Doing Business in Indonesia: The Order of Steps for Gulf Companies
Indonesia rewards a Gulf company that settles its structure, its licence and its reporting before it settles its market plan.
Indonesia has the largest Muslim population in the world, and Gulf businesses look at it for good reasons. When a company from the region asks me where to begin, my answer is the same each time: decide what you need on the ground first, because Indonesian rules follow the structure you choose, not the size of your ambition.
1. Decide What You Actually Need in Indonesia
There are four common ways in, and they are not interchangeable.
Sell from abroad. Your buyer imports and deals with the formalities. You keep no presence, but you also keep no control over the market.
A representative office. A foreign company’s office can supervise, liaise and prepare the setting up of a company. It may not earn income from Indonesian sources, and a trading company’s representative office may not trade.
An employer of record. An Indonesian company becomes the legal employer of your staff while you direct their work. You need no company of your own, and a local hire can usually start within a week. It gives you people, not a business.
Your own company, a PT PMA. A foreign-owned limited company can employ, trade and invoice in its own name and holds its business licences directly.
Choose by what you need to do. If you only need someone on the ground to test the market, the first three routes need no company of your own. If you need to sign contracts and earn revenue in Indonesia, you need the fourth.
2. If You Form a Company, Check the Business Field and the Capital
Foreign ownership can reach 100%, depending on the activity. Every business field is open to investment except those closed to it or reserved to central government, and the field is checked when the company registers. So the first piece of work is to describe what the company will actually do, in the terms the system uses.
The capital rule has two parts. The investment plan must exceed IDR 10 billion for each business line at each location. Separately, the company as a whole must have issued and paid-up capital of at least IDR 2.5 billion. Plan for both figures from the start, because they shape the business plan, the deed and the bank account.
3. Your Activity Decides Your License
Each activity carries a business classification code. The government’s online licensing system reads those codes, registers the business and issues its business identification number (NIB). The code and the size of the business then set a risk level, and the risk level sets the licence: for some activities the NIB alone, for others the NIB plus a permit. The activity description therefore deserves care.
4. Halal is a Legal Duty, with Dates
Halal will be familiar to a Gulf reader, but the Indonesian rule is specific. Halal certification is a legal duty, not a marketing choice: a product sold in Indonesia must be certified on a timetable set by product type and business size. Under the latest amendment, which came into force on 14 October 2026, micro and small food and drink businesses have until 17 October 2028. Food and drink made abroad come under the duty from 18 October 2028. Cosmetics, herbal medicines, supplements and many household goods share the 17 October 2028 date. A two-year runway sounds generous, but for food it is one requirement alongside product registration and the label, so I would start now.
5. Reporting Starts on Day One
Reporting does not wait for the first sale.
• Investment reports. Every PT PMA counts as a large business, so every PT PMA files its investment activity report (LKPM) quarterly, including while it is still preparing to operate.
• Corporate tax. The ordinary rate is 22%.
• Payroll. Each new employee is registered with both social security bodies (BPJS) within 30 days of starting. The employer withholds income tax from monthly pay, pays it by the 15th of the following month and files the return by the 20th.
None of this is difficult. It is simply continuous, and a company that sets up its accounting and payroll properly in the first month avoids a backlog that is far harder to clear later.
6. Bringing Your Own Managers
If a Gulf company wants its own people in charge at first, the rules are clear. Unless an exemption applies, such as for a director or commissioner with a shareholding, the employer needs an approved plan for foreign workers (RPTKA), which leads to the work visa and the stay permit. The company also pays US$100 a month for each foreign worker. The permit belongs in the timetable from the beginning, not after the flights are booked.
My Advices
- Decide whether you need people, a presence or a business, before you decide anything else.
- If it is a business, check the activity and plan both capital figures together.
- Put halal, licensing and reporting dates into the plan as fixed costs, not afterthoughts.
- Start the work permits for your own managers first.
Taken in this order, each step is an ordinary one, and nothing arrives as a surprise after money has been committed.
