How to Set Up a Company in Indonesia: 2026 Complete Guide

Setting up a company in Indonesia in 2026 is not as difficult as it seems, but it is also not something you would risk doing without prior planning. Indonesia has modernized many of its rules, especially for foreign investors; however, you still need to select the suitable structure, line up the necessary documents, and adhere to a few local concepts, such as KBLI codes, the Positive Investment List, and the OSS system.​

This guide walks you through Indonesia company formation in a founder‑friendly manner, from choosing suitable entity to Indonesia company registration in 2026, and the process after it’s on paper.

Big Picture: How Indonesia Treats Business Setup

When you set up a company in Indonesia, you are effectively dealing with three levels at once:

• Company law – how your legal entity is formed and governed
• Investment rules – what foreign ownership is allowed in your sector
• Licensing and tax – what permits, numbers, and ongoing filings you need to operate day to day

Indonesia has centralized several companies and licensing procedures through its Online Single Submission (OSS) system. Also, it has replaced the old “Negative Investment List” with a more flexible “Positive Investment List”. But the basics still matter: you choose an entity type, you get it incorporated via a notary and the Ministry of Law and Human Rights, then you use OSS to get your main business identification number and licenses.​

If you keep that flow in mind – entity, investment rules, OSS – everything else starts to feel like detail rather than chaos.

Step 1: Choose Your Indonesia Business Setup Structure

Most serious businesses, especially those involving foreign owners, use one of three main setups:

• Local PT (Perseroan Terbatas) – a local limited liability company
• PT PMA (Penanaman Modal Asing) – a foreign investment limited liability company
• Representative office (KPPA / KP3A / BUJKA, etc., depending on sector) – for limited, non‑revenue activities

Local PT (Domestic Company)

A standard PT is a limited liability company owned by Indonesian individuals or entities. Key points:​

• Minimum two shareholders; both must be local.
• At least one director and one commissioner; they should be Indonesian residents for practical purposes.
• Capital requirements are lower than for a PT PMA, and some micro/small categories can start from around IDR 50 million in paid‑up capital, depending on classification.​

Foreigners cannot directly own shares in a pure local PT. Sometimes local partners or nominee structures are used, but those come with real legal and risk questions.

PT PMA (Foreign Investment Company)

If you are a foreign founder or a foreign company, PT PMA is usually your main route to Indonesian company formation.​

Typical features:

• Minimum two shareholders, who can be foreign individuals or foreign entities, or a mix of local and foreign.​
• At least one director and one commissioner; often, the director is a resident or someone with appropriate work authorisation.​
• The minimum investment plan is often set at IDR 10 billion or more per business line (“project”), and minimum paid‑up capital in the billions of rupiah range (commonly at least IDR 2.5 billion), subject to current rules and the sector.​

A PT PMA allows foreign investors legally own and operate a business in Indonesia. Still the exact ownership ceiling depends on whether your sector is fully open, capped, or restricted under the Positive Investment List.​

Representative Office

A representative office is not a full Indonesian business setup for trading. It is more like a local presence for:​

• Market research
• Liaison and promotion
• Coordinating activities for the head office

Representative offices are not allowed to generate revenue directly or sign local sales contracts in their own name. There are different flavours (general, trade, construction, etc.), each with specific rules. They are quicker to set up and cheaper to maintain, but they are not a substitute for a PT PMA if you plan to trade, invoice, or hire at scale.

Read more – How to Register a Company in Oman as a Foreigner?

Step 2: Check Foreign Ownership Rules & KBLI Codes

Before you get too attached to a structure, you need to know:

• Is your business activity open to foreign investment, and up to what percentage
• Which KBLI codes (Indonesia’s business classification system) actually describe what you want to do

Positive Investment List (What you are allowed to do)

Indonesia’s Positive Investment List sets out which sectors:​

• Are fully open to 100 percent foreign ownership
• Are partially open with ownership caps (for example, 49 percent, 67 percent)
• Are reserved for local MSMEs or require special partnerships

If your planned activity is in a strategic or sensitive sector, you might see a foreign‑ownership cap or special conditions. If it is in a priority sector, you may even see incentives.

Checking these early matters because:

• It tells you whether PT PMA is viable for your activity
• It shapes how you structure shareholding between foreign and local parties

KBLI (Business Classification) Codes

Every Indonesian company registration needs to align its stated business scope with one or more KBLI codes (Klasifikasi Baku Lapangan Usaha Indonesia).​

Those codes:

• Define what activities your company is legally allowed to perform
• Drive what licences OSS will expect you to obtain
• Influence how you are treated for statistics and sometimes for incentives

A SaaS business, for example, will pick a different KBLI than a manufacturing plant or a retail store. Getting the codes right means your licences and tax treatment will match what you actually do.

Step 3: Name Your Company & Drafting Deed

Once you know your structure and KBLI, you can move into the formal Indonesian company formation process.

Reserve & Approve Company Name

Your name must:​

• Be unique and not too similar to existing registered companies
• Follow local rules about language, sensitive words, and length
• Be compatible with your business activities

Name approval and reservation are done with the Ministry of Law and Human Rights (MOLHR) through its AHU system. It is worth having alternative options in case the first choice is rejected.

Draft the Deed of Establishment

An Indonesian notary prepares the Deed of Establishment (also called the deed or AKTA) and includes:​

• Company name and domicile (registered address)
• Objectives and line(s) of business (linked to KBLI codes)
• Share capital (authorised, issued, and paid‑up)
• Number and value of shares, and who owns what
• Details of directors and commissioners, and how they are appointed
• Basic governance rules (similar to Articles of Association)

For PT PMA, capital commitments and the foreign shareholding structure must reflect the minimum investment rules.​

The notary then notarises the deed and submits it electronically to the Ministry of Law and Human Rights for approval.

Step 4: Get Legal Entity Status & Core Registrations

After the deed is notarized, the following steps take the company from “planned” to “legally existing.”

MOLHR Approval (You Become a Legal Entity)

With the notarised deed, the notary applies to the Ministry of Law and Human Rights for ratification. Once approved:​

• The Ministry issues a Decree/Certificate of Incorporation acknowledging your company as a legal entity.​
• Your company is now formally a PT or PT PMA under Indonesian company law.

This is the legal birth of the company, but you still cannot fully operate until you complete the OSS and tax steps.

OSS, NIB, And Business Licensing

Indonesia uses the OSS (Online Single Submission) platform to handle business identification and licensing. Through OSS, you obtain:​

• NIB (Nomor Induk Berusaha) – your Business Identification Number, which also serves as a basic business licence and automatically registers you for social security and some other obligations.
• Sector‑specific licences – depending on your KBLI codes, OSS will prompt you for additional licences or certifications (for example, for manufacturing, trading, fintech, etc.).

Once you have NIB and the right “risk‑based” licences (light or heavy, depending on your activity’s risk level), you are much closer to actually operating.

Step 5: Handle Tax, Bank Accounts, & Practical Setup

A company is not really usable until it has tax numbers and a bank account.

NPWP (Tax ID) And Tax Registration

Every company needs an NPWP (Nomor Pokok Wajib Pajak), which is its Tax Identification Number.​

With NPWP, you can:

• File corporate income tax returns
• Register for VAT (if required)
• Handle employee withholding and other tax obligations

Some of these registrations are tied into OSS and NIB; others may require separate engagement with the tax office.

Open A Corporate Bank Account

Once you have:

• Deed of Establishment and MOLHR approval
• NIB and NPWP
• IDs and details for directors and authorised signatories

You can open a corporate bank account in Indonesia.​

Banks will:

• Ask about ownership and management
• Look for supporting documents like the MOLHR decree, NIB, NPWP, deed, and IDs
• Potentially ask about your business model and expected transaction flows

For PT PMA, they may want additional comfort around foreign owners and capital injection. Bank onboarding is where an Indonesian business setup meets global KYC expectations.

Step 6: Understand Capital, Costs, & Timelines

When you think “how to set up a company in Indonesia,” you also need to think “how much capital and time do I actually need?”

Capital Requirements

Broadly:

• Local PTs can have relatively low minimum capital requirements, especially in micro/small classifications, sometimes starting at around IDR 50 million.​
• PT PMAs must meet much higher investment and paid‑up capital thresholds, often at least IDR 10 billion in investment plan and IDR 2.5 billion in paid‑up capital per business line, subject to current rules and sector.​

Authorities can ask to see evidence that capital has been injected and that the company is operating at the scale promised, especially for foreign‑owned entities.​

Cost Components

Your budget will typically include:

• Notary fees for preparing and notarizing the deed
• Government fees for name reservation, MOLHR ratification, and OSS registrations (usually modest but present)​
• Professional fees if you use consultants or law firms for an Indonesian company registration and licences
• Capital injection amounts (which may sit in the company bank account to be used for operations)

Different service providers quote different “all‑in” packages, especially for PT PMA incorporation, but they are essentially covering the same official steps plus their own advisory time.

Timeline

For a straightforward PT PMA with everything in order, public sources in 2025 suggest:​

• A few weeks to clear name, draft deed, and obtain MOLHR approval
• Additional weeks to secure NIB and sector licences via OSS, plus NPWP
• Parallel work to open a bank account once you have core documents

Plan for 1-3 months to be fully operational if you are responsive and your sector is not heavily regulated. More complex sectors or locations can stretch timelines.

Step 7: Hiring, Visas, & Local Substance

If foreign directors or key staff will be based in Indonesia, you need to think about:

• Work permits and stay permits (KITAS) for foreigners
• Minimum ratios of local to foreign employees in certain roles, depending on sector regulations
• Compliance with labour law on contracts, minimum wages, social security, and termination rules

A PT PMA is often a prerequisite for sponsoring foreign work permits. Representative offices have different, sometimes more limited, options.​

Even if your founding team stays abroad, hiring local staff triggers Indonesian labour and social security obligations, which should be part of your Indonesia business setup plan from day one.

Step 8: Ongoing Compliance After Indonesia Company Registration

Once your Indonesian company registration is complete, you join the world of recurring obligations.

Typical items include:

• Monthly or periodic tax filings (VAT, withholding, income tax instalments) and annual corporate income tax returns​
• Annual company reporting and updates when directors, commissioners, shareholders, or capital structures change
• Financial statements and, for larger companies, audits under Indonesian standards
• Licensing renewals or post‑licensing obligations, especially in regulated sectors

PT PMAs often face closer scrutiny on whether they are meeting investment and capital plans, especially during the early years. Working with local accountants or compliance firms is common to avoid missing deadlines.​

Read more – Foreign Ownership Rules in Canada : What Founders Must Know

PT PMA Vs Representative Office: Quick Scenario Guide

To make the decision tree more tangible:

• If you want to sell products or services, invoice clients, sign contracts, and hire at scale, a PT PMA is usually the right Indonesia business setup for foreign investors.​
• If you only want to test the market, conduct research, or coordinate with a foreign head office without local revenue, a representative office might be enough as a first step.​

Many foreign entrepreneurs start with rep offices to test a specific region (like Bali or Jakarta) and then convert to a PT PMA once they are confident the market supports a full operation.

The Final Words

If you wanted a condensed map of “how to set up a company in Indonesia” in 2026, it would look something like this:

1. Decide whether you need a local PT, a PT PMA, or just a representative office, based on ownership, sector, and revenue plans.​
2. Check the Positive Investment List and confirm what foreign ownership is allowed in your business line. Pick the right KBLI codes for your activities.​
3. Reserve a compliant company name and have a notary draft your Deed of Establishment, with share structure, capital, directors, commissioners, and business objectives.​
4. Get MOLHR approval so the company becomes a legal entity, then register through OSS to obtain NIB and the required risk‑based licences.​
5. Secure NPWP for tax purposes, open a corporate bank account, and inject any required paid‑up capital.​
6. Set up payroll, accounting, and compliance processes, and handle work permits if foreign staff will be based in Indonesia.​

Do that, and your Indonesian company formation with Enterworld will not just produce a certificate. It will give you a usable vehicle that can sign contracts, hire people, and scale inside one of Southeast Asia’s most dynamic markets.

Frequently Asked Questions About Set Up a Company in Indonesia

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