HOW TO START A BUSINESS IN INDONESIA (pt 2)

Summary

In this second part of the series on setting up a business in Indonesia, Sachin Thien Olsen addresses key aspects for foreign investors, including establishing a PT PMA or PT PMDN, navigating permits, and utilizing Joint Venture Companies (JVCs) and profit-sharing agreements with local partners. The video emphasizes the importance of compliance with Indonesian regulations and highlights the anticipated benefits of the upcoming Omnibus Law, aimed at simplifying investment processes. Viewers are encouraged to seek trustworthy advice and engage with the channel for further questions about real estate, tourism, and legal matters.

Takeaways

• 😀 Establishing a business in Indonesia requires understanding the types of business entities available, such as PT PMA and PT PMDN.
• 📝 It's crucial for foreign investors to obtain the correct permits to operate legally in Indonesia as either an investor or a working director.
• 🤝 Joint ventures (JVs) with local partners are a common strategy for foreign investors to manage assets and comply with regulations.
• 💰 Profit share agreements allow foreign investors to collaborate with locals, providing capital in exchange for shares and operational roles.
• ⚖️ Legal compliance is vital; investors should seek trustworthy legal advice to navigate Indonesia's complex corporate laws.
• 📊 The negative investments list outlines industries where foreign investment is restricted, influencing business decisions.
• 🏢 Many successful companies in Indonesia began as PT PMDN entities and later upgraded to PT PMA structures as they grew.
• 🔍 The Omnibus law is set to simplify investment processes and regulations, making it easier to establish businesses in Indonesia.
• ❗ Renting properties in the name of locals to bypass regulations can lead to legal issues; proper structures must be adhered to.
• 💬 Engaging with experts and resources can help foreign investors devise effective investment strategies tailored to their needs.

Q & A

What is the focus of the video?

The video focuses on the basics of setting up a business in Indonesia, specifically for foreign investors, covering permits, joint ventures, and profit-sharing agreements.

What types of business entities can foreigners establish in Indonesia?

Foreigners can establish a PT PMA (foreign investment company) or a PT PMDN (domestic investment company) to operate businesses in Indonesia.

What is a negative investment list?

The negative investment list outlines sectors where foreign investment is restricted or prohibited, influencing the types of businesses foreigners can set up in Indonesia.

What permits do foreign investors need to operate in Indonesia?

Foreign investors need to obtain permits for residency and work, which may include permits as an investor or a full-time working director.

How do joint ventures benefit foreign investors?

Joint ventures allow foreign investors to partner with local companies, enabling them to navigate regulatory requirements and share resources effectively.

What is a PT PMDN structure?

A PT PMDN structure is a local investment company where all shareholders must be Indonesian locals, which simplifies permit compliance for large investors.

What are profit-sharing agreements?

Profit-sharing agreements are arrangements where foreign investors collaborate with local partners, allowing them to provide capital while sharing profits based on agreed terms.

What is the risk of using a nominee structure in Indonesia?

Using a nominee structure, where foreigners operate businesses in the name of locals, poses legal risks and may lead to conflicts with tax obligations.

What sectors are popular for foreign investment in Indonesia?

Popular sectors for foreign investment include restaurants, hotels, fashion, jewelry, and coffee shops.

What is the Omnibus Law, and how does it impact business setup?

The Omnibus Law is a new regulation aimed at simplifying the process for foreign investors to establish companies in Indonesia, making it easier to obtain necessary permits.