence.

Investor Protection

Properly drafted shareholder agreements, director terms, and corporate governance documents protect your investment from internal disputes and director misconduct.

Ready to Set Up Your Business in Indonesia?

Book a consultation with our licensed Indonesian lawyer to discuss your business plan, confirm your ownership structure, and get a step-by-step setup roadmap tailored to your investment goals.