Establish a company and open a bank account in Indonesia

Under Indonesian law, any PMA company must consist of a minimum of two members (director and commissioner). The minimum shareholding in the company is 1%. Another foreign company may also own a share in an Indonesian company. Shareholders can be citizens of any country. In some cases, there may be restrictions by the bank on citizens of specific countries.

The regulator has no requirement for mandatory presence of Indonesian nationals in the company. However, in order to open a bank account and obtain a tax number, the director of the company must be a resident. This requirement can be met either by obtaining a residence permit by one of the founders of the company or by hiring a local resident as a director.

The director of the company must have residency status in Indonesia. The director may not own a shareholding, in which case there must be two members in addition to the director. Decisions within the company are made by the shareholders.

The main task of the director when starting the company is to open a bank account. Once the account is opened, all management tools are transferred to the owner, payments and their confirmation are made via internet banking. In the case of a hired director, the owner of the company has the option to restrict the director's independent access to financial transactions, thus ensuring the safety of the funds stored in the account.

In order to open a bank account, a company director must have a long-term residence permit or be resident in the country. Previously, until 2024, it was possible for some banks to avoid this requirement. Also, a personal visit by the director will be required to open an account at any bank in Indonesia.

Banks in Indonesia have low account maintenance fees and fees for sending international payments. Most banks have more than 10 currencies available including USD, EUR, CNY, GBP, JPY. Also banks in Indonesia offer favorable conditions for currency exchange, direct cross currency exchange is possible without intermediate conversion to IDR.

Local legislation provides for regulation of cryptocurrency. Cryptocurrency is not a means of payment in Indonesia. However, the regulator allows buying and selling transactions and the use of cryptocurrency as a commodity.

The country has large licensed marketplaces that allow buying and selling of cryptocurrency for individuals and legal entities. To register an account for a legal entity, it is necessary to undergo the appropriate verification and link your bank account to the account of the exchange. It is important to understand that the commercial activities of an exchanger are regulated by law and cannot be carried out without an appropriate license.

According to Indonesian legislation, the minimum amount of authorized capital for PMA is IDR 10 billion (about USD 640 thousand). Obligations on placement of share capital are divided among shareholders according to their shares.

The regulator does not require a one-time placement or holding of the amount of the authorized capital on the company's account. The closing date of the authorized capital commitments is not regulated. In order to guarantee avoidance of sanctions from the regulator, it is required to show positive dynamics in increasing the volume of investments.

Indonesia is not an offshore jurisdiction. The country has a progressive income tax rate. The benchmark for active companies is 22% of profits. VAT is 11% and is payable on business activities within the country.

Indonesia's tax system has a low level of digitalization. However, the regulator strictly monitors the timeliness of reporting. If there are no violations of deadlines and obvious errors in the reports, the inspection is carried out in a fairly loyal manner. The frequency of submitting reports depends on the level of commercial activity. It is mandatory to submit an annual report and quarterly investment reports. The need for auditing is of a recommended nature.