Indonesia “ It is obvious that Indonesia will become
an attractive destination for many foreign investors
”
establish a company without appearing in Indonesia, the process of obtaining powers of attor- ney from the investors will take a long time due to the requirements demanded by the prevailing laws and regulations of the Republic of Indonesia for the powers of attorney to be made in front of a notary and legalised in the Indonesian Embassy or Consulate located at the investor’s nation of origin. This process will approximately take four to six weeks, or even longer, depending on the investor’s nation of origin. The documents required for this process are: (i) copies of the deed of incorporation, articles of association, list of shareholders and other documents relating to the deed of incorporation; (ii) if the applicant is a company, a resolution of an extraordinary general meeting for shareholder approval, which states that all of the shareholders agree for the company to establish a company in Indonesia; (iii) a copy of passport of the president director of the company; and (iv) power of attorney if the application is not signed or applied for by the investor itself. After obtaining the approval from BKPM,
investors intending to establish a limited liability company in Indonesia must execute a deed of establishment in front a notary in Indonesia. After executing the deed, the notary must register it with the Ministry of Law and Human Rights to obtain legalisation or approval from the Minister of Law and Human Rights. The newly-established compa- ny (known as a PT PMA) must then register the company in the Company Registry at the Ministry of Trade, apply for a Letter of Domicile at the dis- trict area of the company domicile and apply for a Tax Payer Identification Number (Nomor Pokok Wajib Pajak or NPWP). A PT PMA is allowed to use foreign expatriates
by following the process of applying for the Plan to Utilize Expatriates (Rencana Penggunaan Tenaga
Kerja Asing or RPTKA) and Permit to Utilize Expatriates (Izin Menggunakan Tenaga Kerja Asing or IMTA) from the Ministry of Manpower and Transmigration. After the PT PMA has obtained the RPTKA, the expatriate must obtain Temporary Stay Permits and Work Visa Recommendation from the Ministry of Manpower and Transmigration before doing any work in Indonesia. There are limitations on the use of expa- triates, whereby they are only able to work in a spe- cific fields or areas. The Indonesian government also requires that a PT PMA must employ three local workers for each expatriate. To import capital goods or raw materials, a PT
PMA is required to obtain a supplier importer licence number (Angka Pengenal Impor Produsen, or API-P) from the BKPM. To import trade goods, it is required to obtain a general importer licence number (Angka Pengenal Impor Umum, or API-U). For imported production equipment, spare parts and raw materials that are not available in Indonesia, the BKPM may grant import duty reductions. The PT PMA must submit a master list application to the BKPM at the same time apply- ing for the initial BKPM approval to obtain the import duty reduction.
Positive attraction Despite many complications in its legal system, Indonesia is still attracting an abundance of foreign and domestic investors, allowing for a bright future for the nation’s economy. Indonesia will become a player in the future of international trade relations, with an abundance of natural resources where much of the world is running out. It is obvious that Indonesia will become an
attractive destination for many foreign investors. One would do well to keep an eye out for the little south-east nation in the near future.
About the author Stella Adhisurya Nataadmadja recently joined as an associate of Suria Nataadmadja & Associates. She assists partners in handling legal matters in the sectors of
commercial and business contracts, corporate law, banking, mining and investment.
Contact information
Stella Adhisurya Nataadmadja Suria Nataadmadja & Associates
The East Building, 12th Floor Jl. Lingkar Mega Kuningan Kav.
E.3.2.No.1, Jakarta 12950, Indonesia T. + 62 21 2554 2601 F. + 62 21 2554 2605 E.
suria@surialaw.com W:
www.surialaw.com
www.iflr.com
IFLR|FOREIGN DIRECT INVESTMENT 013
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