Establish Your Local Company (PT) in Bali: Your Business Foundation
Are you an Indonesian citizen (WNI) or collaborating with local partners to launch a business entirely under the Indonesian flag? Establishing a Local Company PT (Limited Liability Company) is the definitive structure for you.
PT is the abbreviation of Perseroan Terbatas, a limited liability company whose capital is divided into shares and the responsibility of shareholders based on the position and number of shares that each shareholder has. Local Company (PT) or local limited liability company (PT) must be owned by 100% Indonesian shareholders.
After understanding what is Local Company (PT) and the requirements to set up, you have to know also that establishing a Local Company (PT) in Indonesia needs some amount of money as your business capital.
Based on this amount of capital, Local Company (PT) in Indonesia is categorized into four sizes:
- Micro Business - less than IDR 50 million.
- Small Business - IDR 50 million - 500 million
- Medium Business - IDR 500 million - 10 billion
- Large Business - more than 10 billion
Requirements to set up Local Company (PT)
- Company name (three words in Bahasa Indonesia)
- Copy identity card (KTP) and tax register number (NPWP)
- Phone number and email address (Gmail) for each shareholders
- A numbers of investment (If you want to hire a foreign employee in a local company (PT), your company size should medium size and we suggest with an authorized capital of above IDR 1 billion
- Position of each shareholders in company.
- Total share capital for each shareholders.
- Business classification or business activities details.
- Rent agreement or land certificate for the office address. (If you don't have office address yet, you can use Virtual Office address for the first year).
Steps to register Local Company (PT)
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Approval of Company Name.
It should consist of three words that are not vulgar or obscene. -
Deed of Incorporation.
It should include an Article of Association, and a notary must be present. -
Approval of Legal Entity.
After submission of Deed of Incorporation by the notary, the Ministry of Law and Human Rights will give approval. -
Registration of Tax ID (NPWP).
A valid NPWP is required for securing other company’s licenses, banking activities, and fulfilling tax obligations. -
Application of NIB.
NIB (Business License) will registration via Online Single Submision (OSS).
Obligation for Local Company (PT)
Local Company (PT) is also has same obligated with Foreign Owned Limited Liability Company (PT PMA) to do :
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Tax Report
For the first 3 years, your company tax rate is 0.5% from the total revenue and your revenue is less than IDR 4.8 Billion per year. If your revenue exceeds IDR 4.8 Billion or after 3 years, your company tax rate will be 22% of the net profit (50% discount if your company are UMKM with total profit less than 50 billion). -
Report Investment Activities (LKPM)
LKPM is a report comprising information about the results in the company’s investments and concerns raised by the investors that reported periodically to the government. The LKPM report is submitted quarterly, every 3 months, detailing all investments made during that period.
FREQUENTLY ASKED QUESTIONS (FAQ)
A Local PT is an official Limited Liability Company in Indonesia where 100% of the company shares are owned by Indonesian Citizens (WNI).
Any Indonesian individual or group looking to run a business formally and legally within Indonesia without any foreign investment.
Local PT: 100% owned by Indonesian citizens and PT PMA (Foreign Investment Company): Has one or more foreign shareholders (individuals or entities) and is subject to a much higher minimum investment requirement (typically IDR 10 Billion).
Based on recent laws, there is no specific minimum required basic capital. Founders can determine the capital amount, but generally, 25% of the declared basic capital must be deposited as paid-up capital.
Yes. Local PTs have broader access to various business sectors in Indonesia compared to PT PMAs. However, the business field must still comply with the KBLI (Standard Indonesian Business Classification) codes and local regulations.
