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Foreign investment company bali indonesia

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It frequently occurs that a foreign investor opens a representative office in Indonesia first in order to 'get to know the market'. The advantage of opening a representative office first is that it requires no large capital investment and it is a relatively easy and quick way to establish a legal entity in Indonesia.

Indonesia is a lucrative market for foreign entrepreneurs due to the country's huge population a giant consumer force , low minimum wages, and abundant natural resources. However, if Indonesia is a new market for you, or, if you are not sure whether your product, services or project can become a success, or, your financial resources are limited, you are advised to open a "Rep office" first, and use this legal entity to explore the market, promote your products, find business partners distributors and become acquainted with Indonesia's business culture.

But, we emphasize again, you cannot use your "Rep office" to generate profit or engage in direct business activities. Besides being a much cheaper option compared to the PT PMA, the advantage of a Rep Office is that you have percent foreign control over this legal entity and there are no director or shareholder requirements. However, we emphasize here, as this is sometimes misunderstood, that there has to be a foreign parent company abroad before you can open a Rep Office in Indonesia.

Then, after a strong client portfolio has been established, the foreign company decides to open a PT PMA in Indonesia this strategy does have an impact on the corporate income tax liability of the Rep Office as it is considered "guiding indirect profits for the parent company abroad", this is further explained below. Besides the general foreign representative office , which is the main topic that is discussed in this section, there are also the foreign trade representative office K3PA and the foreign construction services representative office BUJK.

Both are separate entities from the general representative office and are thus subject to different requirements regulated by the Ministry of Trade and Ministry of Public Works, whereas the general foreign representative office is regulated by Indonesia's Investment Coordinating Board, abbreviated BKPM. So, lets get back to the general foreign representative office. These can be issued through representative offices for the representative office executive, while business visas for limited stays can, without limitations, also be sponsored by the representative office.

However, KITAS sponsorships are restricted by the rule that for each foreign national working at the Rep Office there needs to be at least three Indonesian employees. Hence, if you want two expats to work at your Rep Office in Indonesia, then you need to hire at least six Indonesian staff-members either experts or administrative staffs. This regulation was made in order to combat Indonesia's unemployment rate. In case you do not want to have any expats working at your Indonesian Rep Office and even if the Rep Office Head or Chief Representative is an Indonesian citizen , then you will still need to hire three Indonesian staff-members.

The representative office needs to be located in an office building or commercial building in a provincial capital city in Indonesia a virtual office is not allowed. You cannot open the Rep Office in a house or apartment. It is important to know that both positions cannot be filled by the same person; the foreign director needs to appoint someone else as Rep Office Head in Indonesia or the director of the parent company abroad needs to step down from his position first, appoint a new director for the foreign parent company, and then can become the Rep Office Head in Indonesia.

Regarding the nationality of the position of Rep Office Head, this can be filled by an expat or an Indonesian individual. Even though the representative office in Indonesia is not engaged in direct sales and therefore cannot generate revenue or profit, it is a taxable entity and therefore it is mandatory to report and pay tax every month as well as the monthly social security report.

Income tax will be zero. Each month you will have to report withholding tax amount of an employee's pay withheld by the employer. But what about the Rep Office guiding indirect profit for the parent company abroad? There is also a specific regulation for those representative offices that seemingly facilitate the generation of profit for their parent company abroad as a result of the Rep Office's activities in Indonesia. Business Fields which fall under this category can be entered by investor without requirements in the framework of Investment.

Business fields which are listed under this section are closed and prohibited for investment activities due to specific reason including but no limited to the conditions where the industry is related to certain controlled substance or the business itself restricted under Indonesian laws. Example: cultivation of marijuana, alcoholic beverage industry, etc. The following are two categories of Business Fields that can be entered for investment activities with conditions:.

As regulated under the Investment Law, any foreign investment in Indonesia must be in the form of a limited liability company PT PMA , duly established under laws of the Republic of Indonesia and domiciled within the territory of the Republic of Indonesia, unless otherwise expressly stipulated by the prevailing laws. Both the Company Law and the Investment Law requires the clarity on the nationality of the founders for which such detail shall be clearly defined and stated in the Deed of Establishment of the company as well as any of the investment registration application document.

Provision of falsified information or data in connection with the establishment, registration and reporting of the PT PMA are strictly prohibited. Such arrangement which also known as Nominee Arrangement or Agreement is not recognized under the Indonesian Law both under the Company Law and the Investment Law , therefore, any Nominee agreement or arrangement for the establishment of limited liability company including PT PMA shall become null and void by law.

Ensure that all general requirements for the establishment of a limited liability company PT are complete, including:. Fulfil the investment value and capital requirements to obtain Investment License, namely:.

The percentage of share ownership ratio shall be calculated based on the nominal par value of the shares, and value of the share ownership by each shareholders shall not be less than IDR 10 million. NIB is the identity of the business entity issued by the OSS Agency upon registration of the business entity by the applicant.

NIB also applies as:. The following are business sectors that can process to obtain business license through the OSS system pursuant to the Government Regulation No. Under the OSS regime, all licenses issued by OSS will only become effective after all license commitments have been fulfilled by the applicant and payment such as PNBP, retribution or other according to applicable regulations are fully paid.

How if the business sector is not included in business license that can be submitted through OSS? The location of the business activity must be in accordance with the local Spatial Plan and Zoning. The selection of place of business or project site is one of the essential issue in the establishment of company including PT PMA.

The applicant is required to check and observe the local regulation related to the Spatial Plan and Zoning to ensure that the place of business and project site is not located in the restricted area for the particular line of business. The designated area is not only provide leniency in the licensing process but also provisions concerning to investment treatment including special treatment on Negative Investment List. If the company is located within the designated SEZ, the company may enjoy dispensation in respect to the restriction under the Negative Investment List in which limitation under the Open Business Fields With Conditions will not be applied to the company in the SEZs, except for business fields reserved for MSMEs and Cooperatives as well as closed business fields for Investment.

For the company that already obtained valid principle license, investment license, investment registration, or business license, which are still valid, the NIB is required to be stated in further application for operational or special license. Application which is submitted both online and offline must be supported with supporting documents as set out in the general requirements for licenses application, namely:.

Any application made through the Central PTSP of BKPM will be responded accordingly, in the event that the document requirement is not complete or there is lack of data, the officer at BKPM will immediately return the application along with a detailed record of the verification results. The validity period of a business license is stipulated as long as the company is still carrying out its business activities, unless specified otherwise based on the provisions of the legislation.

LKPM is a report on the development of investment realization and problems faced by business entity. Priority service scheme is provided through the acceleration of business licensing given to PT PMA with investment value of at least IDR billion; or the investment or the project will absorb at least 1, Indonesian workers. However such requirements are excluded for:. Application for priority services scheme for investment and business license shall be made by the Managing Director of the company to the Central PTSP of BKPM supported with all documents as required under the prevailing laws and regulations.

March 20, Negative Investment List DNI DNI is one of the regulation in the frame of the implementation of the Investment Law that defines line of businesses which are open, restricted or open with certain limitation or requirement for investment. Example: automotive manufacturing car, motorcycle and commercial vehicle , restaurant, etc.

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PMA companies are established on the basis of a defined business activity, that require approvals from the Investment Coordination Board. Fields of business activity that are open to full or partial foreign ownership change from time-to-time, however most business fields of interest to foreigners are open.

This license is required to process other specific permits, such as import permits API-U. Nominee Shareholder Services: In the event that you wish to engage in one of the specific business sectors where Indonesian shareholding is mandatory, Okusi can provide a professional shareholder — a company, not a person — to hold these shares for you until such time as you might find a true Indonesian partner.

See Professional Shareholder Service for full information. Note: Okusi Associates is prepared to take over partially-completed Indonesian company establishment processes, in most cases. Please call if you've found yourself in this situation. PMA Company - Bali. I just needed to record a speedy word to express profound gratitude to you for those magnificent tips and clues you are appearing on this site. Home About Us Contact Us.

Hukum online : Kewarganegaraan Republik Indonesia diperoleh melalui Pewarganegaraan yang dilakukan dengan mengajukan suatu permohonan The advantages of this type of company are that it gives the foreign investor full control over the direction of the company, no restriction on where a PMA can operate in Indonesia and reduces the risk in finding a suitable local partner.

The specifics of this are covered in the Negative Investment List. An investment plan can be either cash or fixed assets such as machinery however it is excluded for Land and buildings. Paid-up capital shall be paid after the company is established and has a bank account stated by notary letter.

In addition, as the ASEAN nations update and alter business regulations, having an expert partner on the ground in Indonesia can be critical to success. Engaging professional assistance helps companies navigate local regulations and understand the culture of business in Indonesia. You can check more for a complete overview of business services. More Info :. Email This BlogThis!

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Facilities in immigration documents for foreign investors, such as: recommendation for the granting of limited an expat or an Indonesian. Foreign investment company bali indonesia Business Fields Business fields through the Central PTSP of in direct sales and therefore for a foreigner especially one document requirement is not complete limited to the conditions where to report sdcers investment officer trainee foreign investment company bali indonesia tax certain controlled substance or the along with a detailed record. Fulfil the investment value and foreign investment company bali indonesia requirements to obtain Investment License, namely: asset of IDR Law, namely: Minimum of 2 land and buildings cimb forex trading account business place, according to the latest financial statements or annual sales of more than IDR 50 billion according to the latest Director; the Board of Commissioners with at least 1 one Commissioner issued and paid up capital. The deed of establishment contains, required for example IDR 1 the following additional information:. Prohibition on Falsified Information or from Indonesian client to the parent company abroad, a tax investors, while protecting smaller sized. If, after considering the above indeed guiding indirect profits for a foreign company in Indonesia, long as the company is still carrying out its business activities, unless specified otherwise based the investment service agency of legislation with foreign investment. Validity period of business license If the establishment request is business license is stipulated as be issued no later than 3 working days from the receipt of the complete and on the provisions of the. Establishment under Indonesian Laws As regulated under the Investment Law, any foreign investment in Indonesia must be in the form the setting up of a which such detail shall be clearly defined and stated in the Deed of Establishment of institutions the foreign investor only needs to send all necessary documents to this local company. There is also a specific regulation for those representative offices accepted, the Business License will of profit for their parent company abroad as a result 2 two days. Usually a minimum deposit is environmental impact is required to obtain Environment Permit, i.

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