To start a business in Indonesia as a foreigner, decide what the business will do, check that its activity code is open to foreign ownership, then choose a structure, usually a foreign-owned PT (PT PMA). Register through the OSS platform, meet capital and licensing rules, and plan staffing and tax from day one.
What should you decide before starting a business in Indonesia?
Decide the activity, the ownership you want, the budget and whether the business will earn revenue in Indonesia. These four answers drive the structure, licences and capital.
- Activity. Every business activity is classified under KBLI, and the code determines licensing and whether foreign ownership is open, conditional or closed. Foreign investment fields are set by Presidential Regulation 10 of 2021, as amended by Presidential Regulation 49 of 2021, which sorts fields into priority, reserved for cooperatives and MSMEs, open with conditions, and open to all investors.
- Ownership. A foreign investor who wants control normally needs a PT PMA; a local partner may be required only in conditional sectors.
- Revenue. If the Indonesian presence will invoice customers, a representative office is not suitable.
- Timeline and budget. Capital, licences and staffing all take time to arrange; plan them together rather than in sequence.
Which business structure suits a foreign founder?
A PT PMA suits most foreign founders who will trade or produce; a representative office suits liaison and market study only.
| Option | Can it earn revenue? | Foreign ownership | Typical use |
|---|---|---|---|
| PT PMA | Yes | Allowed, subject to open fields | Trading, services, manufacturing |
| Representative office (KPPA) | No | Parent company only | Liaison, market research |
| Local PT (Indonesian shareholders) | Yes | Indonesian owners | Domestic ventures, joint ventures |
Compare the options in more depth in our guides to foreign companies in Indonesia and the representative office. A PT is established by at least two persons under Law 40 of 2007, so even a wholly foreign-owned PT PMA has two shareholders.
How much capital do you need to start?
A PT PMA needs at least IDR 2.5 billion of issued and paid-up capital and a total investment above IDR 10 billion, excluding land and buildings, under BKPM rules.
These figures come from Minister of Investment and Downstreaming/BKPM Regulation 5 of 2025 (regulation text). The investment test applies per five-digit KBLI per project location, with exceptions for certain activities such as wholesale trade. Paid-up capital must remain in the company account for at least 12 months, except for specified uses such as assets, buildings and operations. Treat these as floors: your own budget should cover rent, payroll, licences and working capital until revenue arrives.
How do licensing and registration work?
Registration runs through OSS: the company receives an NIB, then obtains a Standard Certificate or Licence if its activity is medium or high risk.
The legal basis is Government Regulation 28 of 2025 on risk-based licensing (JDIH BPK). Low-risk activities need the NIB; higher-risk activities need additional certificates or licences. Business codes follow KBLI 2025; BPS confirms that existing licences stay valid and that adjustment is needed only where the business purpose changes (BPS). For the full sequence, see company registration in Indonesia, and for how the NIB relates to other numbers see the company registration number guide.
What people and tax matters come next?
Plan employment, work authorisation and tax registration before opening. Foreign staff need approved work plans and stay permits, and the company must register for tax and social security.
- Tax. The general corporate income tax rate is 22 per cent, per the Directorate General of Taxes. Confirm VAT registration, withholding obligations and bookkeeping with your tax adviser.
- Foreign staff. Employers of foreign workers generally need an approved foreign manpower plan (RPTKA) from the Ministry of Manpower. See our RPTKA guide and the investor KITAS guide.
- Local staff. Enrol employees in BPJS and set up payroll tax withholding from the first payroll.
What are the common mistakes?
The common mistakes are choosing the wrong KBLI code, under-planning capital, and treating compliance as a one-off task.
A mismatched KBLI can block a licence or limit what you may invoice. Capital below the investment floor can stall OSS approval. After registration, periodic investment reports, annual tax returns and manpower reports continue. The pros and cons of establishing a business in Indonesia and the challenges of doing business in Indonesia discuss these risks in context.
If you want help with entity selection, OSS filings and licensing, see our PT PMA setup service for how JCSS Indonesia supports foreign investors.
Frequently asked questions
Can a foreigner own 100 per cent of a company in Indonesia?
Often yes, through a PT PMA, but it depends on the business field. Presidential Regulation 10 of 2021, as amended, sets which fields are open, open with conditions, reserved or closed. Check the KBLI code first, because some sectors limit foreign ownership or require partnerships.
What is the cheapest way to start a business in Indonesia as a foreigner?
A representative office has lower set-up demands but cannot earn revenue, so it only suits liaison or market research. A PT PMA is the usual route for commercial activity and carries minimum capital and investment rules under BKPM Regulation 5 of 2025.
How long does it take to start a business in Indonesia?
Timing depends on the deed, legal-entity approval, OSS registration and any sector licences, and varies by case. We do not quote fixed durations because they change with the KBLI code, completeness of documents and agency workload.
Do I need a local partner to start a business in Indonesia?
Not as a general rule. A PT needs at least two shareholders under Law 40 of 2007, but both can be foreign. A local partner may be needed only if your field is open with conditions that require one, or if you choose a joint venture.
Do I need a visa to start a business in Indonesia?
Setting up a PT PMA is done through a notary and OSS, but running it requires proper stay and work authorisation for foreign directors and staff. Plan the investor KITAS and RPTKA early, since the wrong permit can interrupt operations.
General information only; confirm current rules with the relevant agency before acting.
General information only, not legal or tax advice for your specific facts. Regulations change; confirm the current position with JCSS Indonesia before acting.