Learning all the facets of Indonesia’s culture, employment laws, and more can take a significant amount of time and energy. When looking to expand your business, you must also hire employees, run your payroll, and set up a subsidiary. Globalization Partners can make your expansion easier through our Indonesia subsidiary outsourcing services. You don’t have to go through the lengthy Indonesia subsidiary setup process when you work with us. We ensure you meet all of Indonesia’s subsidiary laws and can focus on running your company without the stress of compliance.
How to Set Up an Indonesia Subsidiary
When you set up an Indonesia subsidiary, you need to ask yourself a few questions about your company. Where would you like to expand within Indonesia? And what kind of business are you planning on operating in the country? The answers to these questions can impact the Indonesia subsidiary setup process and determine where you incorporate and what type of entity you incorporate as.
Different regions in Indonesia have separate rules, costs, and availability that impact your incorporation process. You should always research the physical area where you plan to base your office before setting up your Indonesia subsidiary. You also need to decide which subsidiary structure is best for your business goals — limited liability company (LLC), representative office, or joint venture company.
The most common subsidiary structure is a limited liability company, which can help the parent company and the subsidiary operate somewhat independently. The steps to set up an Indonesia subsidiary include:
- Paying the fees to clear your company name at a bank
- Arranging for a notary to get a standard form of the company deed
- Notarizing all company documents
- Applying for approval of the deed of your establishment through the Ministry of Law and Human Rights
- Obtaining a Building Management Domicile Certificate
- Applying for a Certificate of Company Domicile
- Paying non-tax state revenue fees for legal services
- Applying for a permanent business trading license
- Obtaining a company registration certificate
- Registering with the Ministry of Manpower
- Applying for social security, healthcare insurance, taxpayer registration number, and more.
Indonesia Subsidiary Laws
Indonesia subsidiary laws vary based on the type of entity you choose to incorporate as. Your LLC requires at least one director, two local Indonesian shareholders, and one commissioner. The commissioner does not have to be a resident, but they must supervise the company, examine the annual report, and approve a budget plan.
The paid-up share capital you need to meet Indonesia’s subsidiary laws depends on your company’s size. The three sizes and their corresponding share capital amounts are:
- Small size company: $3,745-$37,435
- Medium size company: $37,435-$748,740
- Large size company: Above $748,740
You must incorporate as a medium-size company if you plan to sponsor foreign employees instead of hiring Indonesian employees. All issued share capital for any size company must get deposited into your company’s bank account in Indonesia right after you incorporate.
Benefits of Setting Up a Indonesia Subsidiary
Setting up your Indonesia subsidiary is the start to legally operating in the country. LLCs also provide benefits for parent companies and subsidiaries. Your parent company will have limited liability for the subsidiary’s activities, and you’re free to operate your subsidiary according to Indonesia’s culture and specific employment compliance laws.
If you decide to set up your Indonesia subsidiary alone, it takes about two to three months to incorporate. Globalization Partners offers greater benefits through our Indonesia subsidiary outsourcing services. We use our existing subsidiary in Indonesia to help you start working in a few days instead of two or three months. Our experts understand every Indonesia subsidiary law, and we will shoulder your compliance, so you can instead focus on growing your new location.
Other Important Considerations
Before you start the Indonesia subsidiary setup process, you should create an action plan that includes the time and money you will need. Set aside time in your schedule to travel back and forth to Indonesia to hire employees, establish your payroll, and more. We also recommend working with your accounting or finance department to budget the right amount of money you’ll need for subsidiary costs.
Let Globalization Partners Help With Your Expansion
You don’t have to set up a subsidiary to start working in Indonesia. Globalization Partners will use our Indonesia subsidiary outsourcing services to help you work in Indonesia faster and easier. Contact us today to learn more.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.