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Foreign Investment and Company Establishment

Ever since Indonesia's independence, foreign companies have made major investments in Indonesia to develop its resources, build infrastructure, establish manufacturing facilities for export and/or provide products and services for the domestic market. The intricacies of setting up a company and making an investment in Indonesia are many. This article will serve as but a brief introduction to the topic.

Setting up Business Activities and a Company in Indonesia

To establish a business in Indonesia, if you do not require a local legal entity for the investment proposed, you could choose to appoint an Agent or Distributor, or set up a Representative Office. Many foreign investors at the early stage of entering the Indonesia market choose to set up an Agency Agreement or Representative Office, then later after the business starts to grow they will apply for a Foreign Direct Investment Company (FDI) status.

This is referred to most commonly in Indonesia by its Indonesian acronym PMA, or Penanaman Modal Asing.

Representative Office

A Representative Office can be established depending upon the line of business and the necessary licenses issued by the related government department. The limitation of a Representative Office is that they are not allowed to conduct direct sales and cannot issue Bills of Lading.

Representative offices are set up primarily for marketing, market research, or as buying or selling agents. The related government ministries are:

• Representative Office from Ministry of Industry & Trade - for bilateral trade
• Representative Office from Ministry of Public Work - for consultant or contractor
• Representative Office from Ministry of Mining - for mining activities
• Representative Office from Ministry of Finance - for banking
• Representative Office from Ministry of Trading - for trading
• Representative Office from Investment Board (BKPM) - regional representative

Limited Liability Company or Perusahaan Terbatas (PT)

Foreign Direct Investment, most often referred to by its Indonesian abbreviation PMA, is governed primarily by the Foreign Capital Investment Law No. 25 of 2007. As a legal basis, the law is fairly accommodative to various deregulatory policies and measures to date, and those that will be taken by the government in the foreseeable future.

In addition to Investment Law No. 25/2007, PMA companies as well as other companies in their business operations are still subject to sector/industrial policies as required by corresponding ministries.

Incorporation of PMA Company

The Investment Coordinating Board (BKPM), the government body which processes and handles FDI companies, issued an important deregulation package on PMA in 2010 referred to as Presidential Decree No. 39 year 2014. It was seen as a very significant step toward a much more conducive and attractive investment environment in Indonesia. Some highlights of the new regulation:

• Allows 100% FDI investment in selected areas of business
• Limits foreign direct investment to 95%, with a minimum of 5% ownership by an Indonesian
• Allows FDI investment with certain conditions
• Stipulates the sectors which are closed to FDI investment (Negative List)

You can obtain a copy of the FDI application sin English from Indonesian embassies overseas or from Investment Coordinating Board office - either from the head office in Jakarta or from regional offices in the provinces.

The amount of capital to be invested in a foreign-owned company is decided by the investing parties themselves, and the BKPM approval is based on the economics and scale of the project. Foreign investment companies are basically free to choose where in Indonesia they will set up operations, with the proviso that factories must be in areas zoned for industry or in an industrial estate.

The life of foreign investment companies has been extended by allowing the renewal of the fixed/permanent operating license (IUT) for an additional 30 years. The process of incorporation of a new foreign direct investment company:

License will be valid for 3 years

Step 1:

Obtain the standard form of the company deed; arrange for a notary electronically; obtain clearance for the Indonesian company's name at the Ministry of Law and Human Rights.

The uniqueness of the company name (should use 3 words) must be checked to ensure that it has not been used by another Indonesian company, to avoid rejection by the Ministry of Justice and Human Rights of the company's deed of establishment and articles of association. Because the process must be done through a computerized processing system, the reservation and clearance must be done by a notary public (because the new computerized system for non-tax state revenue payments may be accessed only by a notary public). The reserved name will be blocked for 60 days. If the founding shareholders are confident that the same name has not been used by another Indonesian company, this procedure is not necessary.

Under Article 16 of Law No. 40 of 2007, Limited Liability Companies Companies may not use names which:

a. have been legally used by another Company or are in principle the same as the name of another Company;

b. conflict with public order and/or morality;

c. are the same as or similar to names of state institutions, government institutions, or international institutions, except with the permission of those concerned;

d. are not in accordance with the purpose and objective as well as business activities or only show the purpose and objective of the Company without its own name;

e. consist of figures or series of figures, characters or series of characters which do not form words.

f. have the meaning as Company, legal entity, or civil association

(2) The name of the Company must be preceded by the phrase “Perseroan Terbatas” (Limited Liability Company) or the abbreviation “PT”.

(3) In the case of a Public Company (Perseroan Terbuka), apart from the provisions referred to in paragraph (2) being applicable, the abbreviation “Tbk” shall be added at the end of the Company’s name.

(4) Further provisions regarding the procedures for the use of Company names shall be stipulated by Government Regulation.

The Ministry of Law and Human Rights may reject a name application reservation if the requested name is, among others, the same as or resembles the name of other companies.

Government Regulation No. 43 of 2011 on Use of Names of Limited Liability Companies also provides that an application to use a name that is the same as or similar to a well known trademark shall be rejected unless approval is obtained from the holder of the trademark.

Step 2:

• Prepare and send the application with required documentation, compiled according to the investment plan (production chart for industry or description of the activity for services) and the planned use of business capital.
• Set up a joint venture agreement if you are making the investment with Indonesian partners. For a consulting services company you are required make a presentation to the leadership of BKPM before applying for a Principle License.
• Foreign Investment Regulations in accordance with the Head of BKPM Rule No. 5 year 2013, unless otherwise specified by legislation, must adhere to the following conditions:
  
  
  1. Total investment value greater than Rp 10,000,000,000 (ten billion rupiah) or its equivalent value in US dollars, excluding land and buildings;
  2. Equity and paid up of shares equal to the value of paid-up capital of at least Rp 2.500.000.000 (two billion five hundred million Rupiah) or its equivalent value in US dollars,
  3. inclusion in the company's capital, for each shareholders at least Rp 10,000,000 (ten million Rupiah) or its equivalent value in US dollars and percentage shareholding is calculated based on the value of nomimal shares.

Step 3:

Obtain the Principle License (Izin Prinsip), valid a maximum of three (3) years from the date of issuance of the principle license, except for certain sectors which require a longer project completion time and may be given an extension in accordance with an applicable period prior to giving permission.

Step 4: Incorporation of Izin Prinsip BKPM

1. Establish Articles of Association with a Public Notary detailing proof of capital investment, and send it to the Ministry of Justice for approval and issuance in the State Gazette
2. Registration of company address with local council (domicile). It should be in an office building or busines area/district.
3. President Director's personal Tax Identity Number (NPWP)
4. Obtain a company taxpayer registration number (NPWP) and a VAT collector number (NPPKP)
5. Registration with the Department of Industry and Trade (TDP)

Step 5: Apply for the Workers Social Security Program (BPJS Program)

According to legal provisions on workers’ social security (Manpower Minister Regulation 12/MEN/VI/2007), it is mandatory for every company to apply for the Workers Social Security Program (BPJS), operated by the executing agency. This social security program covers occupational accident security, death security, old age security, and health maintenance.

Fixed Operating License (IUT) - 30 years (Updated December 2015)

Step 1:

Prepare and send the 3-month report (LKPM) of the last period to the BKPM office as well as UUG (HO) nuisance act and enviromental management (SPPL/ UKL-UPL/Amdal) to BKPM and required financial audits for several businesses, if necessary.

Step 2: Fixed Operating License (IUT) for 30 years is issued

A Limited Liability company is established either under foreign shareholders or through a joint venture with Indonesians or wholly owned by Indonesian shareholders and must be approved by the Ministry of Justice. It doesn't matter who is the owner of an Indonesian Limited Liability company, they must comply with Indonesian law and are considered an Indonesian company and the company can subsequently be changed or sold to the shareholders, foreign or Indonesian.

Taxation and Labor Law

Another important matter is the Taxation and Labor Law. It is compulsory to report taxes on a monthly basis and follow Indonesian labor law.

As you can see from this very brief introduction, the process is a complicated and lengthy one and can be a virtual mine field for those who are unfamiliar with dealing with Indonesian ministries. Because of this, many foreign companies choose to acquire the advisory services of a professional investment consultant which specializes in assisting foreign companies who want to establish businesses in Indonesia

Sources: expat.co.id 

INDONESIA SEA HIGHWAY

INDONESIA'S SEA HIGHWAY

Sea highway can also be considered as organizing maritime transportation regularly connecting hub ports from western to eastern Indonesia and vice versa using big vessels. The hub ports are supported by smaller ports which act as feeders.

100 TEUS TOL LAUT VESSEL

Sea highway aims to save maritime trade route and ease connectivity so it will bring great economic benefits.

Without sea highway, so far our logistic cost is very high. Currently, national logistic cost reaches 25% from gross domestic product (GDP) or twice higher than in neighboring countries.  Imagine,  20-feet   container  shipping   cost   from  Jakarta   to   Jayapura  is IDR 25 million.  Meanwhile,  similar   shipping  from    Jakarta  to   Shanghai,  China  only costs IDR 4.5 million.

With sea highway and the improvement of road infrastructures, the government targets to lower logistic cost ratio to 19.2 percent in the next five years.

Moreover, the existence of sea highway is expected to reduce economic development imbalance between the advanced western Indonesia and the disadvantaged eastern Indonesia.

According to National Development Planning Agency (Bappenas)’s data, sea highway will be supported by 24 ports comprising 5 hub ports and 19 feeder ports.

Five hub ports are Belawan/Kuala Tanjung in Medan, North Sumatra; Tanjung Priok/Kali Baru in Jakarta; Tanjung Perak in Surabaya, East Java; Makassar in South Sulawesi; and Bitung in North Sulawesi.

Meanwhile 19 feeder ports are Malahayati Port (Aceh), Batu Ampar Port (Batam), Telur Bayur Port (Padang), Jambi Port, Palembang Port, Panjang Port (Lampung), Tanjung Emas Port (Semarang), Pontianak Port, Sampit Port, Banjarmasin Port, Karingau Port (Balikpapan), Palaran Port (Samarinda), Pantoloan Port (Central Sulawesi), Kendari Port, Tenau Kupang Port, Ternate Port, Jayapura Port, Ambon Port, and Sorong Port.

In sea highway concept, big vessels will regularly sail round trip from Belawan Port in western Indonesia to Bitung Port in eastern Indonesia.

Sea highway routes are Belawan – Tanjung Priok – Tanjung Perak – Makassar – Bitung. The trip from one hub port to another takes 2 to 3 days.

Nineteen ports are the feeders for 5 hub ports. The ports of Malahayati, Teluk Bayur, Batu Ampar, and Jambi will be the feeders for Belawan Port using smaller vessels.

Meanwhile, the ports of Palembang, Panjang, Pontianak, and Tanjung Mas will be the feeders for Tanjung Priok Port. On the other hand, the ports of Sampit, Banjarmasin, Karingau, and Tanjung Mas are the feeders for Tanjung Perak Port.

Makassar hub port’s feeders are the ports of Palaran, Pantoloan, Kendari, and Tenau. Meanwhile, Bitung Port’s feeders are the ports of Ternate, Ambon, Sorong, and Jayapura.

Feeder vessels will go round trip from a feeder port to a hub port with higher frequency than now so commodity shipping will run more quickly.

Budget

To optimize sea highway’s operation, the 24 ports must be revitalized and their capacities must be improved.

According to Bappenas’ study, the total budget for land acquisition, dredging, and container terminal development of the 24 ports is IDR 243.69 trillion.

The budget will come from state budget (APBN), local budget (APBD), state-owned port enterprises, and investors. APBN budget will be distributed through Transportation Ministry. Moreover, APBN will also be disbursed in form of State Capital Injection (PMN) to state-owned port enterprise PT Pelabuhan Indonesia (Pelindo) IV. State-owned port enterprises will be responsible to the ports under their management.

In 2015-2019 National Mid-Term Development Plan (RPJMN), Transportation Ministry allocates IDR 101.13 trillion APBN budget for the next five years for maritime transportation management and operational programs.

In 2015 Revised State Budget (APBN-P), Transportation Ministry obtains IDR 20 trillion additional budget. From the number, IDR 11.93 trillion is used for sea highway development such as port development in 77 sea highway locations, port facility, Global Maritime Distress and Safety System, as well as Vessel Traffic Services.

The government also provides IDR 2 trillion PMN to Pelindo IV. Pelindo IV will use the budget to develop several ports such as Karingau, Pantoloan, Kendari, Ternate, Ambon, Sorong, and Jayapura.

The other state-owned port enterprises do not obtain PMN since they can obtain funding from internal budget or loan.

Most of the budget for the development of 24 sea highway-supporting ports will obviously come from private sector. Its financing scheme will use public-private partnership (PPP) scheme.

The budget from APBN and PMN is from the country’s capital. Therefore, its usage must be monitored so it will not be siphoned.

Connectivity

To improve connectivity and revitalize national logistic system thoroughly, sea highway must be supported by other infrastructures such as land road, river transportation, and train.

Moreover, maritime-related industries like shipping and shipyard industries must also be developed.

Therefore, the government also provides PMN to state-owned enterprises working on shipping and shipyard sectors. State-owned shipping enterprises obtaining PMN are PT ASDP of IDR 1 trillion, PT Pelni of IDR 500 billion, and PT Djakarta Lloyd of IDR 350 billion. Meanwhile,  state-owned  shipyard  enterprises  obtaining  PMN  are  PT  PAL Indonesia of IDR 1.5 trillion, PT Dok and Perkapalann Surabaya of IDR 200 billion, PT Dok dan Perkapalan Kodja Bahari of IDR 900 billion, and PT Industri Kapal Indonesia of IDR 200 billion.

With sea highway and comprehensive connectivity improvement, the government expects national logistic system will get better and logistic cost can be reduced significantly.

According to World Bank’s survey, Indonesia’s logistic performance Index (LPI) in 2014 is 3.1 placing 53rd position. Among ASEAN countries, Indonesia’s score and position is lower than Singapore, Malaysia, Thailand, and Vietnam.

Better and efficient national logistic system will boost economic growth so it can improve Indonesian people’s welfare.

Let’s support and monitor sea highway development so its benefits can be optimally used for people’s welfare.

DOING BUSINESS IN INDONESIA

DOING BUSINESS IN INDONESIA

A GUIDE TO DOING BUSINESS IN INDONESIA

INDONESIA is strategically based at the heart of Southeast Asia and provides a wealth of opportunity for foreign investors. Since the Asian financial crisis of 1997, Indonesia has bounced back as a vibrant and more diversified economy, resilient against the backdrop of an ever changing global landscape.

Indonesia is seeking to continually “move with times” and is embracing the changes taking place in the global trend towards a digital economy.

Incentives to domestic and foreign investors in this field, are being granted. Indonesia boasts a dynamic workforce that is competitive in the areas of cost and skills when compared to its peers.

We at BAJ welcome foreign investors to make investments in Indonesia and to use Indonesia as an integral part of their expansion plans in South East Asia. with experience leading the company and as a businessman in Indonesia, we have helped numerous foreign investors set up business in Indonesia. 

We hope this guide will provide the necessary insights into how you can make the best use of what Indonesia can offer to investors. This guide is intended to provide an overview of issues to consider when investing and doing business in Indonesiad, and is for general information purposes only. Applicability of the information to specific situations should be determined through consultation with your advisors at BAJ.

Welcome to Indonesia and. We welcome the opportunity for you to come and talk to us.

Aside from being a Business Advisor who provides consulting services, advice and support or how to start and expand a business, PT.BESTARI ANUGERAH JAYA also assist in the processing of Visas, Residence Permits, Work Permits and other licenses for Indonesia and some others Countries, such of ;

1. Swiss
2. China
3. Korea
4. Germany
5. Canada
6. England
7. Australia
8. Schengen
9. Jepang
10. etc.

Contact:

PT.Bestari Anugerah Jaya
Business Advisor Div.
+62 21 22464897
+62 21 29061640
+62 21 29844233
WA Only: 
+6281296911234

+62816781234

INDONESIA EASE OF DOING BUSINESS 2018

“Indonesia has shown progressive achievement in the past years.”

Ease of Doing Business Index is an index made by the World Bank to rank ease of doing business in a country. The Government of Indonesia is committed to improving existing services and governance and continuously improving every priority indicator.

READY STOCK NEW DRY & REFEER CONTAINERS

 READY STOCK NEW DRY & REFEER CONTAINERS TOL LAUT INDONESIA

READY STOCK NEW DRY & REFREGERATOR CONTAINERS

PT.BESTARI ANUGERAH JAYA & TOL LAUT INDONESIA turut berpartisipasi membantu pelaksanaan program Tol Laut Indonesia dalam pengadaan Machinery, Suku Cadang, Material Kapal Laut, Dry Cargo & Refrigerator Container, dll. 

PT.Bestari Anugerah Jaya

Orchard Square GOS C.02

Kelapa Hybrida Raya

Kelapa Gading, Jakarta Utara

Indonesia.

Office Phone: +62 21 29061640, 

Fax:+62 21 29844233 

email: sales@bejaya.com

www.bejaya.com

PROGRAM TOL LAUT INDONESIA

Ditjen Perhubungan Laut Kementerian Perhubungan Tahun ini meresmikan kapal Tol Laut berkapasitas 100 Teus di beberapa galangan.  Keseluruhan Kapal berjumlah 15 unit yang dipesan sejak tahun 2015.

Direktur Perkapalan dan Kepelautan (Dirkapel) Junaidi mewakili Dirjen Perhubungan Laut R Agus H Purnomo menyampaikan, Kapal ini akan mendukung konektivitas pelayaran dalam program Tol Laut, meningkatkan integrasi sistem angkutan untuk mengurangi disparitas harga. 

Dengan semakin banyak jumlah kapal kontainer maka diharapkan dapat membantu meningkatkan dan mendukung program Tol Laut yang akan berdampak pada penurunan biaya logistik.

Selain Tol Laut, Kemhub juga terus membangun kapal perintis untuk kebutuhan angkutan melalui laut di wilayah terluar, terdepan, terpencil, dan pedalaman yang belum memiliki akses darat maupun udara.

Diantaranya adalah kapal dengan 2.000GT (25 unit), 1.200GT (20 unit), 750 GT (lima unit), dan kapal angkutan ternak ( 5 unit).

Saat ini Ditjen Hubla telah menetapkan 15 trayek Tol Laut untuk mendukung penurunan disparitas harga antara wilayah Indonesia bagian Barat dengan Indonesia bagian Timur.

Di tahun 2018, anggaran yang disediakan untuk penyelenggaraan program tol laut Rp447.628.808.000 untuk 15 trayek yang disiapkan oleh Ditjen Hubla.

Dari 15 trayek yang disiapkan, delapan melalui penugasan dan tujuh trayek telah masuk proses lelang dan beberapa bulan lalu sudah ada pemenangnya.

Sebagai informasi, Pelaksanaan tol laut tahun 2018, Pemerintah memberikan penugasan kepada PT. Pelni untuk Trayek T-2, T-4, T6, T-13, T14 dan T15, ASDP untuk trayek T-1 dan T-3. Sedangkan perusahaan pelayaran swasta diberikan kesempatan untuk trayek T-5, T-7, T-8, T-9, T-10, T-11 dan T-12 melalui mekanisme pelelangan umum. 

CONTAINER CERIFICATE FOR KEMENTERIAN PERHUBUNGAN

BIC CODE: BAJU 

(BESTARI ANUGERAH JAYA-U) 

#Admin Bejaya  

PT.BESTARI ANUGERAH JAYA

MARINE, OFFSHORE & BUSINESS MANAGEMENT ADVISOR

PT.BESTARI ANUGERAH JAYA provides a variety of MARINE, OFFSHORE services designed to meet the specific needs of our customers and exceed expectations. To better serve our customers, we have assembled a team of highly qualified and experienced professionals who are dedicated to quality, efficiency, safety and environmental responsibility.

PT.BESTARI ANUGERAH JAYA specializes in providing topside, minor and major repair services and shipbuilding services including material,machinery and equipment procurement for marine and offshore industries. 

We offer to our customers a fast turnaround, high quality, flexibility and a very competitive price on all types of projects.

PT.BESTARI ANUGERAH JAYA  BUSINESS MANAGEMENT ADVISOR.

Our experts can assist with: Advice on the appropriate type of entity for doing business in Indonesia from the investment and company regulatory point of view

• -    Assist in subsidiary, representative office or branch incorporation, including further business expansion. This would include dealing with various government authorities for any licensing requirements.
• -        Assist in the merger and acquisition transaction of entities in Indonesia.
• -        Assist in winding up/liquidating business in Indonesia
• -     Corporate compliance and corporate secretarial services to comply with the prevailing regulations and corporate filing requirements to any relevant Government authorities
• -        Employment regulation advisory.
• -        Assisting in obtaining appropriate work and stay permits for expatriates

Management Service

• -         Manpower management services.
•        Hotel and tourism management services.
• -        Handling Services of foreigners and residence permit in Indonesia
• -        Other Management Services

 PT.BESTARI ANUGERAH JAYA

Office:

Orchard Square GOS/C.02

Hybrida Raya, North Jakarta

Indonesia, 14250

Phone: +62 21 29061640, +62 21 29844233

Fax : + 62 29844233

email: pt.baj1@gmail.com. sales@bejaya.com

WhatsApp/Line & Kakaotalk: 

+62 81296911234

+62 816781234