Opening a Local Business, Laws and more..

Daniel Gomez

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Joined
Jul 25, 2019
Messages
38
Hello all,
it's been a while but it is good to be back. Need some information, more like confirmation on my research. 1) Foreigners can not legally own a local company (PT), correct? If there are any updated laws or regulations, I'd like to be informed.
2) What is it common for people to start small local business (PT) and sell them here? Seems to me that this isn't a very common practice in Indonesia. In the States some people start business for the purpose of selling them for a profit. The idea is that the new owner would scale it up and make a great profit in the future. Is there anything similiar to this here in Indo, if there is, where should I start looking ?
 

jstar

Mr. 10,000
Joined
Jul 31, 2016
Messages
4,415
A PT is not a ‘small’ local business. A CV and UD are. But these are not available to foreigners. And of the PT you’d need a special version, the PT PMA. See here for instance:


Nope, it’s not a common practice here to buy and sell companies. Only in the horeca (restaurant) business it is quite common. They build up the hype and after 6 months to 1 year when the clientele starts to wind down, they sell the business. I’ve never seen that being successful for the acquiring party btw.
 

Daniel Gomez

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Joined
Jul 25, 2019
Messages
38
Thank you jstar. Would you kindly take a look at the link below. I'm a little confused about the information I have been getting. Im aware that for foreigners PT PMA is the main stream. So is that all our options ? We arnt to open just a local business ? regardless of our visa status ?

 

snpark

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Sep 30, 2016
Messages
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I would be wary of ever trusting such articles and companies that charge fees for you to open companies etc here especially when they are not even based in the same country.
Just go to the official government website for exact rules and costs

Then in country get a recommended agent to help or your Indonesian sponsor / partner
 

R Cameron

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Jul 19, 2016
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1,151
Thank you jstar. Would you kindly take a look at the link below. I'm a little confused about the information I have been getting. Im aware that for foreigners PT PMA is the main stream. So is that all our options ? We arnt to open just a local business ? regardless of our visa status ?

That website gets more wrong than it gets right, I advise disregarding everything they say about Indonesia. Look for an Indonesia based consultancy to get accurate information, for instance https://www.cekindo.com/
 

snpark

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Cager
Joined
Sep 30, 2016
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3,261
cek indo has a bad rep, several people have spent a lot with them and got nothing back

Dont trust a bule run company with big fancy offices
Why you think they charging you so much? So he can get $10,000 a month salary and have 50th floor corner office just to do the same as my agent on a w/a and 750rb lol
"Pak come to Imigrasi next Thursday at 11a.m"
 

jstar

Mr. 10,000
Joined
Jul 31, 2016
Messages
4,415
Thank you jstar. Would you kindly take a look at the link below. I'm a little confused about the information I have been getting. Im aware that for foreigners PT PMA is the main stream. So is that all our options ? We arnt to open just a local business ? regardless of our visa status ?

Well, with everything here, including purchase of land, you can circumvent the existing laws and get it done by a nominee system.

That means you use an Indonesian citizen (WNI) and everything is done in her/his name. So they own the business. The idea is that by creating solid contracts and all kinds of rental/lease and sales approval agreements you (try to) make sure there is no way they can screw you and walk away with the ownership and money.

There are enough agents and law firms perfectly willing to help you with such an endeavor and who claim it is watertight. But whatever they say, it stays risky. Not only about money and trustworthiness, also because one moment in time the government becomes keen to close these loopholes (after officials have made a lot of money in ‘dealing‘ with borderline cases). Or they make a nice “you see we take action?” case out of you what we see from time to time in the nominee system.

Now I have been involved in doing business with the family-in-law concerning restaurants, interior design & furniture and even a gas station, and I can say the experience was not really wholeheartedly positive. Very often the mentality has been rather ‘american’ which means for me “ah it didn’t work it’s a shame okay next!”. And then they make the same mistakes all over again. Sorry for the stereotyping. Currently I only trust my spouse.
 

Daniel Gomez

Well-Known Member
Joined
Jul 25, 2019
Messages
38
My spouse is an Indonesian citizen :)
But the business is between my friend and I. He is from Malaysia. I like to do everything according to the law.
So whatever is legal is fair game :)
Thank you for all the info, really helpful.
 

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