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how much is it cost to set up new company in Indonesia

How Much Is it Cost to Set Up New Company in Indonesia?

Before we know more about how much is it cost to set up new company in Indonesia. In principle, there are 3 requirements for the establishment of Limited Liability Company (PT) as stipulated in Law NO. 40 Year 2007 regarding Limited Liability Company. First about its founders; second, on the foundation basis; and third, about capital.

Terms of Establishment of Companies in Indonesia

Let’s study it in more detail before focusing on how much is it cost to set up new company in Indonesia.

a) About the Founder

PT must be established at least by 2 people, and made by notaries deed in Indonesian language. Because basically, the Company is established under the agreement, so it must have more than 1 (one) shareholder / founder.

The term “person” herein is an individual, whether Indonesian or foreign citizen or Indonesian or foreign legal entity (see Elucidation of Article 7 paragraph 1 of the Limited Company Law).

If the terms of the two persons are not met, it will result in the change of responsibility of the company that is in fact limited to unlimited responsibility. This means that all of PT’s engagement and losses become the responsibility of its founder personally.

Legal basis that we can hold that is;

[1] Article 7 paragraph 7 of the Limited Liability Company Law states that the provisions requiring the Company to be established by at least 2 persons shall not apply to: a. Persero wholly owned by the state; or b. A Company that manages stock exchanges, clearing and guarantee institutions, depository and settlement institutions, and other institutions as stipulated in the Capital Market Law.

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[2] Elucidation of Article 7 of the Limited Liability Company Law: “… the Company is incorporated under the agreement, therefore having more than 1 (one) shareholder”.

[3] Article 7 paragraph 6 Limited Liability Company Law: “In the event that the period of time referred to in paragraph (5) has been exceeded, the shareholders remain less than 2 (two) persons, the shareholder is personally liable for all engagements and losses The Company, and upon the request of the interested parties, the district court may dissolve the Company. ”

b) About Foundations

PT must be established by making an authentic deed in the presence of a notary. This authentic deed contains the Articles of Association and other particulars relating to the establishment of the PT (see Article 8 of the Limited Liability Company Law), and must be approved as a legal entity of the Minister of Law and Human Rights, then shall be registered in the register of companies to the relevant departments as regulated in Law no. 3 of 1982 concerning Compulsory Corporate Registration Jo Article 29 Paragraph 1 to 6 Limited Liability Company Law.

III. About Capital Stock

This third part is about how much is it cost to set up new company in Indonesia. Based on Article 32 Paragraph 1 of the Limited Liability Company Law of minimum capital of fifty million rupiah.

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However, since the issuance of Government Regulation no. 29 Year 2016 About Changes in Authorized Capital of Limited Liability Company, the minimum requirement of the authorized capital of the PT is being less, so that there is no more minimum capital of PT.

So about the amount of authorized capital of PT, submitted to the agreement of the parties (founder of PT) willing to enter any capital, as stated in Deed of Establishment of PT as stated in Article 1 Section 2 and 3 PP. 29/2016.

Article 1 Paragraph 2 and 3 of Government Regulation no. 29/2016:

“(1) The Limited Liability Company shall have the authorized capital of the company

(2) The authorized capital of a Limited Liability Company shall be set forth in the articles of association contained in the deed of incorporation of a Limited Liability Company.

(3) The amount of authorized capital of a Limited Liability Company as referred to in paragraph (1) shall be determined by agreement of the founders of a Limited Liability Company. ”

Establishment of Company Procedures in Indonesia

Here are the ways and procedures of establishing PT based on deregulation of Law no. 40 Year 2007 regarding Limited Liability Company:

  1. Submission of company name, payment to name message, issuing permit of company name is done in one service system with long process of 2 working days, cost about 200 thousand rupiah.
  2. Obtain standard corporate deed from notary, 1 working day with cost about 1 million rupiah for PT.
  3. Approval of permit for the establishment of a legal entity, the issuance of legal entity license, the payment of PNBP, legalization of legal entity, 1 working day at a cost of about Rp 1 million.
  4. Submission of Trading Business License and Company Registration License and Social Health Insurance Provider Board online at PTSP, 1 working day free of charge.
  5. Registration of companies in the Office of Manpower, 1 working day free of charge.
  6. Submission of a list of Online Social Employment Implementing Agencies online, 2 working days free of charge.
  7. Obtain the number of Taxpayer Tax Number and VAT Collector Number as a Taxable Entrepreneur Number online.
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If you do not have much time to take care of it yourself, you can use certain services with the cost of establishing PT as follows:

Period Cost
Small Class Middle Class Large Class
65 working days Rp 9.500.000 Rp 11.000.000 Rp 12.000.000
42 working days Rp 11.000.000 Rp 12.500.000 Rp 15.000.000
30 working days Rp 13.000.000 Rp 16.500.000 Rp 18.000.000

Now after you have known how much is it cost to set up new company in Indonesia, it is time for you to prepare yourself. Good luck!

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