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Are you on the journey to register your business in Indonesia? You’re in the right place!  Navigating the registration process as a foreigner in a new country might seem like a daunting task, but fear not – we are here to help you.  Here, we will walk you through the requirements, process, and essential tips for a smooth entry into Indonesia’s dynamic business landscape.  Types of Business Entities in Indonesia Choosing the right type of business entity is crucial, not only to comply with local regulations but also to protect personal assets. There are numerous business entity options available in Indonesia based on specific needs and preferences: PT Local PT (Perseroan Terbatas) is a limited liability company established and owned by locals (individuals, companies, or foundations).  A small company (Perorangan/individual) with IDR 5 billion maximum capital can have only one local shareholder, who also acts as the director. A company with IDR 50 million to unlimited capital must have two minimum local shareholders. Plus, have one minimum commissioner and director.  Even if you are a foreigner, you can still be a company director for a local company. But, there are certain job positions where foreigners are restricted, such as human resources director. Representative Office If you plan on doing business market research before generating revenue in Indonesia, setting up a representative office is the route for you.  It is the fastest way to establish your foreign business entity in Indonesia with no capital required. PT PMA  As a foreigner, if you want to be a shareholder or generate revenue in Indonesia, you should register your business as a PT PMA.  PT PMA (PT Penanaman Modal Asing) is usually known as a foreign-owned company. It is a limited liability company which allows foreign direct investment. Besides taking control of your business, there are other benefits to PT PMA registration. It includes but not limited to: Starting operational preparations Getting work and stay permits for your foreign employees Purchasing assets under the company name Getting industry licenses  Registering your products   Ownership of Foreign-Owned Company In a significant shift due to the Indonesian Omnibus Law, the government has made most business classifications on the Indonesia Positive Investment List available for 100% foreign ownership. The business classifications include sectors in the digital economy, energy, infrastructure, and tourism. Moreover, there are 46 business lines open with partial restrictions for foreign ownership and 51 lines that need partnership with cooperatives and MSMEs. But, there are still sectors closed for foreign ownership. Be informed on the business line you are interested in, and let Sam Consulting guide you through the evolving landscape of business ownership in Indonesia.   Risk-Based Business Licensing In addition to relaxing restrictions on foreign investment, the Indonesian government has also introduced a Risk-Based Business Licensing procedure. The risk level associated with your business, based on its potential hazards, determines the requirements for business licenses.  The government will conduct a comprehensive risk analysis which comprises of: Identifying the relevant business activity Assessing the hazard level;  Assessing the potential for the occurrence of any hazard Determining the risk level and business scale rating Determining the type of business licensing. Afterward, the government will classify your business activities into one of the following risk-level categories. Low-risk businesses Medium-low risk businesses Medium-high risk businesses High-risk businesses. This procedure benefits low and medium-risk businesses. Ultimately, if your business has a lower risk, you will have less complex licensing requirements. Requirements for Foreign-Owned Company Registration To start registering your foreign-owned company in Indonesia as a foreigner, prepare the requirements below: Company’s Business Classification Your business activities must match the classification listed in the Indonesian Standard Business Classifications and the Positive Investment List. This will help you know if your company can be 100% owned by foreigners, partially owned, or closed to foreigners. Let us know your company’s business activities, and we will double-check to make sure your business classification matches your intentions.  Company Name When naming your foreign-owned company, you can use English or non-Indonesian language. But, make sure that the name has not been used before and is not similar to other registered names unless allowed by the name owner.  Follow the pointers below to meet the standard:  Contain at least three words with no obscene or misleading words Cannot have words that mean company or legal entity such as Ltd, Sdn, or Associate Written in Roman Alphabet with no numbers, special characters, or a mix of both. Company Structure Shareholders There must be at least two shareholders with either a mix of local and foreign national or 100% foreign-owned. A public notary must approve its Articles of Association. The share of a foreign-owned company is subject to the Positive Investment List of the Indonesia Investment Coordinating Board (BKPM), which varies depending on the business classification allowed. Commissioners and Directors The company must have one commissioner and one director minimum. The local or foreign commissioner oversees directors and ensures company activities align with its objectives and comply with the law and regulations.  One of the directors must hold an Indonesian tax card (NPWP). The Indonesia Investment Coordinating Board (BKPM) recommends having at least one local director. If all directors are foreigners, they must obtain a stay permit (KITAS or personal domicile letters) and work permits.  The general meeting of shareholders (RUPS), responsible for company management, elects the directors. Then, they can legally represent the company, sign contracts, and handle taxation documents. Company Domicile and Capital Domicile Ensure your foreign-owned company has a verified location supported by a domicile letter. It should be an unrestricted area based on its business activities.  Capital There is a minimum required capital of IDR 10 billion, excluding the investment value of land and buildings. The paid-up capital needed is 100% of the minimum required capital, which makes it IDR 10 billion or higher, depending on the business classification. The Capital is not required to be deposited during the process of establishing the company, however, it should be gradully inserted in the

  Introduction to KITAP KITAP (in English: permanent residence permit card) is a stay permit given to foreigners who want to stay in Indonesia for a long time. It is valid for 5 years and can be extended continuously as long as the residence permit is not revoked. Even you have to apply for a new KITAP, you do not have to extend your visa because it is automatically extended.   Way to Get the Ultimate Stay Permit KITAP Furthermore, to get a KITAP, it is required to held a KITAS and having extended it multiple times before applying for KITAP.   Check If You Are eligible for KITAP?   Since KITAP will give you so many advantages during your stay in Indonesia, not all people are eligible to apply for this stay permit. You are eligible to hold KITAP if you are: Married to an Indonesian citizen. An investor, director, or commissioner in an Indonesian Company. Planning to retire in Indonesia. An Indonesian regaining your citizenship. Requirements to Get KITAP In addition, if you are willing to get KITAP, here are the requirements: obtained a KITAS (limited stay permit) and had extended multiple times (6 years in total). have a sponsor. If you are married to an Indonesian, your spouse will be your sponsor. working with the same Indonesian company for five years in a row in the same position. for retirees, should have no work intention in Indonesia.   Documents You Need to Get KITAP   Besides the requirement you need to fulfill, there are some documents needed. They are: Passport (active for at least 18 months). KITAS. Sponsor letter. Indonesian ID (KTP) of your sponsor. Tax obligation main number (NPWP). Statement letter stated you have no work intention in Indonesia (for retirees). work permit (IMTA) and the legal documents of the sponsoring company (for foreign investors). The application process approximately takes 3 months.   Can KITAP Holders Work in Indonesia? Only those married to an Indonesian and who work as professionals in Indonesia have the right to work in Indonesia. There are some restrictions that apply for KITAP holders to work in Indonesia: First, the applicant only can work for a company if the company obtains the work permit for the applicant (IMTA) Secondly, spouse KITAP holders, they can choose to start a business as a sole entrepreneur without hiring anyone.   How to Apply for a KITAP? Even the application requirements differ, having a sponsor is a must for all KITAP applicants. The sponsor can be an Indonesian spouse, a PT PMA company, or an agent. To apply for KITAP, retirees and foreign investors need the same documents for the application. They consist of: 1. Passport. 2. KITAS. 3. Sponsor letter. 4. Indonesian ID (KTP) of the sponsor. 5. Tax Obligation Main Number (NPWP). 6. Foreign investors also need to bring their work permit (IMTA) and the legal documents of the sponsoring company.   Benefits If You Hold a KITAP There are some benefits if you hold a KITAP. Here they are: Indonesian ID with a validity of five years. Local driver’s license (SIM) with a validity of five years. Bank account. Credit card. Loan. Local prices to tourist attractions. MERP with a validity of two years, allowing you to enter and exit the country as you like. If you are married to an Indonesian, you are eligible for a joint ownership over a property.   The Types of KITAP Do you know the types of KITAP? There are three types of KITAS as follows: Spouse KITAP It must be proven that the applicant is already married with an Indonesian for at least 2 years. If the marriage process was held abroad, Surat Nikah or Marriage Letter notification from the Indonesian Embassy is needed. In addition, this also means that the applicant does not need to held a KITAS to apply for a KITAP under these circumstances.   Foreign investors, directors, and commissioners KITAP KITAP can also be applied by applicants who work as directors or commissioners in the same Indonesian company for the last four years in a row. Requirements that must meet before an applicant can apply for KITAP are : 1. Applicant must have a work permit (IMTA) 2. Hold a limited stay permit (KITAS) It is important to notice that the job position of the applicant must not have changed during the period required. Applicant must prove the eligibility with the required supporting documentation.   Retirement KITAP To spend retirement in Indonesia is a big dream of retirees all over the world. To apply for KITAP, retirees must be over 55 years old and willing to commit to not working during their stay in Indonesia.   Sponsorship for KITAP in Indonesia What is Sponsor? Law Number 6 of 2011 concerning Immigration regulates the definition of sponsor or guarantor. A guarantor is a person or corporation that is responsible for the presence and activities of foreigners while in the territory of Indonesia.   Who Are Eligible to be a Sponsor? Based on the laws and regulations in Indonesia, there are three legal subjects that can become sponsors for foreigners who want to stay in Indonesia. The guarantor and sponsor have a very important position in the visa process. Spouse of foreign citizens who will come to Indonesia, in the case of mixed marriages. Foreign nationals who are married to Indonesian citizens can obtain guarantees from their spouses who are Indonesian citizens. Spouses of Indonesian citizens can be the person in charge of regular visas. Every Indonesian citizen can also become a guarantor or sponsor of a visa for foreign citizens. Visas that can be sponsored by ordinary Indonesian citizens are Visa on Arrival and Repatriation Visa. Repatriates are foreign ex-Indonesian citizens who wish to live in the Indonesian Territory. Indonesian companies can also become sponsors or guarantors for Foreign Workers (Foreign Citizens who come to Indonesia with the aim of working). However, not all Indonesian companies can become sponsors or guarantors for