Perseroan Terbatas (PT): An Exploration of Its Facets – Blogwal

Perseroan Terbatas (PT), a foreign investment limited liability company, stands as the requisite legal entity for foreign entities or individuals venturing into revenue-generating endeavors in Indonesia. This unique business structure enables foreign investors to actively partake in commercial activities within the Indonesian landscape.


Any Indonesian enterprise directly welcoming foreign investments must adopt the PT framework, categorized as open, closed, domestic, foreign, individual, or general public PT.

Across nations, distinct legal entity types prevail. In the American context, a Perseroan Terbatas (PT) aligns with a Limited Liability Company (LLC). Functionally akin to LLCs, PTs extend ownership shares to the public, wherein shareholders bear legal responsibility for the company’s debts in bankruptcy. However, this liability is confined to the original investment amount. The articles of association meticulously delineate share ownership particulars.

Indonesian legislation oversees the spectrum of businesses eligible for PT status, with governance and administration governed regionally. Rules may diverge across different regions, contingent on the specific nature of each business. Although parallels exist between PTs and U.S. LLCs, disparities emanate from adherence to distinct Indonesian laws regarding business entities.

The PT landscape encompasses several variants:

  1. Open PT: An LLC open to public share acquisition, simplifying stock trading for most investors.
  2. Closed PT: An LLC limiting shares to private entities or select individuals, a norm often seen in family-run enterprises.
  3. Domestic PT: An LLC physically operating in Indonesia, subject to stringent compliance with local business regulations.
  4. Individual PT: An LLC with shares owned exclusively by a single individual, typically the business’s owner or director.
  5. Foreign PT: An LLC governed by the laws of a foreign country but operating within Indonesia, bound by Indonesian regulations.
  6. General Public PT: An LLC with a free-share ownership model, accessible to any entity, resembling an open PT but with potential stock exchange listings.

The Indonesian Investment Coordinating Board (BKPM), a Non-Ministerial Government Agency, acts as the conduit between the government and private enterprises. Tasked with policy implementation and foreign direct investment coordination, the BKPM plays a pivotal role in enhancing domestic and foreign investment quality, bolstering Indonesia’s economy and fostering job creation.

Several steps are integral to establishing a PT, each requiring a specific timeframe:

  1. Principle License & Business License Acquisition: Seven days
  2. Deed of Establishment Processing (Including Articles of Association): One to two days
  3. Legalization of PT PMA’s Legal Entity Status: Ten days
  4. Domicile Letter Acquisition from Local District Authority: Three days
  5. Obtaining Tax Identification Number (NPWP) and Taxable Entrepreneur Registration Number (PKP): Three days
  6. Company Registration Certificate (TDP) Issuance from BPPT: Fourteen days
  7. Manpower Report and Company Welfare Report from Ministry of Manpower Sub-Department: Seven days

Venturing into Indonesian business as a foreign entity demands adept navigation of intricate rules. While a PT offers a legal avenue, establishing a foreign investment company necessitates time and expertise in compliance with government regulations.

Certain sectors impose restrictions, requiring partial domestic ownership, prompting collaboration with local partners. Alternatively, establishing a representative office might prove advantageous for initial exploration, facilitating local networking and market research. This strategic approach equips companies with insights before transitioning to the subsequent step of forming a Perseroan Terbatas.