To officially operate a business in Indonesia, you will need to set up a business entity within Indonesia.
In the past, setting up a business was a time consuming and a costly affair; however, nowadays it can be processed within a few weeks.
In Indonesia there are 3 main business entities you can create, a PT, a PMA and Representative Office. Depending on your circumstances it will depend on the type of business you need to set up.
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Setting up a PT is the most popular company type in Indonesia, although it is fully intended for Indonesian citizens.
Please note, that if you are a foreigner looking to set up a business in Indonesia, we would not suggest this type of business as it will not be in your name, but that of a local who will have ownership of your business. There are only 2 advisable times whereby setting up a PT is preferential – 1. If the business field is closed to foreign ownership or 2. If you have someone you can trust.
A PMA (Penanaman Model Asing) is the safest way to start up a business in Indonesia for foreigners and it will ensure the investor has full control over the direction of the company. There are no restrictions where the company can operate and it reduces the risk in finding a suitable local partner.
Additionally, if you open a PMA the shareholders can opt for the Investor KITAS which has a 2-year validity; making staying in Indonesia significantly cheaper and easier.
As a representative office, you will be able to supervise and coordinate business or do market research without the risk of large investments. A representative Office is an ideal option for businesses that are exploring business opportunities in the Indonesian market.
As a representative office, you will not be allowed to generate revenue, make business transactions, import or export goods however you are entitled to obtain work permits for expatriate managers as well as obtain Multiple Business Visas for personal.
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