Types of Companies in Indonesia

Setting up a company in Indonesia may solicit complete attention as it is necessary to choose the proper business form for future activities. An entrepreneur can set up a limited liability company, nominee LLCs or foreign-owned LLCs. Our agents for setting up a company in Indonesia can provide you with complete information regarding the requirements and the preparation of the documents for each type of business form.

Find out from the video below the types of companies which can be registered in Indonesia:

Indonesian limited liability company

An optimal business entity for entrepreneurs in Indonesia is the limited liability company which can be registered if all requirements are met. For example, the LLC must be created by at least two Indonesian investors, as this form is directed to local entrepreneurs. A manager and a commissioner need to be appointed, considering that the commissioner can be of a different nationality. The representative of the Indonesian LLC has varied responsibilities among which we mention the most important ones: dealing with the annual report and agree the budget suggested by the board of managers of the company.

This business form is common among those who wish to immigrate to Indonesia for business purposes. We can also help you establish a company in Qatar, through our local affiliates. In Qatar the incorporation process lasts 3 weeks compared to 2 weeks in Indonesia.

Foreign-owned limited liability company in Indonesia

Starting a company in Indonesia as an entrepreneur from overseas can be made through a foreign-owned limited liability company which can be entirely or partially owned by foreigners, considering the provisions of the Foreign Capital Investment Law in the country.

At least two stockholders, a director (who does not need to be Indonesian) and a representative or a commissioner are necessary when registering a foreign-owned LLC in Indonesia. One should know that, under current rules, there is no general obligation for a fully foreign-owned company to divest shares; a divestment (for example, the stockholder must sell a share of at least 5% to a legal entity or to a citizen of Indonesia within a set period) applies only if it was imposed in the company's investment licence or by sector rules such as mining. Even more, a foreign-owned company in Indonesia can set up the activities in varied regions, taking into consideration that particular licenses are necessary.

Investors who are interested in more information about shareholder liability can discuss this matter with our lawyers in Indonesia.

The categorization of LLCs in Indonesia

Government Regulation No. 7 of 2021 (implementing the Job Creation Law) categorizes businesses into:

1. Micro-companies which must have business capital of up to 1 billion RP (excluding land and buildings) or a maximum yearly turnover of 2 billion RP;
2. Small companies which must have business capital of more than 1 billion and up to 5 billion RP or annual sales of more than 2 billion and up to 15 billion RP;
3. Medium-sized companies which will have business capital of more than 5 billion and up to 10 billion RP or annual sales of more than 15 billion and up to 50 billion RP;
4. Large companies that have business capital above 10 billion RP or a yearly turnover of more than 50 billion RP.

If you want to open a company falling into the size categories above, we can assist you. We also assist those who immigrate to Indonesia.

Public companies (Perum and Persero) in Indonesia

A less-known type of Indonesian company is the public company which can be used for two purposes: for non-profit and for stock trading purposes.
The non-profit (Perum) company has the following features:

• its capital is entirely owned by the Indonesian state and will fall under the Civil Code;
• the employees of such entity are SOE employees, not civil servants;
• it is mostly used for socio-economic purposes, compared to the Persero company;
• even if registered for non-profit reasons, it will be considered a legal entity.

The Persero type of company, on the other hand, will take the form of a limited liability company and its employees are considered private workers, even if the company is state-owned.

Representative offices in Indonesia

For market research, promotional services, or for trading activities on behalf of a parent company, a representative office can be chosen. This is how foreign companies can register their presence on the market in Indonesia, without having to set up one of the entities mentioned above. Additionally, because branches are not allowed in Indonesia, one can focus on establishing a representative office.

For a better understanding of the requirements regarding the types of companies available in Indonesia, we recommend you get in touch with our team of company formation agents in Indonesia.

If you are an investor looking to open one of the aforementioned types of companies but also have other questions, such as those concerning immigration to Indonesia, you can reach out to our team. We will provide you with detailed information about the visas suited for investors, how and when to apply, as well as your options if you want to become a permanent resident and remain in the country as a business owner.