Indonesia Company Setup: Costs, Structures and Process 2026
Published 23 September 2026. Reading time: 10 minutes. By The Indonesian Lawyer.
Indonesia company setup for a foreign investor almost always means registering a PT PMA (foreign-owned limited liability company). The standard requirement is IDR 10 billion in planned investment per business line, per location, and IDR 25 million or more paid up in capital, though actual figures depend on the KBLI code you choose. Setup through OSS (the national licensing system) takes roughly two to six weeks once documents are in order, before you factor in a KITAS visa, tax registration and any sector licenses. A local PT with an Indonesian nominee, by contrast, costs less to start but exposes the real owner legally and is not the route we recommend to foreign clients.
Table of contents
- Which company structure fits your business
- PT PMA requirements in 2026
- The registration process step by step
- What Indonesia company setup actually costs
- KBLI codes and why they decide everything
- Setting up in Jakarta versus other cities
- The mistake that costs foreign founders the most
- What happens after incorporation
- Frequently asked questions
Which company structure fits your business
Four structures cover almost every case we see, and picking the wrong one is expensive to unwind later. A PT PMA is a limited liability company that can be 100% foreign owned in most sectors, can hire foreign staff on KITAS, can invoice clients and can own a business license in its own name. It is the only structure that lets a foreigner legally control and profit from an operating business in Indonesia.
A PT local (also called PT biasa) must be owned by Indonesian citizens or entities. Some foreigners use one with a nominee arrangement to save on the capital requirement. We advise against this. Nominee agreements have no standing under Indonesian company law, the nominee is the legal owner on paper regardless of any side letter, and we have handled disputes where a nominee refused to transfer shares back or a family member of a deceased nominee claimed the company.
A representative office (KPPA) lets a foreign company research the market or coordinate operations in Indonesia without generating local revenue. It cannot sign sales contracts or issue invoices to Indonesian customers. It suits a company testing the market before committing capital.
A branch office is permitted only in specific regulated sectors such as banking, insurance, oil and gas services, and construction, and requires approval from the relevant ministry. Most commercial businesses cannot use this route.
A CV (commanditaire vennootschap) is an Indonesian partnership structure open only to Indonesian citizens as partners. It has no relevance to a foreign investor beyond understanding that a local partner might propose it instead of a PT PMA, usually to avoid the PT PMA capital threshold. That trade-off usually is not worth it once you weigh in the legal exposure.
| Structure | Foreign ownership | Can generate revenue | Typical use |
|---|---|---|---|
| PT PMA | Up to 100% in most sectors | Yes | Standard vehicle for foreign-owned trading, service or manufacturing business |
| PT local | 0% (Indonesian owners only) | Yes | Indonesian-owned SMEs; not recommended for foreign control via nominee |
| Representative office (KPPA) | Foreign parent company | No | Market research, liaison, pre-investment presence |
| Branch office | Foreign parent company | Yes, in permitted sectors only | Banking, insurance, oil and gas, select regulated sectors |
PT PMA requirements in 2026
The core PT PMA requirement is planned investment of more than IDR 10 billion, excluding land and buildings, per five-digit KBLI code and per business location. This is a planned investment figure, not cash that must sit in the bank on day one. Of that, at least IDR 25 million per shareholder must be recorded as paid up capital, and in practice most notaries and the OSS system expect authorized capital of at least IDR 10 billion with 25% paid up, so around IDR 2.5 billion paid up is the working benchmark most lawyers use. Confirm the exact figure for your KBLI code before committing, because some sectors carry higher or lower thresholds and some are closed or restricted to foreign investment entirely under the Positive Investment List. You also need a minimum of two shareholders, one director, and (for most structures) one commissioner. Shareholders can be individuals or corporate entities, foreign or a mix of foreign and Indonesian. A registered Indonesian business address is mandatory, and it must be zoned for commercial use; a residential apartment lease usually will not satisfy the domicile requirement, which trips up a surprising number of first-time founders who sign a flat lease before checking.
The registration process step by step
The process runs through the OSS (Online Single Submission) system administered by the Ministry of Investment (BKPM), coordinated with a notary for the deed of establishment. In sequence:
- Name reservation and KBLI selection. Choose your business classification codes and reserve a company name that has not been used.
- Deed of establishment. A notary drafts and executes the Articles of Association, setting out shareholders, capital, directors and commissioners.
- Ministry of Law and Human Rights approval. The deed is registered and the company obtains legal entity status (SK Kemenkumham).
- NPWP (tax ID) and NIB (business registration number) issued through OSS. The NIB now also functions as the import license and, for many sectors, the business license itself.
- Sector-specific licenses, if your KBLI requires them: for example a construction business needs additional certification, a restaurant needs a health and hygiene permit, a clinic needs Ministry of Health approval.
- Company domicile confirmation and BPJS registration (health and employment social security) once you plan to hire staff.
Realistic timeline is two to six weeks for a straightforward KBLI with no special licensing, assuming documents are complete and signatures are not delayed by shareholders being overseas. Add two to four weeks if the KBLI needs a technical recommendation from a sector ministry, and add the KITAS processing time separately if the director or a shareholder needs a work and stay permit, which typically runs another four to eight weeks in parallel.
What Indonesia company setup actually costs
Costs vary by service provider, city and KBLI complexity, so treat the ranges below as a planning guide and confirm a fixed quote before engaging anyone. Government fees are relatively fixed; professional fees are where quotes differ.
| Item | Typical range (IDR) | Notes |
|---|---|---|
| Notary deed and legal entity registration | 8,000,000 to 20,000,000 | Varies by notary and complexity of the Articles of Association |
| NIB, NPWP and OSS registration | Included in service fee or 2,000,000 to 5,000,000 standalone | Government processing itself has minimal official fees |
| Sector license or technical recommendation | 5,000,000 to 30,000,000+ | Depends heavily on sector; some require site inspection |
| Registered domicile / virtual office (if used) | 5,000,000 to 15,000,000 per year | Must be zoned for commercial use; check this before signing |
| KITAS for one director (separate process) | 15,000,000 to 25,000,000 | Depends on visa category and sponsor requirements |
| Paid up capital | From roughly 2,500,000,000 | Working benchmark for most KBLI codes; confirm for yours |
The paid up capital is not a fee, it is money that becomes the company's own working capital once deposited into the corporate bank account, so it is not lost. The genuine cash cost of setup, meaning notary, licensing and registration fees you will not see again, typically lands between IDR 15 million and IDR 60 million depending on how many licenses your KBLI requires.
KBLI codes and why they decide everything
Your five-digit KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) code determines your capital requirement, whether foreign ownership is permitted at all, which licenses you need, and which government body reviews your application. Two businesses that look identical from the street, say a coffee export company and a coffee retail cafe, sit under completely different KBLI codes with different rules. Getting the KBLI wrong is one of the most common and most expensive mistakes in Indonesia company setup, because changing it later can mean re-registering licenses, amending the deed, and in some cases re-applying for approvals you already paid for. Some sectors remain closed to foreign investment or capped at a minority stake under the Positive Investment List (Daftar Positif Investasi), including some media, certain retail categories, and parts of the transport sector. A short consultation before you file, rather than after, is the difference between a two-week registration and a three-month correction.
Setting up in Jakarta versus other cities
The legal requirements for Indonesia company setup are national: the same OSS system, the same KBLI list and the same PT PMA thresholds apply whether you incorporate in Jakarta, Surabaya, Medan, Semarang or Makassar. What differs by city is practical: domicile costs, notary availability, and how quickly local government offices process supporting approvals such as building-related permits if you plan to lease commercial space. In Jakarta, a registered office in areas such as Sudirman, Kuningan or Kemang typically costs more for a virtual or serviced office than the same setup in a secondary city, but Jakarta also has the deepest bench of notaries and OSS-experienced staff, which tends to reduce back-and-forth on document corrections. If your business is genuinely national in scope, incorporating in Jakarta is often the practical default even if operations happen elsewhere, since head office functions, banking relationships and many sector ministries are based there. If your operation is entirely local to another city, such as a hotel or property business in Surabaya or Lombok, there is no legal advantage to a Jakarta address and a locally zoned domicile is usually simpler.
The single most expensive mistake: signing a lease, hiring staff or taking client payments before the PT PMA is registered and the NIB is issued. We regularly see foreign founders operate for months on a tourist visa or a residential address, assuming they can formalize things once revenue starts. Contracts signed before the company legally exists are not enforceable by the company, income earned before registration can create a tax and immigration exposure that is hard to unwind, and landlords sometimes refuse to backdate a domicile letter. Register first, operate second.
What happens after incorporation
Incorporation is the start of the compliance calendar, not the end of it. Once your PT PMA is registered, you are expected to submit an LKPM (investment activity report) to BKPM every quarter, even if the company has no activity yet; missing this repeatedly can flag the company during license renewal. You need monthly and annual tax filings through the Directorate General of Taxes regardless of whether the company is profitable. If you hire staff, BPJS Kesehatan and BPJS Ketenagakerjaan registration is mandatory, not optional. And if the company plans to build, renovate or occupy a commercial building, you will need a PBG (building approval) and eventually an SLF (certificate of worthiness of function) before legally operating from that building. Many foreign owners underestimate how much ongoing filing a PT PMA requires compared to running a business back home, and this is usually where a retainer with a local firm pays for itself, catching a missed LKPM or an expiring KITAS before it becomes a fine or a licensing hold.
Frequently asked questions
How much does it cost to set up a company in Indonesia?
Cash costs for notary fees, licensing and registration typically range from IDR 15 million to IDR 60 million depending on the sector and number of licenses required. Separately, a PT PMA requires paid up capital of roughly IDR 2.5 billion or more depending on the KBLI code, which becomes the company's own working capital rather than a fee.
Can a foreigner own 100% of a company in Indonesia?
Yes, in most sectors, through a PT PMA. Some sectors are restricted or closed to foreign ownership under the Positive Investment List, including parts of media, certain retail and some transport categories. Confirming your KBLI code against the current list before filing is essential, since the restriction level changes by sector and can change with policy updates.
How long does it take to register a company in Indonesia?
A straightforward PT PMA with a standard KBLI code typically takes two to six weeks through OSS once documents are complete. Add two to four weeks if a sector-specific technical recommendation is required, and add the KITAS processing time, usually four to eight weeks, if a director or shareholder needs a work and stay permit.
What is the minimum capital to open a PT PMA?
The standard threshold is planned investment above IDR 10 billion per KBLI code per location, with at least IDR 25 million per shareholder as paid up capital. In practice most notaries structure this so that around IDR 2.5 billion is paid up, roughly 25% of the authorized capital, though the exact figure depends on your specific business classification.
Do I need a local partner to start a business in Indonesia?
No, not for most sectors. A PT PMA can be 100% foreign owned without an Indonesian partner. A local partner or nominee is sometimes used to access the lower capital threshold of a PT local, but nominee arrangements are not legally protected for the foreign party and carry real risk of losing control of the company.
What is the difference between a PT PMA and a representative office?
A PT PMA is a full limited liability company that can invoice clients, sign contracts and generate revenue in Indonesia. A representative office can only conduct market research or liaison activities for a foreign parent company and is legally barred from earning local revenue or signing commercial sales contracts.
Which KBLI code should I use for my business?
There is no universal answer, since KBLI is a five-digit code specific to your exact activity, and the wrong code can mean the wrong capital threshold, missing licenses or a foreign ownership restriction you did not expect. This is worth checking with a lawyer before filing rather than after, since correcting a filed KBLI is slower and more expensive than getting it right the first time.
Is Jakarta the best place to register a company in Indonesia?
The legal process is identical nationwide, so Jakarta is not required by law. It is a practical default for businesses with a national scope or foreign management, because of notary availability and proximity to ministries. A business operating only in another city, for example in Surabaya, Batam or Lombok, generally has no advantage in registering in Jakarta instead of locally.
If you are working through any part of Indonesia company setup, from choosing between a PT PMA company registration and a local structure, to the practical steps in how to set up a PT PMA in Indonesia, or you need a corporate lawyer in Indonesia to review contracts and KBLI selection before you file, send us the details.
You can reach The Indonesian Lawyer directly on WhatsApp at +62 877-9626-0478 or through our contact page with your business plan and questions. The first consultation is free.