Understanding the minimum capital requirements is essential for foreign investors planning to set up a business in Indonesia.
These requirements ensure that your business complies with local regulations and is financially capable of operating effectively.
This guide outlines the minimum capital requirements for establishing different types of business entities in Indonesia.
Minimum Capital Requirements for Setting Up a Business in Indonesia
- PT PMA (Foreign-Owned Limited Liability Company):
- Minimum Capital: The general minimum capital requirement for a PT PMA is USD 1 million.
- Paid-Up Capital: At least 25% of the minimum capital (USD 250,000) must be paid up at the time of incorporation.
Notes: Specific industries may have higher minimum capital requirements based on regulatory provisions.
- Local PT (Locally-Owned Limited Liability Company):
- Small Enterprise: IDR 50 million to IDR 500 million.
- Medium Enterprise: IDR 500 million to IDR 10 billion.
- Large Enterprise: More than IDR 10 billion.
Notes: Foreign investors typically cannot establish a local PT without partnering with an Indonesian entity due to foreign ownership restrictions.
- Representative Office (KPPA):
- Minimum Capital: No minimum capital requirement.
Notes: Since representative offices are not permitted to conduct direct business activities or generate revenue, they do not require capital investment.
- Branch Office:
- Minimum Capital: Varies depending on the industry and specific regulations.
Notes: Applicable mainly to foreign banks, construction companies, and specific sectors where branch offices are allowed.
Consult with Abhitech as Your EOR Provider
Navigating the minimum capital requirements and ensuring compliance can be challenging.
Abhitech, as an experienced Employer of Record (EOR) service provider, can assist you by:
- Expert Guidance: Offering detailed advice on capital requirements specific to your industry and business structure.
- Compliance Assistance: Ensuring all capital and regulatory requirements are met during the business setup process.
- Ongoing Support: Providing continuous compliance support to help your business adapt to any regulatory changes.
With over 30 years of experience, Abhitech provides comprehensive support to help you establish and grow your business in Indonesia confidently and compliantly.
Sources
Indonesia Investment Coordinating Board (BKPM): Provides detailed information on foreign investment regulations, including capital requirements.
BKPM
Ministry of Law and Human Rights: Guidelines on business entity establishment and capital requirements.
Ministry of Law and Human Rights
Online Single Submission (OSS) System: Central platform for obtaining business licenses and ensuring regulatory compliance.
OSS System
For personalized guidance and assistance, contact Abhitech to ensure your business setup in Indonesia is handled efficiently and in full compliance with local laws.
