How to establish a Perseroan Terbatas (PT)

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What is an PT?

A Perseroan Terbatas (PT)  or limited liability company is a legal entity in Indonesia. The PT is the most commonly applied form of business vehicle due to its limited liability nature and capitalization regime. A PT may take the form of a publicly listed company or a privately owned company. There are significant differences between a Local PT and a Foreign-owned PT.

Local PT

A PT is a company founded by a minimum of two Indonesian people as responsible shareholders, limited from the debt of the company.

Benefits of a Local PT

  1. Limited liability; shareholders are liable only for the amount of their original investment if the company goes into debt or insolvency.
  2. Easy to obtain additional funds/capital, such as by issuing new shares.
  3. The viability of the company is more secure
  4. Leadership control; replacement possibility via a general meeting of shareholders
  5. Company management has a clear responsibility to the owner or shareholders
  6. Set out clearly by law and other regulations, a limited liability company binds and protects the company’s activity
  7. The company registration request is specifically based on company size:
    • small business: Rp. 600 million
    • medium business: Rp. 600 million – 10 billion
    • large business: more than Rp. 10 billion.
  8. The company can have three main business activities.
  9. Usually no limitations apply, and can be used in government tenders.

Foreign-owned PT (PT PMA)

 

Type of Company Minimum Capital Shareholder Main Characteristics
Local PT Depends on Business Licence (SIUP) Categories 100% local share
  • Allowed to conduct business in up to 3 different business lines
  • Minimum paid-up capital for Small SIUP is Rp. 50.000.000 – Rp.  600.000.000
  • Minimum paid-up capital for Medium SIUP is Rp.  600.000.000 – Rp.  10.000.000.000
  • Minimum paid up Capital for Large SIUP is above Rp.  10,000,000,000
  • Can be sponsor company of KITAS
  • Minimum 2 shareholders, 1 Director, and 1 Commissioner
PT PMA Minimum investment plan US$1 million

Minimum paid in capital US$250,000

Based on negative investment list
  • In the form of a limited liability company,  can perform complete business activities in Indonesia (including revenue generation)
  • Equal rights and responsibilities with local company
  • Allowed to operate in  only 1 specific business area
  • Minimum 2 shareholders (either individuals or legal entities)
  • Minimum organizational  structure is 1 Director and 1 Commissioner
  • Minimum investment plan more than US$1 million
  • Minimum paid-up capital of US$250,000
  • Company can sponsor many foreign employees

Erwin Wicaksono

Firmansyah & Co Law Office

Erwin Wicaksono obtained his Bachelor of Laws degree from Diponegoro University, Semarang. For over 11 years he worked as a legal professional for large firms in Jakarta. He is a licensed advocate and member of the Indonesian Advocates Association (PERADI). Since 2015 Erwin is a Senior Lawyer at Firmansyah & Co. Law Office in Jakarta, bringing in his extensive experience in a multinational environment. His fields of expertise include Legal Drafting, Contract Drafting, Private Law, Man Power Law, Corporate Law, Environment Law, Land Law, Mining Law, Forestry Law, Union and society negotiation, Government liaison, Social dispute resolution, and Litigation.

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