What Business Type Will Fit You Best in Indonesia


Indonesia as the largest economy in Southeast Asia. It results in the country being attractive for new investments. As such, it is expected that more entrepreneurs will venture to Indonesia for opportunities. Company formation in Indonesia will increase and new business owners will take chances in the country’s business ecosystem.

Are you an entrepreneur who wants to start a business in Indonesia? If you are, you are probably worried about choosing the right business type for you. This article discusses the top business entities in Indonesia. Additionally, we outline here which type of business is best for who.

Local Company

A local company, which is locally termed in Indonesia as PT PMDN, is the most common form of business in the country. This is practically similar to a limited liability company (LLC) in terms of structure and function. This is the best company to set up when you are a resident or a citizen of Indonesia.

Shareholders, commissioners, and investments of a local company in Indonesia need to be entirely domestic. Moreover, a foreign director is allowed if he has an Indonesian tax ID number. To set up a local company requires minimum investment size and paid-up capital, which is cheaper in contrast to other business types.

Foreign Company

A foreign company is termed PT PMA in Bahasa. This is the standard way for foreign investors to operate a company in Indonesia. This business type has roughly the same rights and responsibilities as a local company. Thus the foreign business owner has nothing to fear of, regarding being at a disadvantage.

Representative Office

A representative office, or KPPA in Indonesian terms, is another way for foreigners to establish a business presence in Indonesia. Its difference with the foreign company is that a representative office is not allowed to generate revenues. A representative office is established to conduct marketing and other non-transactional activities in the country.

Register a Business in Indonesia

Do you now know which business structure is best for you? If still in doubt, it is best to consult with professionals who know the system and the types of businesses best. You can evaluate your options with a consultant to choose the one that is best suitable for your purpose and goals in Indonesia.

Consult and register a business in Indonesia today with the help of expert professionals in 3E Accounting Indonesia. We specialize in the registration of company in Indonesia and have helped successfully register many companies in Indonesia. Contact us today and be one of those success stories.


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