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Types of Companies in Indonesia

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 company formation agents 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.

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 resident manager and a representative or a commissioner are necessary when registering a foreign-owned LLC in Indonesia. One should know that in cases where the ownership is entirely foreign, the stockholder must sell a share of at least 5% to a legal entity or to a citizen of Indonesia within 15 years of the established activities in the country. 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

The Company Law in Indonesia categorizes limited liability companies into:

  1. Micro-companies which must have a minimum share capital of 50 million RP and a maximum yearly turnover of 300 million RP;
  2. Small companies which must have a minimum share capital ranging between 50 million and 500 million RP and an annual income between 300 million and 2,5 billion RP;
  3. Medium-sized companies which will have a share capital ranging between 500 million RP and 10 billion RP and an annual revenue ranging between 2,5 million and 50 billion RP;
  4. Large companies that have a net share capital above 10 billion RP and 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 will be considered employees of the Indonesian state;
  • 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.