How to register a company in Indonesia

This article is the ultimate guide on how to register a company in Indonesia. Registering a company in Indonesia involves a lot of planning, decision-making and completing of legal requirements.

Stage 1: Pre-registration

Company name
The name of a company in Indonesia must consist of at least three different words, as required by the Ministry of Law and Human Rights. You have to reserve the company name by applying to the Directorate General of Legal Administration Affairs. The company name will be verified by the Legal Entity Information System to make sure that other companies have not already used the name.
The company name can be in English or other languages for foreign companies (PT PMA), while local companies can only use Indonesian.

Other company name requirements include:
Combinations of letters and numbers that do not have a meaning is not allowed
Words that are against morality are not permitted
Shall not be similar to government institutions and existing organisations or companies
Shall not be misleading and must be relevant to the business activities and objectives
Shall consist of at least three Indonesian words

Company officers

Companies in Indonesia require a minimum of two shareholders, one director and one commissioner.For a local-owned company, the stakeholders have to be local, while foreign stakeholders are permitted for foreign-owned companies. If there is no local shareholder, director or commissioner for the local-owned company, engaging a qualified local service provider for resident shareholders, directors and commissioners is acceptable.

Company secretaries are not a requirement, but appointing one is recommended for best corporate governance.

Stage 2: Registration

Articles of association
Once you have a company name, you will then need an article of association which a notary must be present when drafting the articles of association.The articles of association consist of:
Amount of authorised capital, issued capital and paid-up capital
Company’s name and location
Company’s objectives and business activity
Details about the amount of capital
Title, number of members, appointment and discharge procedures of the board of directors and commissioners
Methods and locations to hold shareholder meetings
Procedures for using and distributing the company’s profit and dividends
Period of incorporation of the company
The number of shares, shares classification (if any), number of shares for each classification, rights attached to each share and the nominal value of each share
Once the article of association is drafted, all of the shareholders must sign it. The document will then be submitted to the Ministry of Law and Human Rights for approval. Upon approval, the Ministry will issue a deed of establishment which means that the government has registered your company as a legal entity.

The deed of establishment contains information regarding:
The founders
Board of directors and board of commissioners
Shareholders
Letter of domicile

For a company who resides outside Jakarta area, the company must obtain a letter of domicile from the regional government office where the company is located.

Once you have received the deed of establishment, you will then have to apply for the letter of domicile from the regional government. The letter of domicile (Surat Keterangan Domisili Perusahaan or SKDP) is a letter from the local government that certifies your residential address.

The information to be included in a domicile letter are:
Name
Place and date of birth
Gender
Religion
Job
Nationality
Passport number
Address

The documents to prepare are:
A copy of the deed of establishment
A copy of the director’s identification card
A copy of the passport
A copy of the rental agreement or lease of the business office
A reference letter from the neighbourhood head if your office is in the residential area
A reference letter from the building owner or landlord
A copy of the latest proof of property tax from the landlord
A photograph of the director with a red background
A photo showing the workstation and the company name in front of the entry door
A ratification letter from the Ministry of Law and Human Rights
Obtaining a taxpayer identification number

You will need to register for a taxpayer identification number (NPWP) to secure other licenses, fulfil tax obligations and open a corporate bank account in Indonesia.

You can register online for a tax registration number or by walk-in registration at the local tax office.

Online registration
Online registration can be done through the Directorate General of Taxes website. The steps for e-registration are:
Create an account using your e-mail address, and you will receive a verification e-mail in your inbox. Fill in your account profile and steps to activate your account.
Once you have activated your account, fill in the registration form.
Required documents can be uploaded through the e-registration application or by mail to a local tax office. If you submit your documents via mail, the documents must be received no longer than 14 working days after the online registration.
The tax office will then send an electronic receipt and issue the taxpayer identification card and tax registration certificate one day after the issuance of the receipt which will be sent to you through the mail.
Walk-in registration

You can register for a taxpayer identification number at the local tax service office.

Visit the tax service office and fill in the taxpayer registration form and attach the required documents.
Submit the form to the tax office, and you will be issued a receipt once the documents and application is completed and accepted.
The taxpayer identification card and tax registration certificate will be issued one day after the issuance of the receipt which will be sent via mail.

Stage 3: Post-registration

Applying for a business identification number (NIB)

Business identification numbers (NIB) can be applied through the Online Single Submission (OSS) system.

The NIB is a 13-digit number that serves as the identity of the business and can be used to apply for business licenses, commercial licenses and operational licenses. NIBs can be revoked if the business conducts any activities that violate the terms of the NIBs.

The NIB also acts as the company registration certificate (TDP), Letter of Domicile (SKDP) for business domiciled in Jakarta, import identification number (API), customs access and proof of participation in the social security for health (BPJS Kesehatan) and manpower (BPJS Ketenagakerjaan) programs.

How we can help you

If you are considering forming a business or you need expert help with company registration in Indonesia, MagickFormations™ is ready to assist you with its skilled team of lawyers, consultants and tax experts. We are committed to making the process as stress-free and streamlined as possible for you, and we will take care of all your document preparation and administrative tasks regarding the registration forms, payment of government fees, local address registration, banking support, etc., whilst always keeping your exact objectives and unique vision in mind throughout the process.

Please use our Formation Wizard if you would like to set up your registered company in Indonesia or if you would like to know the costs involved prior to proceeding with our exceptional services. For other queries and special requests for complex or customised company formation services, please contact us at connect@magickgroup.com