Overview

In Indonesia, all business sectors are classified into four risk levels:

• Low Risk

• Medium-Low Risk

• Medium-High Risk

• High Risk

Each level determines the type of business license required.

To set up a Foreign Investment Company (PT PMA) in Indonesia, certain requirements must be met.

Key Benefits

• 100% foreign ownership allowed in many sectors

• Access to Southeast Asia's largest economy

• Legal structure recognized by the government

• Clear regulatory framework for investment

Requirements to Establish a Foreign Investment Company

• Minimum capital: IDR 100 billion (registered and paid-up)

• Shareholders: Minimum 2 (individuals or companies)

• Management: At least 1 director and 1 commissioner

• Business address: Required (virtual office allowed)

Business Risk Levels and Licensing

1. Low Risk

License: Business Identification Number (NIB)
Examples:

• Wholesale trade (textiles, household goods, clothing)

• Telecommunications equipment

• Warehousing

2. Medium-Low Risk

License: NIB + Active Standard Certificate (SS)
Examples:

• IoT consulting and design

• Real estate ownership or rental

• Textile machinery industry

3. Medium-High Risk

License: NIB + Inactive Standard Certificate (SS)
Examples:

• Wholesale trade of cosmetics

• Construction (ports, mining, oil & gas)

• Computer programming services

4. High Risk

License: NIB + Business License (Izin)
Examples:

• Railway transportation

• Trade of alcoholic beverages

• Medical and pharmaceutical equipment

Required Documents

1. Company Name

• Provide 3 name options (to prevent duplication)

2. Shareholder Documents

If individual:

• Indonesian: ID card, tax number, email, phone

• Non-Indonesian: Passport, email, phone

If foreign company:

• Articles of Association (with sworn English/Indonesian translation)

• Business license (with sworn translation)

• Proof of company chairman (if not stated in the Articles)

• Chairman/legal rep’s passport

3. Director & Commissioner

• Indonesian: ID card, tax number, email, phone

• Non-Indonesian: Passport, email, phone

4. Other Documents

• Capital details: registered capital, paid-up capital, share distribution

• Building permit

• Polygon map

• Office lease agreement

• Office contact: phone, fax, email

Processing Time

• Estimated duration: 20 working days