Indonesia company incorporation is becoming the latest trend of setting up business operations here in Indonesia. Indonesia is currently the fourth most populated country in the whole world. It has emerged as a major trans-regional transport area for exporters which can develop regional tourism activities, enhance business and employment opportunities, and become an ideal place for international entrepreneurs to do business and do import and export as it is strategically situated in between the east and west Asia. The east and west portions of Indonesia are experiencing tremendous growth and expansion in their respective economic fields. The east and west portions of Indonesia are witnessing a tremendous increase in development, economic expansion, and employment opportunities.
Indonesia is also an ideal destination for international companies which aim to increase their sales and profit through doing business in Indonesia. This growth can be achieved through establishing a local presence, conducting adequate research and understanding of the prevailing circumstances in Indonesia, and finding a suitable Indonesian subsidiary. The first step for any company wishing to incorporate in Indonesia is to carry out a thorough research of all the requirements required by the government and its procedures for registration of companies and registration of commercial activities. After this the company needs to identify the business needs of its Indonesia company directors and the resources available to conduct its business activities.
Setting up a foreign-owned company in Indonesia can either be done through direct registration with the Ministry of Foreign Affairs under the Companies Act of Indonesia or through Memorandum and Articles of Association under the Companies Act of Indonesia. Direct Registration is preferred by foreign companies that wish to avoid the need for a licensed accountant because their local personnel would not be permitted to complete the paperwork for the establishment of the business. Moreover, direct registration requires the submission of duly completed and signed documents by the controller of the company at the Ministry of Foreign Affairs. This paperwork would include: a certificate of registration of company name, its proposed names, and its objects and powers. The Articles of Association of a foreign company are not mandatory but must be complied with to comply with Indonesian law.
Indonesia company registration does not require you to meet the legal obligations mentioned in the previous sentence. However, it is necessary to open an Indonesian bank account and pay the appropriate amount to the prescribed authorities. This is necessary to mitigate risks of possible legal liabilities as well as protect the legal rights of the company directors. An alternative to opening a bank account is to use a certified bank account, which comes at a higher rate of interest and normally requires a minimum deposit of around USD 200.
A foreign company could also choose to set up a limited liability company or LLC in Indonesia. Under the Limited Liability Company law of Indonesia, a sole proprietorship and its partners are legally regarded as one company for all purposes including taxation. This means that the business can only be conducted in accordance with the provisions of Indonesian law. An LLC in Indonesia has similar limitations as a sole proprietorship, but it provides the convenience of having just one director and in some cases two or more members.
Companies established in Indonesia need to be registered in order to receive the registration certificate. The rate of registration of a company is 10 percent, which is slightly lower than the rate of registration in other countries. However, the minimum capital requirement for the registration of a non-tax resident undertaking in Indonesia is USD 200.