Procedures for setting up a company in Indonesia

Indonesia, a country with majestic natural beauty and diverse culture, is currently a promising “golden land” for global investors and businesses. With its impressive economic growth rate and huge domestic market and outstanding development potential, Indonesia is rising to become one of the most attractive investment destinations in Southeast Asia. The domestic market with more than 270 million people is a huge consumer force, especially the fast-growing middle class, creating favorable conditions for businesses to expand their market share. Indonesia’s strategic location, located in the heart of Southeast Asia, is also an important gateway to access the vast ASEAN market with more than 600 million people. The rise of the digital economy, with the strong growth of tech startups and e-commerce platforms, has also opened up many new business opportunities for investors. Setting up a company in Indonesia is not only a smart business decision, but also a strategic step to make the most of the outstanding growth opportunities that the country offers. To help investors in the process of establishing a company in Indonesia, Viet An Law would like to guide customers through some procedures through the article below.

Procedures for setting up a company

Choosing and registering a company name in Indonesia

Check the availability of the company name

• Before submitting your application, you need to check that the company name you want to register is not already in use by any other business.
• You can use the online company name checker tool or contact the Human Rights Code (MOLHR) directly through the information on the website as follows:

https://www.ministryoflawandhumanrights.org/

Notes when choosing a company name

• Avoid choosing company names that are too similar or confusing to previously registered companies.
• Do not use the names of state agencies, governments, or international organizations without official approval.
• Make sure that the company name properly reflects the purpose, objectives, and business activities of the business.
• Avoid using company names that consist only of numbers, letters, or characters that don’t make up meaningful words.

Applying for a Certificate of Incorporation in Indonesia

List of documents to prepare

• Company Charter: After choosing a company name, the next step is to build a company charter. This document needs to be made with the witness of a notary. The company’s charter should include the following information:
  • Authorized charter capital, issued capital and contributed capital.
  • The name and address of the company’s head office.
  • Objectives and areas of business activities.
  • Details of the amount of capital.
  • Titles, number of members, appointment and dismissal process of the Board of Directors and the Control Board.
  • Method and place of holding shareholder meetings.
  • Profit and dividend distribution process.
  • The company’s operating term.
  • The number of shares, the classification of shares (if any), the number of shares for each type, the benefits associated with each share and the par value of each share.
• Bank account certificate: You need to provide the company’s bank account certificate, confirming the amount of charter capital that has been paid.
• Official copy of bank transfer notice: Document verifying that the charter capital has been transferred to the company’s bank account.
• All documents must be notarized: Before submission, all relevant documents must be notarized.

If the application for the certificate of incorporation is approved, MOLHR will issue a certificate of legalization of the establishment of the company. After receiving the legalization certificate, you have 14 days to announce the incorporation of the company in the Official Gazette of the Republic of Indonesia.

Procedures for applying for a company business location certificate in Indonesia

Application Process

The application for the Certificate of Business Location shall be made at the district-level office where the company is headquartered. The dossier to be prepared includes:

• A copy of the Certificate of Incorporation.
• A copy of the identity card/passport of the legal representative.
• Documents proving the right to use the location (e.g., lease contract, land use right certificate).
• Application for a Certificate of Business Location.
• Processes and requirements may vary depending on local regulations.

Applying for a tax registration number of a company in Indonesia

To be able to apply for other licenses, fulfill tax obligations, and open a business bank account in Indonesia, you need to apply for a Taxpayer Identification Number (NPWP). You can apply for an NPWP online or in person at your local tax office.

Register online

Visit the website of the General Department of Taxation via the following link https://www.pajak.go.id/ to register. The steps are as follows:

• Create an account with an email address. You’ll receive a verification email in your inbox.
• Fill in the profile information and follow the instructions to activate the account.
• Once activated, fill out the online registration form.
• Upload the required documents to the e-registration application or mail them to your local tax authority. If sent by mail, the document must be received within 14 business days of online registration.
• The tax authority will send an electronic receipt and issue a Taxpayer Identification Card and Tax Registration Certificate by post within one working day after issuing the receipt.

Direct registration: Go to the local tax authority to register for NPWP.

List of documents to prepare

• Certificate of incorporation.
• Director’s identity card/passport.
• Certificate of business location or documents proving the location of operation.
• In addition, additional documents may be required depending on the requirements of the local tax authority.

Apply for a business identification number

NIB is issued through the OSS system, an online platform that simplifies and integrates business licensing procedures in Indonesia. The OSS system helps save time and minimize complicated administrative procedures, creating favorable conditions for businesses.

What is NIB?

• The NIB is a unique code issued to each business, similar to an identity card, which helps identify the identity and information of the business.
• This code is used in business transactions, administrative procedures and business-related activities.
• When receiving the NIB, the enterprise is also registered with the Social Security Organizing Agency (BPJS) Ketenagakerjaan (Labor Social Security Management Agency) and BPJS Kesehatan (Health Social Security Management Agency).