The Dangers of a Dormant Company in Indonesia

A young entrepreneur from Europe moved to Bali with the idea of establishing a foothold. He had neither a real business nor a developed plan — but he had friends who were already obtaining a KITAS by opening a PT PMA and were saying how simple it was.

He registered a company, deposited the minimum 'investment' capital into an account, submitted documents for the visa, and received the coveted investor KITAS. However, the business development never started.

"It's just a way to stay on the island," that's how he perceived his company.

After a few months, immigration and labor authorities took an interest in him. The trigger was a basic check for fake investor visas. Such immigration raids have become more frequent over the last year.

What the inspection showed:

▪️ Lack of real activity

▪️ No tax or insurance contributions were made

▪️ No business correspondence, invoices, or orders

▪️ Zero financial reporting for several quarters

This led to the company being deemed fictitious, and the KITAS obtained on its basis to be invalid.

— Recognition of the company as fictitious

— Revocation of all licenses, annulment of the KITAS

— Interrogations, deportation, and a ban on entering the country

In recent years, the immigration and tax authorities of Indonesia have increasingly been checking companies opened by foreigners. Special attention is paid to those with no turnover, zero reporting, no staff, and no activity under the declared KBLI codes.

A formal approach can lead to real problems. Even if your visa is approved, it doesn't mean no one will check how your company operates.

There are now legal and simpler ways to stay in Indonesia without creating fictitious structures:

Remote worker KITAS — an official residence permit for 1 year without extensions and visa runs

Visa D12 — can be issued for 1 or 2 years

Family KITAS — for spouses and children

Obtaining an investor KITAS is only justified if you are ready to conduct business in Indonesia: hire staff, submit reports, pay taxes, and comply with regulations.

Otherwise, it's better to choose another path. A legal, straightforward, and safe one.

We help not only with arranging legal and safe options for staying but also with:

Contact us if you are unsure whether your current status is suitable for you — we will help you avoid problems and choose the optimal path.

Telegram - @legalindonesia / @LegalIndonesiaBot

WhatsApp - https://wa.me/628179677771