Indonesia Company Formation @ Asia Business Set Up

Indonesia Company Formation

Indonesia company formation is a legitimate way for international entrepreneurs to conduct business in Indonesia and throughout the Association of South East Asian Nations (ASEAN) countries. The country is rich in natural resources and, with gross domestic product (GDP) to grow at 6.5% in 2007 on the back of consumer demand, it has a potentially lucrative local market. The following information will help you determine whether Indonesia company formation is the optimum corporate structure to fulfil your objectives:

An Indonesian company can be 100% foreign-owned and controlled. A representative office can also be 100% foreign-owned and controlled, but is not permitted to make direct sales in Indonesia.

An Indonesia Joint Venture is an ideal way for foreign companies to acquire local market knowledge and skills through an Indonesian partner.

Indonesia company formation allows entrepreneurs to access to a network of double taxation treaties with countries including Australia, France, Germany, Singapore, South Africa, the US and the UK.

An Indonesian nominee trading company is a legal way for foreign investors to purchase Indonesian property.

The Indonesian economy is positively ranked as the 50th-most competitive economy in the world, according to an economic competitiveness report by the World Economic Forum.

Indonesia company formation is hampered by foreign investment restrictions, erratic law enforcement, uncertain government costs and a lack of regulatory transparency. In terms of the ease of doing business, Indonesia is poorly ranked at 129th according to the 2008 Doing Business Survey by the World Bank. The survey measures factors including business start up procedures, time, cost and minimum capital required to start a business.

Indonesia poorly ranks as the 126th least corrupt country in the world, according to the 2008 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians.

An Indonesian company is liable to pay a corporation tax of 30% on income sourced in Indonesia and internationally. Capital gains are taxed at up to 30%. Additionally, Indonesia is positively ranked as the world's 119th freest economy in the Heritage Organisation’s 2008 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets.

With the exception of a representative office, a minimum of two shareholders and directors is required to complete Indonesia company formation. The shareholders and directors details are available on a public register.

An Indonesia Joint Venture company requires an Indonesian citizen to hold a share of at least 5% in the Company.

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Following Indonesia company formation, most entities are required to submit an annual tax return and audited financial statements.

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An Indonesian representative office is not allowed to make sales and issue Bills of Lading.

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Indonesia remains blacklisted by the Financial Action Task Force (FATF) on Money Laundering, making it difficult to open corporate bank accounts following Indonesia company formation.

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Indonesia is poorly ranked as the world's 54th most competitive economy in the World Bank's Global Competitiveness Report 2007-2008.

Other Information
Refer to the following links to read more about forming a company in Indonesia:

Contact Us
For more information on Indonesia company formation, email email@healyconsultants.com or call us in Singapore at (+65) 6735 0120.
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