How to Set Up a Company in Indonesia? 3 Important Things to Know!

As a growing country with the biggest population in Southeast Asia, Indonesia possesses a great deal of opportunity in developing new business. Running a business in Indonesia can be profitable. You can set up the business from zero, develop it, and make it successful. Moreover, there are many options for business sectors such as joint venture, limited liability company, and many more. However, setting up a company in Indonesia has its challenges. You still have to master several steps on how to set up a company in Indonesia.

Make your business activities clear

A common mistake that most foreigners do on the stage of setting up a company in Indonesia is they don’t make the business’ activities clear. They run a business without having a clear idea about the activities. They don’t know their goal in starting a new business. Thus, for those of you who want to set up a company in Indonesia, the first question you have to answer is, “What are going to be my business activities?”

Knowing your business activities is an important thing as it determines your business classification. Is it a limited liability company, a joint venture, or any other kind of business? Remember that there are business classifications that can’t be owned 100% by foreigners. It is because many businesses are in negative investment list so that it is restricted or prohibited for foreigners to own business in Indonesia.
Think about the size of your company and the team you have. How many foreigners will you have? Is it enough to run a business in Indonesia with your current capital? These questions will help you set the capital correctly. Indonesian company law defines the size of a company based on its capital.

Get enough capital

The current capital requirement in Indonesia nowadays is IDR 1 billion (US$ 75.000). So, if your current capital is IDR 0-50 million, your company is categorized as a micro-business, IDR 51 million-500 million is a small business, IDR 501 million-10 billion is medium-sized business, and IDR >10 billion is a large enterprise.
The location is another factor you should consider in setting up a company in Indonesia. You have to find the perfect location to make your business work. Different cities and regions in Indonesia might have different rules in setting up a business as well as costs and availability. Thus, you should do research to decide which city or region to start the business. You might also need recommendations and advice from the professionals such as business or legal advisor, accountants, and others depending on your needs.

Determine your company location

Last but not least, on the process of how to set up a company in Indonesia, you have to find professionals agent to register your company. Make sure that you find a service provider whose background has been checked and its behavior has been trusted. A professional agent will help you a lot in setting up a business in Indonesia.