Everything you need before starting your business legally in Indonesia
Thinking about investing in Indonesia? With its strategic location, growing economy, and vast opportunities across sectors, Indonesia has become a top destination for foreign investors. However, before diving in, it’s essential to ensure your investment is legally sound. Here’s a comprehensive legal checklist every foreign investor should consider.
✅ 1. Choose the Right Business Structure
Foreigners are typically required to establish a foreign-owned company (PT PMA). This structure allows full or partial foreign ownership and comes with specific legal and financial obligations.
Tips:
- Check the Negative Investment List (DNI) to ensure your industry is open to foreign ownership.
- Consult with legal experts to ensure your structure aligns with your goals.
✅ 2. Understand Licensing and Permits
To operate legally, a PT PMA must obtain:
- Business Identification Number (NIB)
- Relevant sectoral licenses depending on the business type
- Location permit, environmental permits, if applicable
Wyndham Alliance helps navigate the licensing maze to avoid unnecessary delays.
✅ 3. Prepare Valid Legal Documentation
Ensure the following are in place:
- Deed of establishment (in Bahasa Indonesia)
- Approval from the Ministry of Law and Human Rights
- Articles of Association
- Tax ID (NPWP)
Proper documentation ensures smoother audits, banking, and future expansion.
✅ 4. Ensure Compliance with Local Laws
Foreign businesses must comply with:
- Manpower regulations for hiring locals or expatriates
- Labor contracts and employment permits (RPTKA & IMTA)
- Tax obligations including VAT and corporate tax
Working with a legal advisor ensures your business remains compliant and avoids penalties.
✅ 5. Understand Capital Requirements
The minimum paid-up capital for a PT PMA is IDR 10 billion, although this may vary by sector. Make sure your financial plan aligns with these capital requirements and that funds are traceable and legally documented.
✅ 6. Protect Your Intellectual Property
If your business involves branding, proprietary systems, or unique products, register your trademarks or patents with the Indonesian Directorate General of Intellectual Property.
✅ 7. Plan for Tax and Accounting Compliance
Indonesia enforces strict tax and reporting obligations. You must:
- Submit annual tax returns
- Maintain audited financial reports
- Register for e-Faktur (electronic invoicing system)
Hiring a tax consultant, like those at Wyndham Alliance, ensures all reporting is accurate and timely.
💡 Final Thoughts
Indonesia is open for business—but to succeed, foreign investors must operate with full legal compliance. A solid legal foundation protects your business, builds trust, and ensures long-term growth.
Need help setting up your business in Indonesia?
Let Wyndham Alliance be your legal partner—guiding you through every step of your investment journey.
📩 Contact Us Today for a consultation.