As in any country, even in your own, setting up a business can be a complex process, especially if it's done within an unfamiliar legal framework and in a language you don't understand. Difficulties are to be expected, and no one promises it will be easy.
The real question is the extent of these difficulties in terms of time and cost to overcome them. In Indonesia, you can register two types of companies that meet the requirements for foreign business organization:
- PT - a company with Indonesian capital organized in the name of an Indonesian citizen. (Nominal, a foreigner can be appointed as the real director). This type of company can engage in almost any type of activity and can obtain work visas for foreigners. The tax rate for such a company is 10%.
- A foreign-owned company organized in the name of a citizen of another country. The working scheme is similar to the first case, with different titles for the same roles. It is necessary to hire an Indonesian for the position of director to ensure compliance with all formalities in all areas of activity and bureaucratic decisions. Work visas (KITAS) are easier to obtain for this type of company, and there is no quota on them. However, this type of organization has restrictions in certain sectors such as banking, nuclear industry, and similar fields. The tax rate for such a company is 30%.
The choice of which type of company to register will depend on your Indonesian partner, as well as the recommendations of your lawyer. Both options are roughly equivalent, and the decision ultimately depends on your goals, objectives, needs, and capabilities. The specific decision is made during the actual process.
There is also a third option - establishing a regular company with an Indonesian owner. However, this option is less suitable, as it is not possible to obtain a work visa for a foreigner through such a company, making working with it semi-legal.