Indonesia rewrote its incorporation rules under the Omnibus Law, and most guides still describe the process that existed before. Incorporation is the legal act of creating a company that is a separate legal person from its owners. Today that act runs through the Online Single Submission (OSS) system, Indonesia’s risk-based business licensing platform. The documents that used to define incorporation, like the TDP company registration certificate, have been abolished.
The short version: foreigners incorporate through a PT PMA (Penanaman Modal Asing), the foreign investment company. You choose your business codes, notarize a deed, register for tax, and pull a Business Identification Number through OSS. This guide gives the current step-by-step path, with every figure verified for 2026.
What are the company types in Indonesia?
Indonesia has four practical vehicles: the local PT, the single-owner PT Perorangan, the foreign-owned PT PMA, and the representative office. A PT (Perseroan Terbatas) is the standard limited liability company. Only the PT PMA lets foreigners hold equity. Representative offices cannot earn revenue. The table below compares them so you can pick before reading further.
| Entity | Who can own it | Min. shareholders | Can earn revenue | Typical use | Source |
|---|---|---|---|---|---|
| PT (Perseroan Terbatas) | Indonesian citizens or entities | 2 | Yes | Domestic LLC | Law 6/2023 |
| PT Perorangan | One Indonesian citizen (micro or small) | 1 | Yes | Solo Indonesian MSME | Law 6/2023 |
| PT PMA (Penanaman Modal Asing) | Foreign and/or local shareholders | 2 | Yes | Foreign investor vehicle | PP 28/2025 |
| KPPA (representative office) | Foreign parent, no shares | 0 (one chief executive) | No | Market entry and liaison | OSS |
MSME stands for micro, small, and medium enterprise. For a group structure, see Commenda’s guide to setting up a subsidiary company in Indonesia.
What is a PT (local limited liability company)?
A PT is Indonesia’s standard domestic limited liability company, requires at least two shareholders, and must be fully Indonesian-owned. Foreigners cannot hold shares in it. Since the Omnibus Law, its capital is tiered by business size (micro, small, medium, large) rather than a single fixed floor, per Law 6/2023. The old fixed minimum for small business is largely gone.
For a deeper walkthrough of the local company route, read Commenda’s companion piece on LLC company registration in Indonesia.
What is a PT PMA (foreign-owned limited liability company)?
A PT PMA is a PT with any foreign shareholding, and it is the vehicle foreign investors use. A single foreign share converts a PT into a PT PMA. It needs at least two shareholders, one director, and one commissioner. In sectors that are open, foreign investors keep up to 100% ownership and hold the same legal standing as local companies.
The PT PMA does not get “simplified permits.” In practice it faces more scrutiny than a local PT. Import duty relief is not automatic either. It exists only as conditional investment-facility exemptions on capital goods under an approved investment masterlist, not as a blanket rate cut.
What is a PT Perorangan?
A PT Perorangan is a single-owner PT created by the Omnibus Law for Indonesian-citizen micro and small enterprises, confirmed under Law 6/2023. It allows one owner instead of the usual two shareholders. Foreigners cannot use it, so it is not a PT PMA alternative. It appears here because searchers meet it when comparing company types.
What is a representative office (KPPA, KP3A, BUJKA)?
A representative office is a non-revenue presence run by a single chief executive, with no shareholders and no directors. Three types exist. KPPA (Kantor Perwakilan Perusahaan Asing) is the general foreign representative office. KP3A is the foreign trade representative office for agency and trading liaison work. BUJKA is the foreign construction services representative office. None of the three may sign commercial contracts or generate income. The setup process appears later in this guide.
What is the difference between a PT and a PT PMA?
One share of foreign ownership turns a PT into a PT PMA, and that switch triggers three things: the investment-plan threshold above IDR 10 billion, screening against the Positive Investment List, and quarterly investment reporting to the investment authority. A local PT carries none of these. The table sets out the practical gap.
| Factor | PT (local) | PT PMA (foreign) | Source |
|---|---|---|---|
| Foreign ownership | Not allowed | Allowed in open sectors | PR 10/2021 |
| Minimum capital | Tiered by business size | Investment plan above IDR 10 billion | BKPM |
| Positive Investment List screening | Limited | Required per KBLI code | PR 10/2021 |
| Investment reporting | Standard filings only | Quarterly LKPM report | BKPM |
BKPM is the Ministry of Investment (Badan Koordinasi Penanaman Modal). LKPM stands for Laporan Kegiatan Penanaman Modal, the investment activity report.
Can foreigners own 100% of a company in Indonesia?
Yes, in most sectors. Presidential Regulation 10/2021, amended by Presidential Regulation 49/2021, replaced the old Negative Investment List (DNI, Daftar Negatif Investasi) with the Positive Investment List. The logic flipped: sectors are now open to foreign investment unless a rule restricts them. Only a short list stays closed or capped.
| Category | Example sectors | Source |
|---|---|---|
| Open to 100% foreign ownership | Most business fields by default | PR 10/2021 |
| Conditional or capped | Sectors with equity caps or partner conditions | PR 10/2021 |
| Reserved for MSMEs and cooperatives | Small-scale activities | PR 10/2021 |
| Fully closed | Narcotics cultivation, gambling, weapons manufacturing, certain fisheries | PR 10/2021 |
The practical check: match your KBLI code against the Positive Investment List inside OSS before you commit. KBLI is Indonesia’s standard business classification, covered in Step 1.
Are nominee company agreements legal in Indonesia?
No. A nominee arrangement, where an Indonesian holds shares on a foreigner’s behalf, is void under Article 33 of the Investment Law (Law No. 25 of 2007). The nominee is treated as the true legal owner, and the foreigner has no enforceable claim to the shares. Courts have voided these agreements. This reverses how older guides framed nominees.
The lawful routes for foreigners are the PT PMA in an open sector or a representative office for non-revenue market entry. Treat any “nominee” offer as a legal risk, not a shortcut.
What is the minimum capital requirement for a PT PMA?
A PT PMA needs an investment plan above IDR 10 billion (approximately USD 650,000, exchange-rate dependent) per KBLI code per project location, excluding land and buildings, per BKPM rules. You declare this plan value in OSS at the NIB application, not in a separate up-front BKPM approval. BKPM then monitors delivery through the quarterly LKPM report.
| Capital measure | Requirement | Source |
|---|---|---|
| PT PMA investment plan | Above IDR 10 billion (~USD 650,000) per KBLI code per location, excluding land and buildings | BKPM |
| PT PMA paid-up capital | Historically IDR 2.5 billion; current OSS/BKPM practice frequently requires the full IDR 10 billion | BKPM |
| Local PT capital | Tiered by business size (micro, small, medium, large) | Law 6/2023 |
| Sector exceptions | Some sectors set higher specific minimums | PP 28/2025 |
What is the difference between authorized, issued, and paid-up capital?
Authorized capital is the ceiling set in the articles of association. Issued capital is the portion shareholders subscribe to. Paid-up capital is the amount actually deposited into the company. For a PT PMA the historic rule was IDR 2.5 billion paid-up against a IDR 10 billion investment plan. Current OSS and BKPM practice frequently requires the full IDR 10 billion paid-up, so confirm the live figure before you transfer funds.
How do you incorporate a PT PMA in Indonesia? A step-by-step process
You incorporate a PT PMA in six steps: confirm your KBLI codes and ownership cap, reserve the name, notarize the deed, register the tax number, obtain the NIB through OSS, then secure licenses, banking, and capital. The whole flow is scannable below before the detailed steps.
| Step | Authority | Output document | Indicative timing | Source |
|---|---|---|---|---|
| 1. KBLI and ownership check | OSS / BKPM | Confirmed KBLI code and ownership cap | 1-2 days | PR 10/2021 |
| 2. Name reservation | MOLHR via notary | Approved company name | 1-2 days | MOLHR |
| 3. Deed of establishment | Notary + MOLHR | Deed + SK Kemenkumham | ~1 week | Law 6/2023 |
| 4. NPWP registration | DJP (Coretax) | Company NPWP | Days | DJP |
| 5. NIB via OSS | OSS | NIB | Days to ~2 weeks | PP 28/2025 |
| 6. Licenses, bank, capital | OSS / bank / BKPM | Licenses, account, LKPM | Varies by sector | PP 28/2025 |
MOLHR is the Ministry of Law and Human Rights. DJP is the Directorate General of Taxes.
Step 1: Choose your KBLI codes and confirm ownership limits
KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) codes classify your business activity and set your foreign ownership cap, risk level, and licensing. Every company selects one or more. The established baseline is KBLI 2020, and a KBLI 2025 update is being rolled out through a joint circular. Confirm which code list OSS applies to your activity on the day you register, because ownership caps hang on the exact code.
Step 2: Reserve and approve the company name
Reserve your company name for approval by the Ministry of Law and Human Rights through a notary. The name must be unique, must avoid misleading or improper terms, and must not resemble an existing company or government body. A PT PMA name may be in a foreign language. A local PT name must consist of at least three Indonesian words. Check availability first with Commenda’s company name checker.
Step 3: Sign and notarize the Deed of Establishment
The Deed of Establishment (Akta Pendirian) is signed before a notary by shareholders, and a PT PMA needs at least two shareholders, one director, and one commissioner. Shareholders sign in person or through a power of attorney. The deed carries the articles of association (Anggaran Dasar), which must state:
- Authorized, issued, and paid-up capital amounts
- Company name and location
- Company objectives and business activities
- Capital structure details
- Board of directors and commissioners: appointments, discharge, and member numbers
- Shareholder meeting methods and locations
- Profit distribution and dividend procedures
- Incorporation period
- Number of shares, classification, rights, and nominal value per share
The Ministry of Law and Human Rights then issues the SK Kemenkumham, its ratification decree. That decree is Indonesia’s functional certificate of incorporation, and it records the founders, board, and shareholders.
Step 4: Register for an NPWP (taxpayer registration number)
Register the company’s NPWP (Nomor Pokok Wajib Pajak, the tax identification number) with the Directorate General of Taxes (DJP). New registrations run through Coretax, the DJP’s integrated tax administration system that replaced the older e-registration workflow. Confirm the current Coretax portal and any 2026 filing mandate on the DJP site before filing. The old 14-day mail-in e-registration routine no longer applies.
Step 5: Obtain the NIB through OSS
The NIB (Nomor Induk Berusaha, the Business Identification Number) from OSS is the center of the process, and it replaced the abolished TDP and SIUP. Under PP 28/2025, one NIB also serves as your importer identification number, customs access, and BPJS social security enrollment. Risk-based licensing decides what else you need. OSS sorts businesses into four risk levels. Low-risk businesses operate on the NIB alone. Medium-risk businesses add a standard certificate. High-risk businesses add a full license. You declare the IDR 10 billion investment plan here in OSS.
Step 6: Secure sector licenses, open the bank account, and inject capital
Once the NIB is live, obtain any sector and risk-based licenses OSS flags for your KBLI code. Then open a corporate bank account and inject the paid-up capital, obtaining a capital statement letter. From this point a PT PMA must file the LKPM investment activity report to BKPM every quarter. Track these recurring deadlines in Commenda’s compliance calendar.
How long does it take to incorporate a company in Indonesia?
A realistic full PT PMA setup runs 4 to 8 weeks end to end, and longer when sector licenses are involved. The “one week” figure circulating on some service sites refers only to the entity shell, not full operational readiness, so treat it as a marketing floor. The stage-by-stage estimate below reflects service-provider practice.
| Stage | Indicative time | Source |
|---|---|---|
| Name approval | 1-2 days | Service-provider practice |
| Deed and MOLHR approval | ~1 week | Service-provider practice |
| NPWP and NIB via OSS | Days to ~2 weeks | OSS practice |
| Full PT PMA setup | 4-8 weeks | Service-provider practice |
Do you still need a domicile letter (SKDU) in Indonesia?
In Jakarta, no. The SKDU (Surat Keterangan Domisili Usaha) requirement was abolished around 2019, and address verification now runs through OSS and the NIB. Some regions and specific zoning cases still require it, so founders outside Jakarta should confirm with the local government. In all cases the business address must sit in a commercially zoned location. Residential addresses and virtual offices face local restrictions.
How do you set up a representative office (KPPA) in Indonesia?
You set up a KPPA through OSS by obtaining a NIB plus the representative office license, which replaced the abolished TDP. A KPPA generates no revenue, has no shareholders or directors, and is run by a single chief executive. Setup cost is low, and a representative office can sponsor work and stay permits for foreign staff. It is the low-commitment market-entry route compared with a full PT PMA.
The three forms differ by activity:
- KPPA handles general liaison, promotion, and market research.
- KP3A handles foreign trade and agency activities.
- BUJKA handles foreign construction services.
Weighing a representative office against a full entity or hiring through an employer of record? Commenda’s entity vs EOR calculator helps you model the trade-off.
How Commenda helps with company incorporation in Indonesia
Commenda’s incorporation service handles your Indonesia entity setup end to end, from KBLI selection and the deed through the NPWP and the NIB in OSS. Commenda then manages the entity’s ongoing filings, including the quarterly LKPM report and tax registrations, so country 12 behaves like country 1. You get certainty of process instead of a spreadsheet of vendor deadlines.
Building a multi-jurisdiction structure around your Indonesia entity? Commenda also covers registering a company from Indonesia into Singapore, the UAE, and the USA. Track every filing deadline in one place with the compliance calendar, and confirm your name is free with the company name checker.
Book a demo to get a scoped incorporation plan for your Indonesia PT PMA.
