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How to set up a company in Indonesia

Sunday, January 21, 2007

The process of establishing a limited liability company is actually too complicated to be explained in a blog post, so I'll just give you a summary:
  1. Minimum Two shareholders are required
  2. Minimum authorized capital is IDR 20 million
  3. You need to reserve the Company's name (trade ministry), obtain a domicile license (local authority), obtain the company tax number (tax office), and re register everything at the ministry of trade.
A notary can do all those task for you, for a fee. There is no specific time period for the whole process so it depends in each case.

But, if the company is a Foreign Direct Investment (FDI) Company, then there are some other procedure that must be followed such as acquiring foreign capital license from the Central Bank and BKPM licenses. For that, you might need to either hire a lawyer or use investment consultancy services.

There are so many licensing services in Indonesia, each has their own rate. Okusi associates charges 2,550 USD. Healy Consultants charge up to 9,000 USD for 1st year for FDI. But, I also know that there are also consulting firms who charges only 800-1000 USD.

To get a broader view on investment in Indonesia and the judicial protection granted to investors, I suggest you to read this article from the US Embassy. The types of foreign investment licenses is discussed here. Please pay attention that I do not guarantee that both sites I've mentioned earlier contained an up to date information. If you want the latest information, use the search box in the right panel and search for foreign investment licenses. It should bring you to BKPM's (Coordinating Agency for Foreign Investment) website which should contained the latest info.