FREQUENT ASKS AND QUESTIONS (FAQ)
1. Q: How to set up a new Foreign Direct Investment (FDI) Company in Indonesia?
A: – Foreign Investment (Penanaman Modal Asing/PMA) should be incorporated as an Indonesian limited liability company (Perseroan Terbatas/PT) and domiciled in Indonesia.
- To invest in Indonesia an investor should first look at “Negative List of Investment” (Daftar Negatif Investasi /DNI) contains those business sectors that are absolutely closed to all investment, closed to only foreign investment, and which are still opened under certain conditions. Outside the list, all sectors are opened to investment.
- Foreign investment approval will be issued by Investment Coordinating Board (Badan Koordinasi Penanaman Modal/BKPM) in Jakarta. However , for project located in a Bonded Zones, investors should submit the application to BKPM through the respective Bonded Zone Authority.
- To apply for a new investment approval applicants have to complete and submit 2 (two) copies of form Model I/PMA which should be a minimum participated by 2 (two) shareholders.
- Following the evaluation process, The Chairman of BKPM will issue The Investment Approval- Upon the issuance of the investment approval, a new company can be legally established through the execution of the articles of incorporation in notary deed form.
2. Q: What is the difference between The Investment Approval and The Permanent Business License?
A: For Establishing the new company should have the investment approval which is usually needs more or less 36 months for setting up Land / Building and Machineries and there after the company having started commercial production shall be required to submit Permanent Business Licenses (Ijin Usaha Tetap/IUT) to BKPM for Operating stage.
3. Q: How many Foreign Direct Investment (FDI) are there now in Indonesia?
A: The Capital Investment within the framework of FDI as well as Domestic Investment approved are mentioned at facts & figures on our website http://www.bkpm.go.id.
4. Q: How to set up a new Representative Office in Indonesia?
A: – A foreign company Representative Office (Kantor Perwakilan Perusahaan Asing/KPPA) outside the finance sector shall be established with the approval of the Chairman of BKPM.
- To apply the approval , applicants have to submit 2 (two) copies of form Model KPPA to the BKPM Office with the following attachments.
5. Q: How do we know about either a business field is open for investment or other business is closed?
A: Basically all of business fields are opened to investment in the framework of FDI as well as Domestic Investment, except some of those business fields are closed or regulated ones as stipulated as “Negative List /Daftar Negative Investasi (DNI)” as those mentioned in Presidential Decree number 96/2000 jo.118/2000.
6. Q: What kind of Tax incentives are provided for the company?
A: Now , investment in certain industry and in certain region will be granted tax facilities as follows:
1. Reducing net (taxable) income up to 30% (5% per annum) of the value of the realized investment
2. Accelerated depreciation and amortization
3. Loss carried forward facility for period of no more than 10 years
4. A 10% income tax on dividends, and possibly being lower if stipulate din the provisions of an existing particular tax treaty
7. Q: Is it possible to have 100% shareholding for Foreigners?
A: Yes it is, basically a new company can be established in the form of 100% foreign ownership, which should be a minimum participated by 2 (two) shareholders either as foreign individuals or companies entity according to legal conditions.
8. Q: Who is the contact person that we can ask about the progress in processing and finishing the such approvals?
A: We will let you know about the persons depend on the kind of application , in other hand you can try to find out as stipulated as the structure of organizations mentioned in our website
9. Q: How long will it take to finish an investment approval?
A: The entire process would take a maximum of 10 (ten) working days since completing the application letter and its attachments.
10. Q: About Policy
A: Depends on the level of the strategic policy or operational measures
11. Q: How much does it cost to have an investment approval?
A: There is not any cost to be spent at all to have the approval , it is free of charges formally.
12. Q: How about Racing winning the local championship?
A: We don’t think Racing could win ever again. We are talking about a very poor team with no soul. That’s the typical case of ‘pechofrio-sitis’.
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