Indonesia

1. Foreign Investment Limited Liability Company (PT PMA)
2. Representative Office (KPPA)

For those wishing to engage in profit-generating activities in Indonesia, setting up a PT PMA company, which can be wholly or partially foreign-owned, is the preferred choice. However, if the aim is limited to non-income generating activities, such as service promotion, market feasibility studies, or creating a local contact office for the parent company, establishing a representative office (RO) or KPPA is appropriate.

1. A minimum capital requirement of IDR 10 billion or US$800,000.00, with at least 25% to be provided as the minimum paid-up capital.
2. At least two shareholders, be they corporate or individual.
3. A minimum of one local director.
4. A minimum of one commissioner, who can be a foreign citizen. However, if they lack a work permit (KITAS), a local candidate must be appointed to represent the company during the incorporation process.

1. Letter of Appointment from the parent company abroad.
2. Articles of Association of the parent company, duly legalized by a public notary and the relevant embassy. It should include any amendments in English.
3. A copy of the valid passport of the proposed foreign national as the RO Head, or a copy of the identification card number and tax number of the Indonesian national proposed as the RO Head.
4. A copy of the parent company’s registration with the Chamber of Commerce.
5. A Power of Attorney to sign the application if represented by another party.
6. A Letter of Intent, duly legalized by a public notary and the relevant embassy.
7. A Letter of Statement from the RO Head affirming their commitment to stay and work exclusively in the position of RO Head without engaging in other businesses in Indonesia.

Indonesia maintains a flat corporate tax rate of 25% (22% in 2020), with specific considerations for resident companies. The tax treatment depends on whether the company is categorized as resident or non-resident, determined by its incorporation in Indonesia. Foreign companies with permanent establishments (PE) in Indonesia are taxed in the same manner as resident taxpayers.

Resident companies can access a range of tax incentives. For businesses operating in high-priority sectors or specific areas, potential benefits include income tax relief and a reduction in net income, which may reach up to 30% of the invested amount, prorated at 5% for six years of production.

Foreign individuals wishing to work in Indonesia require sponsorship by an Indonesian company to obtain a Work Visa (IMTA). The petitioning company must demonstrate to the Ministry of Manpower (MOM) that the foreign applicant is essential for certain positions.

It’s important to note that foreign nationals are prohibited from seeking employment in the following sectors:

– Human resources management

– Legal

– Health and safety

– Quality control

– Supply chain management

Business visitors coming to Indonesia can apply for a Business Visa, which is a single-entry visa valid for 60 days upon arrival and extendable up to four times. This visa is designed for business professionals attending meetings, conferences, or conducting market research in Indonesia.