Indonesia

Benefits of Foreign Company in Indonesia

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Indonesia offers excellent opportunities to those who want to start their business in Indonesia, whether for the locals and also for the foreigners. To start a foreign company in Indonesia needs to be assigned in the form of Foreign Limited Liability Company or PT PMA in the Indonesian language. This kind of foreign company in Indonesia is regulated by the Company Law No. 40 Years 2007 about the Company Law. If the foreigners want to start their business in Indonesia, they will need an expert to help them navigate the regulations on registering their company in Indonesia. A company is in the form of PMA if the shares of the company are held partially or entirely by a foreign company or foreign national. The amount of the shares whether it is 1%, 51%, or 100%, as long as there are foreign shareholders, the company is a foreign company in Indonesia. Besides establishing a Company, foreign investors can also set up a representative office in which the international company represents an overseas company in Indonesia, but it doesn’t generate any income from its activities in Indonesia. Advantages and Disadvantage of Foreign company in Indonesia Advantages of PT PMA The foreign company in Indonesia will receive many benefits if it is in the form of PT PMA. PT PMA is allowed to become a 100% foreign-owned limited liability company or else it can also be established as a limited liability company in the form of joint venture with Indonesia partners. This type of foreign company in Indonesia can give the international investors a full control of their business, and it will also reduce the risk of finding a right local partner. This form of foreign company in Indonesia has the same rights and responsibilities as a local company. On-site tax and import duties are lower for PT PMA, and the company can sponsor many foreigner employees. Disadvantage of PT PMA There is also some disadvantage of the foreign company in the form of PT PMA. PT PMA is not allowed to establish some types of business activities that are closed for foreign ownership. Another disadvantage of this kind of foreign company in Indonesia is this company obliged to make monthly tax reports. The company is also required to report their business activities to the BKBM every three months. It is purposed so that BKPM can monitor the development of the company. The minimum investment plan for the foreign company in Indonesia is about US$ 1.000.000,- in which is a considerable amount. Advantage of Representative Office Representative office or KPPA is the foreign company in Indonesia in which is established by the international company abroad to take care of their business activities in Indonesia but not collecting any income from their operations in Indonesia. The benefits of establishing a representative office in Indonesia is it is not required any capital to develop this form of foreign company in Indonesia. It means that foreign investors can build a market presence legally in Indonesia in a cheap way. KPPA or representative company is also having the possibility of handling their sales and deliveries of their products or service. Disadvantage of Representative office There are some limitations for the representative office activities in Indonesia. The operation of representative in Indonesia is limited in the role of supervising, connecting, coordinating and caretaking of the Company interests or its affiliate company inside or outside of Indonesia. This type of foreign company in Indonesia is not allowed to fund any income from pursuing sales transaction and from the purchase of its products and services. The foreign company in Indonesia in which in the form of the representative office is also obliged to be located in the capital city of the province and must have an office building. Hopefully, the information above which is about some forms of the foreign company in Indonesia might help you to learn about the foreign-owned business entity that established in Indonesia.

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Certificate of Incorporation of Company in Indonesia

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There are many forms of cooperation in the business world. Including in Indonesia, where a certificate of incorporation of company is needed to overcome some problems between groups. The collaboration of businesses can be done between at least two companies, and both of them have similar business characteristics. To achieve this agreement, you need to know the requirements. Certificate of incorporation of company and Its Business Types Acquisition In Certificate of incorporation of company, an addition is defined as one of the companies have control to its net assets as an acquirer, and the acquired company’s operations described to issue shares, grant certain assets, and recognize liability. Interest Uniting In a certificate of incorporation of company, this is a condition where business combination occur when shareholders of the companies that being merged are working together or jointly toward specific goals and have control over the whole. The control includes net assets, operations and endure all risks and benefits. It is clear that there is no acquirer in this type. Obtain Certificate of incorporation of company in Indonesia The definition of certificate of incorporation of company, it’s a necessary permission for a company to merger so it can carry out products commercialized by the merger companies. There are requirements must be obeyed to fulfill this, such as; Letter of application certificate of incorporation of company. This letter must be signed by the directors or head of company for stamp duty. Later on, it will be addressed to Governor. Copy of Investment Registration for a certificate of incorporation of company. Alongside with business license, investment expansion approval letter, expansion business license, and permit principle of investment expansion. Some administrative requirements for a certificate of incorporation of company, namely, photocopy of Identity card, photocopy of the company’s articles of association that given by Minister of Law also Minister of Human Rights. (it is specified for the applicants who are Indonesia business entities), and Company Establishment deed and amendment photocopy. Other requirements of the certificate of incorporation of company in Indonesia that regulated based on each countries policies or local regulations. Certificate of incorporation of company and Its Business Incorporation Form Horizontal Merger of Business Incorporation It can be defined as the merger of similar companies that turn into one, more larger company. The purpose of a certificate of incorporation of company from this merger is to make it more efficient for companies, and it’s also to avoid the competitors among some similar groups. Vertical Merger of Business Incorporation It can be defined as the merger of some previous companies. These enterprises have a mutually beneficial relationship with each other. To make it easier to understand, for example, a company join merger to maintain the certainty of raw sources or raw materials, so the production is continuing. Conglomerate Incorporation This incorporation means that the combination of horizontal merger and vertical merger. This combination happened when companies have a different type of businesses, for example, a transportation business to join the electronic business to make the cost of delivery more efficient. Business Combination regarding Law For a certificate of incorporation of company, some terms may be useful to additional knowledge, such as merger, consolidation, an affiliate. The difference between alliance and subsidiary is that for consolidation it builds the new company but for branch only buying more or all shares. Those are the brief explanation bout certificate of incorporation of company in Indonesia that maybe we can summarize for you. There are still many things about this we need to dig for better references. Hopefully, this article will be used and shared continuously around your surrounding.

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Procedure to Establish A Company in Indonesia

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The Indonesian government has made many improvements to ease the process of establishing a company. Establish company in Indonesia has become a lot easier and straightforward. This enhancement gives a positive impact on the economic growth rate and also provides a new job for the people. In 2017, there is no minimum capital to establish a company in Indonesia. It just takes about 24,9 days to obtain Deed of Incorporation, Tax ID Number, Business License, Certificate of Company Registration, and also Mandatory Report on Employment (WLP). In 2016, the process of setting up a company in Indonesia needs about 47,8 days. This increase is because of the new rules and policies issued by the central government. Some of the regulations are directly related to the company’s establishment process, and some others are to simplify the existing licensing process. To establish a company in Indonesia, here are the newest regulations related to the process and requirements of Company establishment. New Regulations to Establish Company in Indonesia Code of Business and Field of Business The Government has made some adjustment in the code of Standard Classification of Indonesian Business Field (KBLI) which is arranged through Regulation of the Head of Statistics Central Bureau to anticipate the growth of information technology. A few of KBLI code in Perka 19/17 which previously not available in Perka 95/2015 is about web portals and digital platforms with commercial purposes (code 63120) and web portals and digital platforms without commercial purposes (6312). It is essential for you to define the right business field and determine the most appropriate code in KBLI if you want to establish a company in Indonesia. The code that you choose will specify the required permissions for your business. Business Domicile and Zonation It is essential for you to know the terms of Business Domicile in the region where you want to establish a company in Indonesia. Sometimes, there are few differences about Business Domicile Terms in each area. Few areas in Indonesia allow house to be used as a business place, but there are few others which aren’t. To establish a company in Indonesia, the Business Domicile must be in your business zonation. To ensure about the zonation from the place that will be your Business Domicile, you can go to the village office about the information. Occupancy Worthiness Permit (UUG/HO) The Occupancy of Worthiness Permit or Hinder Ordonantie (HO) is one of the legacies of the Dutch colonial government that was enacted since 1926. This license is required to establish several types of business especially those that related to particular permits such as establishing a travel agency, restaurant, or catering company. However, the regulations governing the Occupancy Worthiness Permit (HO) have been revoked by Minister of Home Affairs. Due to the enactment of the new rule, this Occupancy of Worthiness is no longer required to obtain a business license when you establish a company in Indonesia. Employment Social Security (BPJS Ketenagakerjaan) and Health Social Security (BPJS Kesehatan) Social Security Administrator (BPJS) is the government program with the purpose to give social protections and prosperity for the laborers and workers. The rules concerning BPJS are mandated by Law no. 24 Years 2011 about Social Security Administrator. To establish a company in Indonesia, you must follow article 15 through Article 17 of the law. You as the employer have to register yourself and your workers gradually to the BPJS following the social security program if you want to establish a company in Indonesia. The employer (business entity or individual) will become the subject of administrative sanctions if they don’t register. Many rules have to be followed to establish a company in Indonesia. Hopefully, this article can be useful for you who wants to establish a company in Indonesia by giving you relevant information.

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Angel investor Indonesia and Its Role in The Economy

Angel investor Indonesia and Its Role in The Economy

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Before we started, there are still many people who haven’t know yet about angel investor. Even though there is no official explanation, but some sources define angel investor Indonesia are individual investors that come from successful people in the business that willing to invest their funds in potentially profitable businesses even small business. The role of angel investors is so important. In this modern era, there are lots of startups, especially in Indonesia. Angel investor Indonesia help them to be potentially functioned with capital. Once the startup has started to produce achievement, there will come venture capitalist. What is a venture capitalist? Venture Capitalist is a professional investor who specializes in funding and building innovative new companies. Angel investor Indonesia and Its Role Angel investors became one of the earliest persons who dare to take a risk against startup companies, product or service concept when the other investors didn’t dare. Sometimes, without any likely return, angel investors Indonesia stand front along with the founders with the same belief and high risk to develop the idea into services or products. 1. Funding Potentially Successful Startup If we look closer to the development entrepreneurship in Indonesia, angel investor Indonesia play a big role in the startups. Mostly, the main problem in building startup is lack of capital. With angel investor Indonesia, this problem is solved. It needs a lot of investment to make startups improving dan developing to become one big successful enterprise. 2. Improve Economic Growth One of the main reasons why angel investor Indonesia is willing to invest is because of they also interested in spurring successful business and make economic growth in their communities improved. It shows that angel investor is not only paying attention to the return on investment, but also enjoy the entrepreneurial process. 3. Mentoring and Exclusive Advice Besides monetary support, angel investor Indonesia offers professional advice. Not all angel investors come from the economic or entrepreneur background. Some of them are lawyers or even doctors. They are successful people who are prominent in their fields. With this condition, they can teach and add some values to your company by upper level mentoring and independent advice. Type of Angel investor Indonesia 1. Affiliated Angel investor Indonesia Affiliated means that angel investor is someone who’s in contact with you or has a connection with you regarding the business, but not necessarily related to you. The example of affiliated ones are professionals and business associates. Professionals angel investor Indonesia. There are many kinds of these, such as dentist, lawyer, doctors, accountants, technicians, and so on. To be an angel one, those people must have reached something great according to their profession. These professionals usually have side incomes that available to invest outside their work fields. Business Associates angel investor Indonesia. The difference with professionals are, these people contact almost every day with your business activities. The examples are suppliers or vendors, customers, employees, and even competitors. 2. Nonaffiliated angel investor Indonesia It’s a party which has no connection with your business or yourself. Usually, this type is harder to reach because he or she hasn’t familiar with your business or you. It has two types; the first one is Professional. Same with affiliated ones, this group consist of people who are prominent in their fields but don’t know you personally. The second one is a middle manager. Angel investor Indonesia in the field of middle manager position will start investing because they are bored with their jobs or looking for some new interests. It also can be they are almost retiring or just prepare for the future, so they invest in your company. Those are the explanation of angel investor Indonesia that we can summarize. Hope this information is helpful for your business, startups or just simply knowledge for your reference. Don’t forget to share this article with your surroundings!

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About Foreign Investment In Indonesia and Its Benefit

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Foreign investment is a form of investment that comes in various sectors. We will tell about foreign investment in Indonesia with its sectors such as the tourism, transportation, mining, economic development, and the others that still by government regulations and approvals that applied in Indonesia. The reasons why foreign investment is implemented in Indonesia because there are some benefits for it. About foreign investment in Indonesia is undertaken by the government to invest capital in the process of regional development. The Foreign party looks for mutual benefit that can expand their business, and Indonesia gets the benefit of developing each region in Indonesia. The Benefit About foreign investment in Indonesia 1. Reduce the rate of unemployment As foreign investors expand their business in Indonesia, it will need a lot of employees especially if the company is a big one. With the high rate of unemployment in Indonesia, it’s very beneficial for us as we know that one of the economic problems hard to resolve in Indonesia is unemployment. It can overcome our economic problem. 2. Increase economic activity in Indonesia It’s one of the benefits about foreign investment in Indonesia . We have nearly 100 projects implemented in Indonesia from various sectors, and the result of some sectors in foreign investment has reached Rp. 80 trillion. So that foreign investment can provide little assistance to the Indonesian economy amid the uncertain global economic conditions. Most of the countries in the region of Southeast Asia much ogled by foreign investors such as Thailand, Vietnam, Malaysia and including Indonesia. In fact, according to Asia business outlook survey 2015 that about foreign investment in Indonesia is ranked second in the main investment destination countries after China is ranked first. 3. Political Protection from International conflict The thing about foreign investment in Indonesia , foreign companies operating in Indonesia are also expected to provide political protection in the event of an international conflict. In other words, foreign investors will try to protect Indonesia as a place of business operations of the company. It’s a good opportunity for Indonesia because we will achieve two benefits directly and indirectly, from an economic perspective and also political perspective. 4. Technology Enhancement One of the main reasons about foreign investment in Indonesia is built because we still lack technical knowledge and implementation. With foreign companies’ practice of currents technology in the process of production, they are also teaching us and introduce the development of technology. It is very useful because we can learn it and implement it to Indonesia’s companies as well. Awareness About foreign investment in Indonesia As a good Indonesia citizen, there are efforts we can do to make our country’s economic condition improved. Supporting national development by guarding the course of investment in Indonesia is counted. There is nothing wrong to learn technology and systems development used by foreign companies that are operating in Indonesia. It is a part of understanding about foreign investment in Indonesia . As we learn about technologies, there is a possibility that foreign investors won’t import machinery or materials from aboard. In that kind of condition, the potential of domestic can be maximized optimally. We don’t only learn about foreign investment in Indonesia , but also implemented it in Indonesia. In this era of globalization, about foreign investment in Indonesia is no longer needs to be seen as a threat. On the contrary, foreign investment can be considered as the driving force for national development. With the support and positive involvement of the government, society, and domestic industry players, foreign investment can be managed to be something that is beneficial to the state. Those are the explanation about foreign investment in Indonesia that we can learn. Although it gives many benefits and lessons for us, we also need to be careful of foreign investors. Do not let our land monopolized by foreign companies and keep monitoring enterprises to remain environmentally friendly and not harm natural resources.

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