How to setup business in Aceh
Establishing a Business in Indonesia
Indonesia presents a compelling opportunity for investors, boasting a vast and growing market, abundant natural resources, and a strategic location in Southeast Asia. The country offers a variety of incentives and facilities to business entities investing in sectors aligned with the government's development goals.
Types of Business Entities
Investors, both local and foreign, can choose from three legal entities to register a company in Indonesia:
A - Local Company: A legal entity wholly owned by Indonesian citizens. It requires smaller capital and has fewer restrictions and requirements. Foreigners wishing to establish a local company can do so through a Special Purpose Vehicle (SPV), which is a company set up by foreigners for specific purposes, such as managing assets, borrowing funds, or investing in local companies.
B - Foreign Direct Investment Company (PT PMA): A legal entity that can be wholly or partially owned by foreign companies or investors. However, foreign ownership is capped based on the business field and activities, as outlined in the Indonesia Investment Positive List, which governs sectors that are open, restricted, or closed to foreign investment.
C - Representative/Branch Office: A legal entity wholly owned by a foreign company or investor. This setup works best for business activities unrelated to sales, such as establishing call centers, design houses, market research, etc. It also serves as a temporary solution while preparing to establish a PT PMA.
Steps to Establish a Business in Indonesia:
1 - Obtain company name approval from the Ministry of Law and Human Rights (Kemenkumham). The company name must be unique, not violate norms, and not contain foreign elements.
2 - Prepare the company's articles of association with a notary. These are legal documents outlining everything related to the company, such as name, purpose, capital, structure, rights and obligations of shareholders, etc.
3 - Obtain a company establishment deed from Kemenkumham. This legal document includes the articles of association and founder's data. It must be approved by Kemenkumham to gain legal status as a corporate entity.
4 - Obtain a Tax Identification Number (NPWP) from the Directorate General of Taxes (DJP). NPWP is an identity number given to taxpayers, both individuals and entities, for tax administration purposes. It is required for tax reporting and payment, and to access tax facilities.
5 - Register for business permits and other licenses through the Online Single Submission (OSS) at www.oss.go.id.
Learn how to Start a Representative Office.
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