Director vs Commissioner in a Foreign-Owned Company in Indonesia

Are you planning to open a foreign-owned company in Indonesia? Before filling any paperwork, you need to understand how the company’s board should be structured, starting with the difference between a Director and a Commissioner. This guide is written for foreign entrepreneurs, overseas parent companies, and investors setting up a PT PMA for the first time, or reviewing an existing one, who want a clear, practical answer instead of legal jargon.

Director vs Commissioner, the short answer is that a Director manages daily operations and legally represents a PT PMA (Perseroan Terbatas Penanaman Modal Asing, Indonesia’s foreign-owned limited liability company), while a Commissioner supervises the Director’s performance and advises on company policy without handling daily management. This distinction, set out in Indonesia’s 2007年第40号公司法, forms the country’s two-tier board system, separating executive authority from supervisory oversight.

Many foreign investors get stuck at exactly this point: unsure who can sign contracts, who carries personal liability, and how appointing the wrong person can delay licensing by weeks. Business Hub Asia works with foreign investors on this exact structuring stage, and this guide is built to double as a practical roadmap, not just legal theory.

Every PT PMA must appoint at least one Director and one Commissioner before it can register through the OSS-RBA (Online Single Submission – Risk-Based Approach) licensing system. The Director signs business contracts, hires staff (foreigners are not authorized to sign employment agreements, though), and answers for the company’s day-to-day results. The Commissioner holds no executive power but can still be held personally liable if negligent supervision causes the company financial loss.

Both roles can be filled by foreign nationals, though a resident Director is required in most practical cases. Confusing the two roles, for instance by letting a Commissioner sign operational documents, creates governance risks that can delay licensing or expose individuals to liability. The sections below unpack each role, the appointment process, and a practical checklist for foreign investors finalizing their PT PMA structure.

Key Acronyms Used in This Article

Indonesian company law and licensing come with their own shorthand. The table below spells out every acronym used in this guide before it appears in context.

What Is a Director in a PT PMA?

Under Article 92 of Law No. 40 of 2007 on Limited Liability Companies, the Director holds full authority to manage a PT PMA and to represent it in and out of court. The Director signs contracts, opens bank accounts, and drives daily operational decisions.

A PT PMA needs at least one Director. A foreign national working from inside Indonesia needs a valid KITAS (Kartu Izin Tinggal Terbatas, Temporary Stay Permit) with a Director or Investor designation before starting duties. A non-resident Director may hold the title but cannot sign documents on the company’s behalf while outside Indonesia.

Indonesia’s Manpower Law bars foreign Directors from handling human resources tasks directly, a function reserved for Indonesian nationals. Liability follows authority: Article 97 of the Company Law holds each Director personally liable for losses caused by fault or negligence, unless good faith and due diligence can be demonstrated.

Related article :

Can a Foreign Director Run Multiple Companies in Indonesia?

Types of KITAS in Indonesia: The Complete Guide for Expats and Foreign Nationals

What Is a Commissioner in a PT PMA? Understanding the Indonesia Company Commissioner Role

Article 108 of the Company Law assigns the Commissioner, known locally as the Dewan Komisaris, a supervisory and advisory role over the Board of Directors. A Commissioner does not manage daily operations and cannot bind the company to contracts under normal circumstances.

Every PT PMA needs at least one Commissioner. The role can be filled by a foreign national who does not reside in Indonesia, provided that individual is not already serving as a resident commissioner for another Indonesian company.

Because supervision carries real consequences, Article 114 makes each Commissioner personally, and jointly with fellow Commissioners, liable for losses traced to negligent oversight. A Commissioner avoids liability only by proving supervision was performed in good faith, free of conflicts of interest, with proper advice given to prevent losses.

Foreign companies weighing a resident versus non-resident Commissioner often find it useful to talk through the trade-offs with the BHA team before finalizing the appointment.

Director vs Commissioner: Key Differences at a Glance

The table below summarizes how the two roles compare across the areas that matter most for compliance and day-to-day operations.

PT PMA Structure Requirements for Directors and Commissioners

A compliant PT PMA structure under BKPM (Badan Koordinasi Penanaman Modal, Indonesia’s Investment Coordinating Board) Regulation No. 5 of 2025 must include at least two shareholders, one Director, and one Commissioner, alongside a registered Indonesian business address. The regulation cut minimum paid-up capital from IDR (Indonesian Rupiah) 10 billion to IDR 2.5 billion, a 75 percent reduction that lowered the entry barrier for foreign companies.

The total investment plan must still exceed IDR 10 billion per five-digit KBLI (Klasifikasi Baku Lapangan Usaha Indonesia, Indonesian Standard Business Classification) code, generally excluding land and buildings. Note: This investment can be done through gradual investment once the minimum paid up capital is made. One individual cannot serve as both Director and Commissioner in the same PT PMA, since Indonesian law treats management and supervision as separate functions that a single person cannot perform simultaneously.

Confirming capital and structure figures against the latest BKPM rules can be time-consuming. BHA can review a proposed structure and flag gaps before it reaches submission.

How to Register a Company in Indonesia: Where This Role Split Fits In

Company registration in Indonesia runs through several linked stages, and the Director and Commissioner must be determined from the start. The notarial Deed of Establishment records both appointments, followed by Ministry of Law and Human Rights approval, NPWP (Nomor Pokok Wajib Pajak, Taxpayer Identification Number) registration, and NIB (Nomor Induk Berusaha, Business Identification Number) licensing through the OSS-RBA system.

Indonesia’s investment climate continues to reward this structure. BKPM data released in April 2026 show total investment realization reached IDR 498.8 trillion in the first quarter of 2026, a 7.2 percent year-on-year increase, with foreign direct investment contributing IDR 250.0 trillion, or 50.1 percent of the total. 

Company registration in Indonesia for a PT PMA generally takes four to eight weeks from document readiness to NIB issuance, according to licensed corporate service providers tracking current OSS-RBA processing times. The great news is that Business Hub Asia (BHA) can help to set up the company 在 10 working days, provided that all requirements are fully completed and ready. 

BHA’s registration team routinely walks businesses through each of these stages, keeping the OSS-RBA filing on schedule and catching document gaps early.

Related article : 如何在印度尼西亚注册外国公司（PT PMA）：进入市场的无缝途径

Director and Commissioner Appointment Period

Directors and Commissioners are appointed for a fixed term rather than indefinitely. The Articles of Association should specify this term, and market practice in Indonesia typically sets it at three to five years, renewable through a subsequent shareholder resolution.

If a Director or Commissioner leaves the position before the term ends, whether through resignation, demise, or removal, the shareholders must convene a General Meeting of Shareholders (RUPS) to appoint a replacement. The position cannot remain vacant, since a PT PMA is required to maintain at least one Director and one Commissioner at all times.

Once the appointment period expires, the RUPS must reconvene to either reappoint the incumbent Director or Commissioner for a new term or appoint a different individual to the role. This decision should be recorded in the RUPS resolution and reflected in the company’s official records to keep its governance structure compliant.

Many foreign companies bring the BHA team in at the RUPS stage so the notarial deed and AHU filing are handled correctly the first time.

Related article : Indonesia AGMS Compliance 2026: New Annual Reporting Rules Every PT PMA Must Know Now

How to Appoint a Director in Indonesia

Bringing a new Director onto your board or replacing an existing executive is a formal legal process rather than a simple internal onboarding step. The transition requires official authorization from the shareholders before the Ministry of Law and Human Rights updates its national records.

• Convene the General Meeting of Shareholders (RUPS): Call either an annual or extraordinary session to formally vote on and approve the directorial appointment.
• Satisfy the Legal Quorum Requirements: In alignment with Article 86 of the Company Law, ensure at least 50% of the company’s voting shares are represented, securing a simple majority vote unless your corporate Articles of Association state otherwise.
• Draft the Notarial Deed: Commission a licensed Indonesian notary to draw up the Akta Perubahan Data Perseroan, which legally documents the changes made to the board of directors.
• Submit via the AHU Portal: Finalize the state registration by logging the change into the Legal Entity Administration System (AHU) within the strict 30-day window mandated by Permenkum No. 49 of 2025.
• Refresh Your OSS-RBA Profile: Synchronize the national business licensing system to reflect the credentials of the new executive.
• Process Immigration Permits: Arrange a valid KITAS if you are appointing a foreign national who will be managing day-to-day operations on the ground in Indonesia.

Failing to meet the 30-day AHU filing window invalidates the initial submission, forcing the company to repeat early steps of the process. This oversight can easily freeze critical operations, including corporate banking updates, pending business licenses, and essential immigration procedures.

To keep everything running smoothly, many foreign investors involve the BHA team right at the RUPS planning stage, ensuring the subsequent notarial deeds and AHU submissions are executed flawlessly from day one.

Foreign Company Registration Indonesia: Can Foreigners Serve as Director or Commissioner?

Foreign company registration in Indonesia allows both roles to be filled by non-Indonesians. A foreign Director actively managing the company from inside Indonesia needs a KITAS and an NPWP. A foreign Commissioner who does not perform daily management can remain based overseas and generally does not need to relocate.

If the majority of a PT PMA’s Directors are foreign nationals, at least one Director must be an Indonesian resident, a rule intended to preserve local accountability inside the management layer. Certain regulated sectors, including direct trading and multi-level marketing, additionally require an Indonesian citizen to hold the Director or Commissioner position.

For foreign investors unsure which nationality mix fits their situation, BHA can map out a compliant Director and Commissioner combination during an initial consultation.

PT PMA Requirements Checklist: Director and Commissioner Roles

As part of the broader PT PMA requirements, foreign investors should confirm the following before filing with the Ministry of Law:

• At least two shareholders are named, whether individuals or legal entities.
• At least one Director is appointed, with a resident Director in place if operations run from Indonesia.
• At least one Commissioner is appointed, held by a different individual from any Director.
• The Deed of Establishment lists both roles accurately, matching passport or ID details exactly.
• Paid-up capital of at least IDR 2.5 billion is ready for deposit after incorporation.
• KITAS applications are prepared for any foreign Director or Commissioner working inside Indonesia.
• RUPS minutes and notarial deeds are kept on file for every appointment or change.
• AHU filing is completed within the 30 days window after any board change.

Dos and Don’ts for Directors and Commissioners in a PT PMA

Do:

• Do set clear authority limits for the Director in the Articles of Association.
• Do apply for KITAS before a foreign Director begins working inside Indonesia.
• Do keep written records of the Commissioner’s supervisory advice, since these support a liability defense under Article 114.

Don’t:

• Don’t let a Commissioner sign operational contracts or banking documents, since this can be treated as unauthorized management.
• Don’t assign one person to both Director and Commissioner roles in the same PT PMA, Indonesian law does not permit this.
• Don’t assign HR-related tasks to a foreign Director, the Manpower Law reserves this function for Indonesian nationals.
• Don’t miss the 30-day AHU filing deadline after appointing or replacing a Director or Commissioner.

Common Mistakes and Other Significant Points to Note

Many foreign investors assume a Commissioner carries no legal risk because the role is non-executive. Article 114 says otherwise: joint and several liability applies whenever negligent supervision causes company losses, regardless of how limited the Commissioner’s day-to-day involvement is.

Some foreign investors also skip the KITAS application for a Commissioner who visits Indonesia periodically for board matters, which creates immigration exposure even though the role is remote by design. A further common error is delaying AHU filing past the 30-day deadline, which can freeze pending licenses, bank account updates, and KITAS renewals tied to the appointee.

How Business Hub Asia Can Help

Structuring the Director and Commissioner roles correctly from the outset avoids costly restructuring later. Business Hub Asia supports foreign investors through the full range of PT PMA requirements, from drafting the Deed of Establishment to RUPS documentation, AHU filing, and KITAS applications for Directors and Commissioners.

Businesses considering a PT PMA setup, or reviewing an existing structure, are welcome to reach out to Business Hub Asia for a tailored consultation before finalizing director or commissioner appointments.

Setting Your PT PMA Up for Long-Term Success

Getting the Director and Commissioner roles right protects a PT PMA from governance disputes, liability exposure, and licensing delays down the road. The distinction is not a formality: it shapes who can sign contracts, who carries legal risk, and how quickly a company can move through registration and immigration processes.

Foreign investors who take time to structure these roles properly, backed by clear Articles of Association and complete documentation, set their PT PMA up for smoother operations from day one. Business Hub Asia works alongside foreign investors at every stage of PT PMA requirements, helping structure Director and Commissioner appointments correctly and reducing the risk of costly corrections later.