Drafting the Articles of Association for a company in Indonesia

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Being one of the leading emerging economies of the world, Indonesia attracts several foreign investors annually. They are drawn by factors like a strong domestic consumption, which ensures huge demand for their products and services, the abundance of natural resources, and an investor-friendly government. There is also the ready availability of a skilled and young workforce. Furthermore, the Indonesian government is working on simplifying license procedures and enhancing infrastructures to improve the investment climate. If you want to set up your business here, you must hire a reputed incorporation services Indonesia firm with a thorough knowledge of the laws and regulations.

Indonesia’s Company Law No. 40, 2007 governs companies in Indonesia. The Deed of Establishment and Articles of Association are essential documents required for setting up your company.

Let us look at both documents in detail:

The Significance of the Deed of Establishment

The Indonesian laws state that you need a Deed of Establishment for setting up your Limited Liability Company (PT PMA). You need to prepare it after selecting your business name and post its approval. The Deed must be certified by the Ministry of Law and Human Rights. It contains the company details, along with the Articles of Association.

What Do the Articles of Association need to contain?

A registered notary public will draft your company’s Articles of Association. As per Indonesian law, it must contain:

  • The name of the company
  • Domicile place of the firm
  • Details of capital, such as authorized capital, paid-up, and issued capital
  • The company’s business activities
  • The amount and value of company shares
  • The directors’ and commissioners’ responsibilities and duties
  • Minimum of two shareholders
  • At least one director and commissioner
  • The place where shareholders’ meetings are held
  • Method of using and distributing the company’s profits and dividend
  • How you will hold the shareholders’ meetings

If you have investment plans, setting up your business in Indonesia would be a profitable decision to make. Being a highly-experienced firm, 3E Accounting Indonesia, with its professional team, can guide you smoothly through the company set-up procedure. We have helped several entrepreneurs with Indonesia company registration procedures and enabled them to start and run their businesses profitably.