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Doing business in Indonesia from abroad almost always means owning an Indonesian limited liability company, the perseroan terbatas or PT. Foreign owners use it to sell to Indonesian customers, to manufacture for the domestic market or for export, to run hospitality and property businesses, and to employ staff in the country. The Investment Law (Law No. 25 of 2007) leaves little choice of vehicle: foreign investment must take the form of a PT under Indonesian law, domiciled in Indonesia, unless another law provides otherwise.
A PT with any foreign shareholder is known as a PT PMA, from penanaman modal asing, foreign investment. A foreign group, for instance one run from Singapore, therefore holds its Indonesian business through a PT in which its own company is a shareholder; outside narrow exceptions such as upstream oil and gas and air transport, the Singapore entity cannot itself be the vehicle for the investment. Our Singapore company guide covers that side.
| Form | Who may use it | Typical use |
|---|---|---|
| PT PMA | Any company with at least one foreign shareholder | The vehicle for foreign-owned trading, services, industry and hospitality |
| PT with domestic capital (PMDN) | Indonesian individuals and companies | Local businesses of every size |
| Perseroan perorangan | One Indonesian citizen aged 17 or over | Micro and small businesses, set up by a statement of establishment instead of a notarial deed |
| Perseroan Terbuka | Companies offering shares to the public | Listed companies, named with “Tbk” at the end and run by at least two directors and two commissioners |
| Representative office | Foreign companies | Marketing and research; generally no revenue, construction excepted |
| CV and firma | Domestic partners | Partnerships; not available for foreign investment, which must use a PT |
Every PT is founded by at least two persons and run by a board of directors under the supervision of a board of commissioners. The capital, documents and registration steps for a foreign-owned company are on PT PMA company formation in Indonesia.
| Tax | Position in 2026 |
|---|---|
| Corporate income tax | 22% on net taxable income; 19% for listed companies with at least 40% of shares traded and other conditions met |
| Smaller companies | Gross income up to IDR 50 billion: half the rate on the taxable income attributable to the first IDR 4.8 billion |
| 0.5% turnover tax | Since 22 April 2026 only for individuals, one-person companies and cooperatives with turnover up to IDR 4.8 billion |
| VAT | 12% standard rate, charged on an 11/12 base for non-luxury goods and services, so 11% in effect; full 12% on certain luxury goods; exports of goods zero-rated |
| Dividends | Exempt between resident companies; 20% withholding when paid to non-residents, unless a treaty lowers it |
| Interest, royalties, services abroad | 20% withholding for non-residents, subject to treaties |
| Large multinational groups | 15% minimum through the income inclusion rule and a domestic top-up tax from 2025, and the undertaxed profits rule from 2026, for groups with revenue of at least 750 million euros |
| Special regimes | Tax holiday or tax allowance for businesses in special economic zones; incentives in the new capital, Nusantara |
Losses can be carried forward for five years and never back, and Indonesia has more than 70 tax treaties.
Under Article 12 of the Investment Law every business field is open unless declared closed or open with conditions. The conditions are listed in Presidential Regulation No. 10 of 2021 on investment business fields, as amended by No. 49 of 2021: some fields are reserved for domestic investors, some cap foreign ownership, some need a special licence, and some are allocated to cooperatives and small businesses. Fields the list does not mention are fully open to foreign capital. Because the BKPM rules treat every foreign-owned company as a large business, a PT PMA also faces a minimum capital and investment value, set out on the formation page.
Management is open to foreigners. The Company Law sets a capacity test for directors and commissioners, not a nationality or residence rule, and no local secretary or agent is required. What the Investment Law does ask is that investment companies give priority to Indonesian workers and train them, while allowing foreign experts in particular positions.
Ownership is transparent. The company register kept by the Ministry of Law, with the names of shareholders, directors and commissioners, is open to the public, and Presidential Regulation No. 13 of 2018 obliges each company to name its beneficial owners, among them anyone holding more than 25% of the shares, and to update them every year. Holding shares for someone else is not a workaround: Article 33 of the Investment Law makes any nominee agreement over shares in a PT void by law.
The bank account comes early in a PT PMA’s life: its paid-up capital must sit in the company’s account for at least 12 months unless spent on assets, buildings or operations. Transactions carried out in Indonesia must be denominated in rupiah, with exemptions, and transfers abroad of 100,000 US dollars or more are reported to Bank Indonesia through the bank. Each bank decides on its own review of the owners, directors and business. Opening an account locally is covered on bank accounts for Indonesian companies; an account abroad, for example in Singapore, follows the rules of banks there, which Singapore company bank accounts describes.
Form a new company when you want to choose the name, the KBLI codes and the shareholders yourself. The PT is created by a notarial deed and registration with the Ministry of Law, and then receives its business identification number in OSS. The procedure is on PT PMA company formation in Indonesia.
Buy a ready-made company when an earlier registration date, licences already issued for the right codes or a filed tax history are worth more to you than choosing those details. A local PT bought by a foreigner converts to PMA status and must meet the same capital rules, so it is not a way around them. The transfer is explained on ready-made shelf companies in Indonesia, and the idea in general in our guide to off-the-shelf companies.
We form new Indonesian companies and supply ready-made ones, draw up the papers for a formation or a share transfer, prepare the filings with the Ministry of Law and in OSS, and help put together the bank application. Where we have a working contact at a suitable bank we can introduce you; the bank takes its own decision.
The standard rate is 22% of net taxable income. Listed companies with at least 40% of their shares traded on the Indonesia Stock Exchange can pay 19%, and companies with gross income up to IDR 50 billion pay half the rate on the part of profit linked to their first IDR 4.8 billion of income. Groups with revenue of 750 million euros or more face a 15% minimum.
The statutory rate is 12%, but for most goods and services it is applied to a base of eleven twelfths of the selling value, so the tax actually charged is 11%. The full 12% falls on certain luxury goods, and exports of goods are zero-rated. Businesses register for VAT once their taxable deliveries exceed IDR 4.8 billion a year.
PT stands for perseroan terbatas, the limited liability company of the Company Law (Law No. 40 of 2007). Article 16 requires every company name to begin with “Perseroan Terbatas” or “PT”, and a public company adds “Tbk” at the end. A PT with foreign shareholders is called a PT PMA, from penanaman modal asing, meaning foreign investment; one owned only by Indonesian investors is a PMDN company. A one-person perseroan perorangan is a separate form open only to Indonesian citizens.
Yes. Article 29 of the Company Law makes the register kept by the Minister of Law open to the public. It records the company’s name, seat, objects, capital, address, deed numbers and the names and addresses of shareholders, directors and commissioners. Beneficial ownership is reported separately under Presidential Regulation No. 13 of 2018 and updated every year.
Only for limited purposes. A foreign company’s representative office may promote its products and carry out research, but generally may not earn revenue in Indonesia, construction being the main exception. A foreign business that wants to earn revenue in Indonesia needs a PT PMA instead.
Weighing Indonesia against other places for your business? Tell us the activity and where your customers are, and we will say whether a PT PMA fits and whether a ready-made company is available now. Telegram and WhatsApp reach us at +48 663 247 166.