Establishment of Business Entities/Legal Entities
Establishment of local PT, PMA PT, Individual PT, Foundation, Firm, CV, Cooperative. The formal process of forming a legally recognized business entity.
To establish a company in Indonesia, foreign investors typically set up a PMA (foreign-owned limited liability company), while Indonesian nationals can choose from Local Investment, a Firm, CV, Foundation, or Sole Proprietorship depending on their goals. A PMA requires at least two shareholders, one director, and one commissioner, with a minimum investment plan of IDR 10 billion per business sector and location. MCS Consulting handles the full process — from your notarial deed through to your final Business Identification Number — typically completed in one and a half weeks.
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What entity types are available in Indonesia?
Indonesia offers several legal structures depending on your ownership situation and business goals — from foreign-owned PMA companies to simple sole proprietorships. The table below compares your options at a glance.
Comparing business entity types
Local Investment-PT (PMDN)
- Foreign ownership
- Not allowed
- Minimum shareholders/founders
- 2
- Minimum capital
- >IDR 1 Million
- Legal liability
- Limited
- Typical timeline
- 1.5 Weeks
- Best for
- Indonesian-owned small-to-medium businesses
Foreign Investment-PT (PMA)
- Foreign ownership
- Up to 100% (sector-dependent)
- Minimum shareholders/founders
- 2
- Minimum capital
- >IDR 10 billion
- Legal liability
- Limited
- Typical timeline
- 1.5 Weeks
- Best for
- Foreign investors, international companies
CV
- Foreign ownership
- Not allowed
- Minimum shareholders/founders
- 2
- Minimum capital
- No fixed minimum
- Legal liability
- Limited for silent partners
- Typical timeline
- 1.5 Weeks
- Best for
- Small local partnerships with mixed liability
Foundation
- Foreign ownership
- Not applicable (non-profit)
- Minimum shareholders/founders
- 1/5 (Structure)
- Minimum capital
- Endowment-based, no fixed minimum
- Legal liability
- N/A (non-profit entity)
- Typical timeline
- 1.5 Weeks
- Best for
- Non-profits, social/religious/charitable purposes
Firm
- Foreign ownership
- Not allowed
- Minimum shareholders/founders
- 2
- Minimum capital
- No fixed minimum
- Legal liability
- Unlimited (personal liability)
- Typical timeline
- 1.5 Weeks
- Best for
- Small partnerships, professional practices
Sole Proprietorship
- Foreign ownership
- Not allowed
- Minimum shareholders/founders
- 1
- Minimum capital
- No fixed minimum
- Legal liability
- Unlimited (personal liability)
- Typical timeline
- 3 Days
- Best for
- Individual entrepreneurs, freelancers, small local operators
| Feature | Local Investment-PT (PMDN) | Foreign Investment-PT (PMA) | CV | Foundation | Firm | Sole Proprietorship |
|---|---|---|---|---|---|---|
| Foreign ownership | Not allowed | Up to 100% (sector-dependent) | Not allowed | Not applicable (non-profit) | Not allowed | Not allowed |
| Minimum shareholders/founders | 2 | 2 | 2 | 1/5 (Structure) | 2 | 1 |
| Minimum capital | >IDR 1 Million | >IDR 10 billion | No fixed minimum | Endowment-based, no fixed minimum | No fixed minimum | No fixed minimum |
| Legal liability | Limited | Limited | Limited for silent partners | N/A (non-profit entity) | Unlimited (personal liability) | Unlimited (personal liability) |
| Typical timeline | 1.5 Weeks | 1.5 Weeks | 1.5 Weeks | 1.5 Weeks | 1.5 Weeks | 3 Days |
| Best for | Indonesian-owned small-to-medium businesses | Foreign investors, international companies | Small local partnerships with mixed liability | Non-profits, social/religious/charitable purposes | Small partnerships, professional practices | Individual entrepreneurs, freelancers, small local operators |
What's included with each entity type
Every registration with MCS Consulting is handled end-to-end. Here's exactly what you receive for each entity type.
Local Investment-PT (PMDN)
- Deed of Establishment
- Ministry of Law and Human Rights Decree
- Tax Identification Number (NPWP)
- Company Details registration
- OSS Account
- Certificate of Registration (SKT) issued by the tax office
- Business Identification Number (NIB)
Foreign Investment-PT (PMA)
- Deed of Establishment
- Ministry of Law and Human Rights Decree
- Tax Identification Number (NPWP)
- Company Details registration
- OSS Account
- Certificate of Registration (SKT) issued by the tax office
- Business Identification Number (NIB)
CV
- Deed of Establishment
- Ministry of Law and Human Rights Decree
- Tax Identification Number (NPWP)
- Company Details registration
- OSS Account
- Certificate of Registration (SKT) issued by the tax office
- Business Identification Number (NIB)
Foundation
- Deed of Establishment
- Ministry of Law and Human Rights Decree
- Tax Identification Number (NPWP)
- Company Details registration
- OSS Account
- Certificate of Registration (SKT) issued by the tax office
- Business Identification Number (NIB)
Firm
- Deed of Establishment
- Ministry of Law and Human Rights Decree
- Tax Identification Number (NPWP)
- Company Details registration
- OSS Account
- Certificate of Registration (SKT) issued by the tax office
- Business Identification Number (NIB)
Sole Proprietorship
- Tax Identification Number (NPWP)
- Company Details registration
- OSS Account
- Certificate of Registration (SKT) issued by the tax office
- Business Identification Number (NIB)
*Note: Sole Proprietorship registration doesn't require a Deed of Establishment or Ministry of Law Decree, since it isn't a separate legal entity from its owner — making it the fastest and simplest option to register.*
Requirements to establish a PMA
To register a PMA in Indonesia, you'll need to meet the following requirements:
Shareholders
At least two shareholders, who can be individuals, corporate entities, or a mix of both. Shareholders don't need to be Indonesian residents and can hold shares from anywhere in the world.
Management structure
At least one director and one commissioner. The director manages day-to-day operations and can be foreign, though a foreign director actively working in Indonesia will need an Investor KITAS (stay permit). The commissioner supervises the director but doesn't manage daily operations.
Capital requirements
A minimum total investment plan of IDR 10 billion per business sector and location (excluding land and buildings), with a portion committed as paid-up capital at incorporation. The paid-up capital doesn't need to be deposited immediately — a signed Capital Statement Letter is accepted at registration, with the actual deposit made once your corporate bank account is open.
Registered business address
Every PMA needs a registered business address in Indonesia, documented at the time of registration. Some business activities require a physical location and cannot use a virtual office — this depends on your KBLI (business classification) code, which MCS Consulting verifies for you before you commit to an address.
Business classification (KBLI)
You'll need to select the correct KBLI code for your business activity. This determines which sectors are open to foreign ownership, what percentage of foreign ownership is allowed, and which additional licenses your business will need. Choosing the wrong KBLI code is one of the most common causes of delays and licensing issues later on — MCS Consulting confirms the right classification before you begin.
Sector restrictions
Some sectors are fully open to 100% foreign ownership, others allow partial foreign ownership, and a small number are closed to foreign investment entirely (such as sectors related to national defense and security). MCS Consulting checks your intended sector against current investment regulations before you start the process.
Company establishment in Indonesia is governed by Law No. 40 of 2007 on Limited Liability Companies and administered through the Online Single Submission (OSS) system. MCS Consulting stays current with all Ministry of Investment/BKPM regulation updates on your behalf for Indonesian citizens.
Step-by-step registration process
Company name reservation
Your company name must be at least three words, not duplicate an existing registered name, and be submitted for approval through the Ministry of Law and Human Rights' online system (AHU). *(Not required for Sole Proprietorship.)*
Deed of establishment
A licensed Indonesian notary drafts your Deed of Establishment, covering your company's structure, shareholders, business activities (KBLI codes), and management. This can typically be signed remotely via Power of Attorney. *(Not required for Sole Proprietorship.)*
Ministry of Law approval
The notarized deed is submitted to the Ministry of Law and Human Rights for review. Once approved, you receive an official decree confirming your company's legal status. *(Not required for Sole Proprietorship.)*
Tax registration — NPWP and SKT
Your business is registered with the Directorate General of Taxes to obtain your Tax Identification Number (NPWP) and Certificate of Registration (SKT).
OSS account and Business Identification Number — NIB
We set up your OSS account and complete your NIB application, which functions as your primary business license, import license, and customs registration number.
How long does it take?
Total typical timeline
One and a half weeks
For Local Investment, PMA, CV, Foundation, and Firm; 1–2 weeks for Sole Proprietorship, given fewer required steps.
Not sure which entity type fits your business? Schedule a free consultation and our team will map out exactly what applies to you.
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