GUIDE TO DOING A BUSINESS IN INDONESIA

About This Project

Ways To Operate A Business

There are various ways to operate a business in Indonesia including:

  • setting up a joint venture company
  • establishing a representative office
  • appointing an agent, distributor or importer

 

Joint venture

The ‘Penanaman Modal Asing’ (PMA) is the corporate entity required for foreign investors under the terms of the foreign investment law. It takes the form of ‘Perseroan Terbatas’ (PT), a limited liability company, with the joint ventures as shareholders. PMA companies:

  • may be either publicly listed on the stock exchange or privately owned
  • must have 2 parties holding shares either a legal entity or an individual

The foreign investor’s shareholding percentage must meet requirements under the Indonesia Investment Coordinating Board’s Negative Investment List (DNI).

 

Representative office

Foreign companies may open and maintain a representative office and the representative may be foreign or local. Such offices:

  • are not permitted to carry out any profit making business activities
  • can undertake sales promotion, market research and assistance to local agents and distributors

You should appoint third party advisers to assist with documentation as dealing with government ministries can be challenging. Lack of transparency can make the process last longer than expected.

The third party advisor needs to be reliable, experienced and most importantly have close connections with the relevant authorities.

Contact the Department for International Trade (DIT) Indonesia for information about third party advisors.

 

Agent, distributor or importer

A foreign company will usually appoint one or more agents or distributors. They can keep track of market regulations, which can change at short notice.

You should spend time taking local advice and assessing a range of potential agents before making a choice. Beware of agents promoting similar or identical products.

Department for International Trade (DIT) Indonesia can help you identify and meet potential agents and distributors.

 

 

Custom Field

GUIDE TO DOING BUSINESS IN INDONESIA

Date

20 November

Category
Business