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Establishment of Legal Entities: Targets & Benefits
In Indonesia, a legal entity is a formal business structure recognised by the government. The two main types of legal entity concepts are Limited Liability Companies (PT) and Foreign Investment Limited Liability Companies (PT PMA). The existence of legal entity types is crucial for several reasons.
One of the main reasons is the need to obtain a Building Use Right (HGB). Indonesian land law generally limits land ownership to Indonesian citizens and certain legal entities. HGB itself is the right to construct and own buildings on land owned by the state or another party. Obtaining an HGB generally requires establishing a legal entity. This involves establishing a company or organisation recognised as a legal entity under Indonesian law.
Through a PT or PT PMA, foreign investors can acquire property rights, provided the land use aligns with the company’s business activities and complies with applicable regulations. This arrangement allows foreign investors to establish a legal entity in Indonesia, simplifying property ownership while ensuring compliance with the country’s land ownership laws.
Advantages of LMI Consultancy Assistance in Establishing a Legal Entity
A legal consultant with expertise in Indonesian corporate law can navigate the intricacies, assist with the necessary documentation, ensure compliance with local regulations, and provide valuable insights to help you choose the most suitable legal structure for your business, thus mitigating risks and maximising the chances of a successful establishment.
By establishing a legal entity with LMI Consultancy, our clients can benefit from legal expertise, proper documentation, a simplified process, and customised solutions.
Our expert teams are located across Jakarta & Bali, ready to assist you completely with a hassle-free Inheritance Deed process!
Complete Guide to Establishing a Legal Entity in Indonesia
- Consult the type of property you would like to purchase and how it matches the type of business in Indonesia.
- Our team will navigate the process of your Company Registration according to the law.
- Once finished, we will contact you to continue the property transaction process.
Requirements for Legal Entity Establishment Documents in Indonesia
1. Minimum 2 shareholders
2. Identity and contact details of Company Shareholders: For Indonesian Individuals, KTP and NPWP For Foreign Individuals, a valid passport For Indonesian Companies, a copy of the Article of Establishment and the amendments and the Approval from the Ministry of Law and Human Rights, Domicile Letter, Tax Id, Business License, Company Registration Certificate (TDP/NIB) For Foreign Companies/entities, a copy of the Articles of Association in English or its translation in Bahasa Indonesia from a sworn translator and already got an Apostille Stamped, Scan Copy of the Passport Director, Detail Address of the Company.
- Indonesian citizen: KTP and NPWP
- Foreign nationals: Valid passport
- Indonesian Company: Copy of Deed of Establishment and Latest Amendment along with
- Endorsement from the Ministry of Law and Human Rights, Company Domicile, NPWP, Business Licence, TDP/NIB
- Foreign Company/Entity: Copy of Articles of Association in English or a sworn and legalised translation, Scan of Director’s Passport, Full Address of the Company.
3. Identity and contact details of Company Directors and Commissioner: For Indonesian individuals, KTP, NPWP, email and phone number. For Foreign Individuals, a valid passport, email and phone number.
- Indonesian citizen: KTP, NPWP, email address and phone number
- Foreign nationals: Valid passport, email address and phone number
4. Copy of the Lease Agreement between the company and building management
5. Pas Photo 3X4 Background Red (Bali only)
6. Building Permit (IMB) and Land Building Tax (PBB/Pajak Bumi Bangunan) (Bali Only)
What are the minimum requirements to establish a Legal Entity in Indonesia?
- Establishing a legal entity in Indonesia would require a foreign investor to fulfil the following conditions:
- Minimum of 2 shareholders.
- Minimum paid-up capital requirements vary depending on the business sector, typically ranging from IDR 2.5 billion to IDR 10 billion.
- Specific licenses and permits might be required based on the sector.
Need more information about Home Ownership Credit? Check out some of our guides!
- Can expatriates get a mortgage in Indonesia
- Steps to get a mortgage in Indonesia
- Understanding KPR products in Indonesia
- Why It's Important to Use a Mortgage Consultant
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