Business Registration in Indonesia: Step-by-Step Guide for 2025

Indonesia has long been considered one of the most promising destinations for foreign investors in Southeast Asia. With over 270 million people, a growing middle class, and steady economic growth, the country offers vast opportunities across industries from manufacturing to technology and consumer goods.

In 2025, the Indonesian government will continue to streamline investment policies through the Online Single Submission – Risk-Based Approach (OSS-RBA) system, tax incentives, and sector-specific reforms. However, navigating business registration in Indonesia can still be complex without proper guidance.

This article provides a comprehensive step-by-step guide to registering a business in Indonesia, including legal requirements, process flow, common challenges, and best practices for foreign investors.

Why Register a Business in Indonesia?

Registering a company in Indonesia provides a legal foundation to conduct business, hire employees, and access one of the region’s fastest-growing consumer markets. Some of the key reasons include:

1. Expanding Market Opportunities. Indonesia is the largest economy in Southeast Asia with GDP growth projected to remain stable at 5%+ annually (World Bank, 2024). Sectors such as healthcare, construction, and the digital economy are expanding rapidly.
2. Government Incentives. Foreign investors can benefit from tax holidays, customs facilities, and investment allowances in priority sectors such as renewable energy, pharmaceuticals, and technology.
3. Ease of Market Entry. Through OSS-RBA, companies can apply for a Business Identification Number (NIB) and other licenses online, reducing bureaucracy compared to the past.

Business Hub Asia helps investors ensure smooth registration while maintaining compliance with regulatory requirements, enabling companies to focus on growth instead of paperwork.

Understanding Business Structures in Indonesia

Before registering, investors must determine the right business structure, as this impacts ownership rights, capital requirements, and operational flexibility.

1. PT PMA (Foreign-Owned Limited Liability Company)
   • Allows foreign shareholders.
   • Minimum investment requirement: IDR 10 billion (~USD 750,000).
   • Suitable for long-term operations and most industries.
2. PT (Local Limited Liability Company)
   • Owned entirely by Indonesian shareholders.
   • More flexible for small and medium-sized businesses.
   • Often used by local partners or professional services.
3. Representative Office (RO/KPPA)
   • Cannot generate revenue; limited to liaison, supervision, or market research.
   • No capital requirement.
   • Ideal for testing the market before full incorporation.

For a detailed comparison, see our article: Choosing Company Formation Between PT PMA, PT PMDN, and Representative Office in Indonesia.

Key Requirements for Business Registration in Indonesia

Foreign investors should prepare the following before beginning the registration process:

• Minimum Capital Investment – For PT PMA, the required investment plan is IDR 10 billion, with paid-up capital deposited after bank account opening.
• Company Structure – At least 2 shareholders, 1 Indonesian director, and 1 commissioner. For PT PMA, foreigners may act as shareholders and directors, Registered Office Address – A physical or virtual office is required for company domicile.
• Business Classification (KBLI Code) – Each business activity must be classified under Indonesia’s KBLI system, which determines whether the sector is open, restricted, or requires special licensing.

Reference: OSS Indonesia – NIB Guidelines.

Step-by-Step Business Registration Process (2025 Update)

Step 1: Company Name Reservation & Deed of Establishment

• Conduct a name search via the Ministry of Law and Human Rights.
• Draft Deed of Establishment with a notary and obtain approval from the Ministry.

Step 2: Obtain Tax ID (NPWP)

• Apply for a company Taxpayer Identification Number (NPWP) at the Tax Office.
  Mandatory for all business entities.

Step 3: Register Business Identification Number (NIB) via OSS-RBA

• Submit company details in OSS-RBA portal.
• NIB acts as the company’s general business license and import/export license if applicable.

Step 4: Bank Account Opening & Capital Deposit

• Open a corporate bank account in IDR or USD.
• Deposit paid-up capital as per investment plan.

Step 5: BPJS Registration

• Register employees with BPJS Ketenagakerjaan (Employment Social Security) and BPJS Kesehatan (Health Insurance).
• Mandatory for companies operating in Indonesia.

Related: How to Register a Foreign Company (PT PMA) in Indonesia.

Common Challenges & How to Overcome Them

1. Complex KBLI Classification
   Many sectors overlap in KBLI codes, requiring expert consultation to ensure compliance.
2. Different Requirements by Local Authorities
   Although OSS is centralized, regional governments may impose zoning or location-specific requirements.
3. LKPM (Investment Activity Report) Obligation
   Foreign companies must submit quarterly or biannual reports to BKPM.

Business Hub Asia provides end-to-end support to simplify the complexity, from KBLI classification to compliance reporting.

Indonesia Business Registry & Compliance Reporting

Once registered, your company becomes part of the national business registry under OSS-RBA.

• NIB serves as the official identifier, replacing older licenses (SIUP, TDP).
• Companies must maintain ongoing compliance, including LKPM reporting and annual tax filings.
• Failing to comply may result in license suspension.

Tips & Best Practices for Foreign Investors

• Start lean with a virtual office – recognized for legal domicile.
• Plan for sector-specific permits – e.g., medical device distribution (IDAK), food & beverages (BPOM), construction (BUJKA).
• Choose a strategic location – Make sure the register office address is located in a city that matches your actual activities.
• Consider tax planning early – Indonesia has agreements to avoid double taxation with many countries.

Conclusion & Call to Action

Business registration in Indonesia requires a clear understanding of legal requirements, processes, and compliance obligations. By following the steps outlined above and seeking professional assistance, foreign investors can establish a strong foundation for growth in one of Asia’s most dynamic markets.

Partner with Business Hub Asia for seamless business registration in Indonesia. Contact us today for a free consultation and let us handle the complexities, while you focus on your business success.