Establishing the business entity

Formation and costs

Company

It takes approximately four (4) - six (6) months.

For a foreign investment company, a business registration should be obtained. In addition to the business registration, business entities engaging in certain industries (e.g. Banking businesses, merchant banking, finance companies, credit and charge card operations, money- changing and remittance businesses, air, land and sea transportation and oil and gas exploration and production) will require special licenses from the Regulatory authority.

Branch

It takes approximately three (3) months.

In general, foreign companies may not establish branches in Indonesia, except for those engaged in certain industries such as oil and gas and banking. There are certain foreign banks with licenses to operate through branches in Indonesia.

However, for new investment in banking, a local incorporated company is required. For tax purposes, branches of foreign companies are considered permanent establishments (PEs).

Representative Office

It takes approximately three (3) months to complete the establishment of a representative office.

The time for obtaining licenses depends on the competent authority issuing the license.

Foreign companies may set up representative offices of various types, depending on the issuance of licenses by competent authorities. The licenses granted for representative offices are typically for conducting preparatory or auxiliary types of activities, such as acting as an intermediary, assisting with promotional and marketing activities and gathering information for head offices.

An exception to this is a representative office set up under the Department of Public Works will be allowed to conduct business activities.