About Foreign Entrepreneur Ownership in Indonesia

About Foreign Entrepreneur Ownership in Indonesia

About Foreign Entrepreneur – Digital era has made a lot of things possible. One of them is to own business overseas. With constant, regularly-updated flood of information, every entrepreneur can find so much about the country of their choice to start their business in. This is also good news for those who wish to have foreign entrepreneur ownership in Indonesia.



So, how do you start first in order to obtain foreign entrepreneur ownership in Indonesia? Do not feel intimidated already with the news and hearsays about the challenging rules and regulations. Once you walk through them one by one, you will know what to do.




The First Two Important Questions:


Make sure you know the answers to these two questions before you proceed:


  1. What is the type of legal entity that you need?

There are two types of legal entities that foreign investors can choose. You can choose PT. PMA (Penanaman Modal Asing) or Foreign Investment Company. You can also choose KPPA (Kantor Perwakilan Perusahaan Asing) or Representative Office for Foreign Companies.


Suggestion: many foreign investors have preferred PT.PMA, since that is where they can be fully in charge of their own company 100% in Indonesia.



  1. Regarding FDI (Foreign Direct Investment), what is the status of the sector for your business?

Although BKPM Regulation No:13/2017 has helped foreign investors to reduce the hassles, that does not mean they can simply claim all sectors in Indonesia. Not all fields are open to foreign-owned companies since the government still want local businesses to run. Some fields are also related to national security.


Based on the government’s Negative Investment List, there are three statuses related to FDI: fully open to FDI, conditionally-open to FDI, and closed to FDI. Once you have learned the list, you know which business sector is yours.





The Rules and Regulations:

Let’s say you prefer PT.PMA to help you with your foreign entrepreneur ownership in Indonesia. Your next step is to learn how to set up your PMA, from the paperwork permits to the amount of funds that you need. To understand everything better, you might need the help of a local partner.


To gain foreign entrepreneur ownership in Indonesia, one of the things you must know is the deed of establishment.




PT PMA’s Deed of Establishment:

The deed of establishment regarding your company in Indonesia should include more besides the Articles of Association. The additional information includes:


  1. Regarding The Founders.
  • There should be a name, birthdate, birthplace, citizenship, and current residence information if it is individual.
  • There should be the legal entity’s domicile (full address and the date and number of the ministry’s legalization).


  1. Regarding Board of Directors (BODs) and Board of Commissioners (BOCs).
  • There should be a name, birthdate, birthplace, citizenship. And current residence information of the BODs and BOCs first appointed through this deed.


  1. Regarding The Shareholders.
  • The shareholders are other than the founders. In this part, there should be their names, number of shares, and also issued and paid-up nominal value.


Following the rules and regulations to set up your PMA in Indonesia will help you to obtain foreign entrepreneur ownership in Indonesia.


Sources: smartcolaw.com

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