Establishing A Business In Indonesia

Establishing a presence from abroad

The most common option for an overseas company as a foreign investor to establish a presence in Indonesia is by setting up a limited liability company (Perseroan Terbatas (PT)) with foreign ownership (PT PMA). The first step in establishing a PT PMA is to determine whether the PT PMA can be wholly foreign owned or only partially foreign owned. This involves what is known as the Negative Investment List. The current Negative Investment List is contained in Presidential Regulation No. 39 of 2014 outlining the list of business fields that are closed and business fields that are open with requirements for investment (PR 39).

To establish a PT PMA, a foreign investor must submit an application to the Capital Investment Coordinating Board to obtain a principle license (izin prinsip). Once the principle license is issued by the Capital Investment Coordinating Board, the founding shareholders or their proxies need to execute the deed