PT vs CV: Which Is the Right Legal Business Structure in Indonesia?

For new entrepreneurs in Indonesia, deciding on a legal business structure is one of the first and most important steps. The two most common options are PT (Limited Liability Company) and CV (Limited Partnership). While both allow you to register and run a business, they differ significantly in legal status, liability, taxation, and eligibility for licenses.

If you’re planning to register an LLC in Indonesia, it’s critical to understand whether a PT or CV fits your goals. This guide will help you compare both and choose wisely.

What Is a PT?

Perseroan Terbatas (PT) is a company with limited liability and is the most formalized business structure in Indonesia. It is regulated by Law No. 40 of 2007 and Business Hub Asia has summarized how to complete local company registration in Indonesia.

What Is a CV (Commanditaire Vennootschap)?

A CV is a limited partnership that does not have legal entity status separate from its founders. It consists of:

• Active partners (who manage operations and are personally liable)
• Silent partners (who invest capital but do not manage)

CVs are governed under the Indonesian Civil Code (KUHPerdata), not company law, making them simpler but less structured than PTs.

Key Characteristics of CV:

• No need for legal entity approval (e.g., no SK Kemenkumham)
• Registered through a notary, NPWP and local OSS for NIB. Approval by the Ministry of Law (Permenkumham No 17 year 2018)
• Cannot receive foreign investment
• More flexible for micro/small-scale businesses

Risks of Using a CV as Legal Business Structure

Although a CV offers flexibility and ease of setup, it comes with several legal and operational risks that must be carefully considered:

• Unlimited Personal Liability for Active Partners

Unlike a PT, a CV does not provide limited liability protection. This means that active partners are personally responsible for the company’s debts and obligations. If the business incurs losses or legal claims, the personal assets of these partners — such as vehicles, savings, or property — can be seized to pay off creditors. This risk is particularly critical for businesses operating in industries prone to litigation or financial volatility.

• Lower Credibility in the Eyes of Financial Institutions and Investors

CVs are not recognized as separate legal entities under Indonesian law. As a result, banks and investors often view them as less credible or formal than PTs. This can create obstacles when applying for business loans, seeking investment, or joining procurement processes with large corporations or government institutions.

• Limited Access to Business Licenses

A CV cannot obtain many types of business licenses, especially those in regulated sectors like import-export, construction, financial, or pharmaceuticals, and the most prohibited sectors are financial, mining, energy, and infrastructure.

How to Decide: Which Entity Should You Register?

Choose PT if:

• You want to limit your liability in case of business failure or debts
• You plan to scale up, raise capital, or work with formal institutions (banks, investors)
• Your business requires sectoral licenses (e.g., fintech, mining, and energy)
• You aim to work with government agencies or large corporations

PTs are more suitable for serious, growth-oriented businesses and are now easier to register with the OSS RBA system.

Choose CV if:

• You are launching a family-run or small-scale business
• You prefer lower initial costs and documentation
• Your operations are in low or medium-risk business activity.
• You accept personal legal responsibility for the business

CVs are ideal for quick-start, low-complexity businesses, but have limitations for scaling or fundraising.

The choice between PT and CV is not only a legal decision but a strategic one. If you’re thinking big and want legal certainty, go for a PT. If you’re testing ideas or running a small, family-owned venture, a CV might suffice.