How to Complete Local Company Registration (PT PMDN) in Indonesia

The Perseroan Terbatas (PT) remains the most popular legal business structure in Indonesia for local entrepreneurs. As the economy grows and regulatory reforms like OSS RBA (Online Single Submission – Risk-Based Approach) make compliance easier, registering a local company is not just about legality, but also about positioning your business for funding, partnerships, and long-term sustainability.

This step-by-step guide walks you through the process of local company registration in Indonesia under the 2025 regulations, helping business owners and legal officers minimize risk and delays.

What Is a Local Company (PMDN)?

A PT PMDN is a limited liability company established entirely by Indonesian citizens or Indonesian legal entities. PMDN itself means Domestic Capital Investment (Penanaman Modal Dalam Negeri).

It has its legal standing, enabling it to enter into contracts, own assets, open bank accounts, and be held responsible independently from its shareholders.

Who Can Register a Local Company?

Based on Law No. 40 Year 2007 on Limited Liability Companies, which regulates the establishment, governance, duties, rights, and responsibilities of companies in Indonesia. The law contains principles of good corporate governance, limited liability of shareholders to the capital, and the establishment of corporate organs.

• Shareholders: A minimum of two shareholders is required. These can be individuals or Indonesian legal entities. Each shareholder must commit a portion of capital, which will be reflected in the company’s Articles of Association (AOA). The shareholding structure must comply with Indonesian nationality rules, meaning no foreign ownership is permitted under this category.
• Company Organs: At least one Director and one Commissioner must be appointed. The Director is responsible for daily operations and legal representation, while the Commissioner serves as a supervisory figure. Both roles must be held by individuals (not corporate entities), and must be Indonesian citizens for a PT Lokal.
• Business Address: The company must have a physical office address in a commercially zoned location. This is necessary to obtain a KKKPR (Konfirmasi Kesesuaian Kegiatan Pemanfaatan Ruang), which is generated automatically in OSS.
• Permitted Business Activities: The company must register business activities using KBLI codes (Klasifikasi Baku Lapangan Usaha Indonesia). These codes determine licensing requirements and risk categorization under the OSS system.

Meanwhile, Government Regulation No. 5 of 2021 regulates the company registration process to be more transparent in compliance procedures. This regulation introduces a risk-based licensing model through the OSS system, replacing the traditional sector-by-sector approval process. Businesses are categorized by risk level (low, medium, high), which then determines the type of licensing required (e.g., NIB only, NIB + standard certificate, or full license).

Step-by-Step Guide to PT Registration in Indonesia

1. Draft a Notary’s Article of Incorporation

The process begins by reserving a company name through the Ministry of Law and Human Rights’ AHU Online system. The name must be unique and not previously registered by another entity.

It should not include foreign-sounding terms unless special approval is obtained. Alongside this, founders must agree on the company structure, including shareholder shares, director and commissioner appointments, and registered capital.

2. Approval by the Ministry of Law and Human Rights

Once the structure is confirmed, a notary public will draft the Deed of Establishment, which includes the Articles of Association (AOA) of the company. This document outlines the company’s purpose, capital structure, shareholders, and internal governance.

After signing, the notary submits it electronically for legalization to the Ministry of Law and Human Rights, which will issue the SK Kemenkumham.

3. Register NPWP (Company tax identification number)

With the decree in hand, the company must register through the OSS RBA platform. Here, you’ll input the company’s information and business activity codes (KBLI). The system will automatically generate a NIB (Nomor Induk Berusaha), which serves as the company’s unique ID, business license, and import-export permit (if applicable).

For low-risk businesses, this step may complete your licensing obligations.

4. Register OSS to obtain KKKPR and NIB

A domicile letter (Surat Keterangan Domisili) is required to confirm the physical location of the business. This can be obtained either from the local district office (kelurahan/kecamatan) or a certified office space provider, especially if the business is based in a commercial tower or virtual office setup.

This document is essential for both OSS registration and tax purposes.

5. Open the bank account 

The company must be registered with the Directorate General of Taxes (DGT) to obtain a Tax Identification Number (NPWP). If the business expects revenue above IDR 4.8 billion annually or deals with VAT-liable goods/services, it must also apply for PKP (Pengusaha Kena Pajak) status.

Registration is now mostly digital via DJP Online.

6. Register with BPJS (Social Security)

To hire employees, the company must register for BPJS Kesehatan (Health) and BPJS Ketenagakerjaan (Employment).

This is not only a legal requirement but also a prerequisite for issuing employment contracts and processing payroll deductions. Penalties apply for non-compliance or late registration.

7. Apply for Sectoral Licenses (if required)

If the business operates in a regulated sector such as food & beverage, education, finance, logistics, or construction, additional licenses from respective ministries (e.g., BPOM, Ministry of Health, Ministry of Public Works) are required. The OSS system will notify you if sectoral licenses are applicable based on your KBLI selection.

Registering a local company (PMDN) in Indonesia involves more than just filling out forms — it requires a structured approach, legal precision, and a solid understanding of regulations like OSS and the Company Law.

With the right preparation and compliance steps, entrepreneurs can operate confidently while minimizing regulatory friction.