preparation for company establishment

Preparation for Company Establishment in Indonesia requires foreign entrepreneurs to understand the sort of business they want to do. All foreign entrepreneurs should conduct market research before pursuing their business in Indonesia. Every market has its characteristics and consumer behaviour and may not respond well to certain products and services. Many foreign entrepreneurs fail to conduct thorough market research and end up closing the company due to the lack of market interest.

Furthermore, entrepreneurs must keep in mind that the preparation for company establishment in Indonesia also requires them to understand the way of conduct in Indonesia. For instance, a notary is responsible for company establishment and document legalization. Experienced and certified notaries can give advice, consultation, and guideline for entrepreneurs to ensure a safe process for preparation for company establishment. Entrepreneurs must remember that a short but illegal process may become a concern in the future.

Basic Requirements for Preparation for Company Establishment

The preparation for company establishment in Indonesia will require entrepreneurs to know what they want. When establishing a company, entrepreneurs must decide if they want to have a representative office or a foreign direct investment company. Furthermore, entrepreneurs must also decide on the subjects responsible for the organisation’s key positions such as director, commissary, and shareholders. Entrepreneurs need to have this basic information as a part of the preparation for the company establishment process.

Entrepreneurs must also know that a representative office cannot do any transactions. Every transaction must be done through the company. Hence, if the main company is in London and the representative office is in Jakarta, then every transaction must go through the company in London. All representative offices in Indonesia can only conduct marketing activities.

Entrepreneurs must also prepare a list of responsibilities in the company in advance. An organizational structure may be helpful as a guideline to help map the structure of the task and the responsible individuals. According to Indonesian law, a director is responsible for the operations of the company. Whereas a commissary is responsible to oversee the performance of the director. On the other hand, shareholders are responsible to provide finances for the company when in need. All changes in company structures must be agreeable to all shareholders for it to commence.

Processing Company Setup

When entrepreneurs are ready with the basic requirements, the next thing to do is to prepare the supporting documents. The first essential thing is the identification documents of both the director, commissary, and shareholders. Notaries will also require entrepreneurs to submit the mother company’s company decree in the case of opening a branch company or representative company. The functions of these identification documents are to ensure the validity of both the individuals and the company.

Aside from individual documents, entrepreneurs must also have proof of business address in Indonesia. For easier correspondence usually, it is highly recommended to use addresses in Jakarta. A convenient and affordable way is to either rent a virtual office or serviced office. With a serviced office, entrepreneurs will also get an office suite along with supporting office facilities and services. While a virtual office provides entrepreneurs with a business address, a front desk service to handle calls and emails, a meeting room access, and a dedicated telephone number.

With all those preparations ready, entrepreneurs will have to choose a company code that suits their intended business best. The codes will indicate the applicable regulation for each industry. Once entrepreneurs select five codes, they will have to submit them along with the other documents to the notary. Usually, it will take more or less 10 working days for the notary to produce a company decree.

More reads: Company Incorporation in Jakarta and KBLI Codes

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