ECONOMIC & COMMERCE

• ​How do i know my obligation to pay tax as an expatriate working in Indonesia?​

  Foreigners in Indonesia can be categorized as residents or non-residents depending on the length of stay and their activities. When an individual becomes a resident in Indonesia, for tax purposes, he/she is obliged to register at the appropriate tax office as clearly stated by Law Number 17/2000 on income tax provisions. After a taxpayer is registered and has a tax ID Number (TIN/NPWP), he/she has obligations and rights as regulated by the prevailing tax provisions, for example, the obligation to pay and report monthly return (SPT Masa) and annual returns (SPT Tahunan).
  More details at: http://www.pajak.go.id (PDF format)​​

• ​How do I get a Taxpayer Identification Number (TIN)?​

  ​According to the decree of Director General of Taxes, foreign investment corporation in field of chemical industries, non steel manufacturing industries, and other manufacturing industries that is categorized in the business groups of 35000, and 36000, and 39000 should generally register in KPP PMA Satu.

  The requirements of registration are:

  • Certification from Board of Investment (BKPM)

  • Notary deed for establishment of the corporation

  • Power of attorney if the application is signed by person who is not the authorized person in the company

   

  KPP PMA Satu will then issue a Taxpayer Identification Number. The number is valid for all taxes transaction including income tax and value added tax.

• ​​​How do I pay my tax?​

  ​​The tax due can be paid by taking a payment slip (SSP) to a bank, or just asking your bank to pay with e-payment. (dapat download di pdf format “tax guidelines for expats working in Indonesia)​

• What is the investment procedure in Indonesia?​

  You can come to the Investment Coordinating Board (BKPM) office in Jakarta or to the Regional Investment Coordinating Board (BKPMD) offices in Bali, Medan, Semarang, Surabaya, Balikpapan, Papua, etc. They will provide you with information related to investment and the procedures.

   

  More details: http://www.bkpm.go.id (Doing Business in Indonesia PDF format)​

• Can foreigners own property in Indonesia?​

  The straight answer to this question has been in the past a clear NO. Up to now foreigners CANNOT OWN freehold property in Bali i.e. having their name on the official land title. These laws are changing, but until now (Year 2004) it has not yet been clearly defined by law WHICH foreigners (permanent residents, temporary residents with working or retirement visa, certain categories of visitors, etc) will qualify.

   

  However, although foreigners probably will not be able to own "freehold" property (Hak Milik), several Government Regulations issued in 1996 allow foreigners to hold a "Hak Pakai" title (Right of Use) valid for 25 years with the possibility of another 25 years extension.

   

  The following "Regulations" are the official rules at this time:

  Government Regulation No. 41 of 1996 (GR41/96) states that "foreigners resident in Indonesia" can hold a Hak Pakai title. This broad definition was clearer defined with the issue of "Regulations of the Minister for Agraria" No. 7 of 1996 (RMA 7/96): Article 1(1) states that "a foreigner whose presence in Indonesia gives opportunities for national development" may own a property under Hak Pakai, and Article 1(2) says such a foreigner is one who "has and maintains an economic interest in Indonesia by implementing an investment in the ownership of" that property.

   

  In a letter accompanying RMA 7/96 the Minister stated specifically that, according to this new concept, a foreigner will qualify for Hak Pakai even if he is in Indonesia only "from time to time".

   

  In other words, the Minister says any foreigner who invests in and maintains a property in Indonesia is contributing to national development and therefore entitled to hold a Hak Pakai title – even if he is only an occasional visitor to Indonesia.​

• ​How do most foreign investors solve this ownership problem?​​​

  In most cases an Indonesian citizen will hold the interest in the property as the nominee and on behalf of a foreigner, and the land title will be issued in the Indonesian's name. While such arrangements are not strictly against the law, it is understood they are contrary to current government policy and the spirit of the law.​

• How can I set up a new Foreign Direct Investment (FDI) company in Indonesia?​​​

  Foreign Investment (Penanaman Modal Asing/PMA) should be incorporated as an Indonesian limited liability company (Perseroan Terbatas/PT) and domiciled in Indonesia. To invest in Indonesia an investor should first look at "Negative List of Investment" (Daftar Negatif Investasi /DNI) which contains those business sectors that are absolutely closed to

  all investment, closed to only foreign investment, and which are still opened under certain conditions.

   

  Outside the list, all sectors are opened to investment. Foreign investment approval will be issued by Investment Coordinating Board (Badan Koordinasi Penanaman Modal/BKPM) in Jakarta. However, for projects located in a Bonded Zones, investors should submit the application to BKPM through the respective Bonded Zone Authority.

   

  To apply for a new investment approval applicants have to complete and submit 2 (two) copies of form Model I/PMA which should be a minimum participated by 2 (two) shareholders. Following the evaluation process, the Chairman of BKPM will issue the Investment Approval. Upon the issuance of the investment approval, a new company can be legally established through the execution of the articles of incorporation in notary deed form.​

• ​How can I set up a new Representative Office in Indonesia?​​​

  A foreign company Representative Office (Kantor Perwakilan Perusahaan Asing/KPPA) outside the finance sector shall be established with the approval of the Chairman of BKPM. To apply for the approval, applicants have to submit 2 (two) copies of form Model KPPA to the BKPM Office with the following attachments.​

• Is it possible to have 100% shareholding for foreigners?​

  Yes it is, basically a new company can be established in the form of 100% foreign ownership, which should be at least participated by 2 (two) shareholders either as foreign individuals or companies entity according to legal conditions.​

• ​​Who is the contact person that we can ask about the progress in processing and finishing such approvals?​​

  The BKPM officer will let you know about the persons depend on the kind of application. On other hand, you can try to find out through the structure of organization mentioned in BKPM website at www.bkpm.go.id​

• What is the procedure to import certain goods to Indonesia?​​

  You are obliged to have Special Importer Identity Number (NPIK) according to the Decision of the Director General of Foreign Trade No. 5/DJPLN/KP/III/2002 dated March 7, 2002 on Certain Imported Goods.

  More information: http://www.dprin.go.id/regulasi/english/2002/03/NPIK1.pdf​

• ​​What is the procedure of exporting and re-importing goods from Indonesia to avoid double taxation? ​

  a. During the shipping process of goods out of Indonesian Customs Area (export), report to Customs Officials at the nearest Customs Office to the loading location, using Export Notification documents (Pemberitahuan Ekspor Barang/PEB). This procedure based on Customs Director General Decree No. KEP-151/BC/2003,

   

  Accessible at: http://www.beacukai.go.id/library/data/BC15103.pdf

   

  b. When Re-importing goods into Indonesian Customs Area, the previous export documents should be attached to the Notice of Goods Import (Pemberitahuan Impor Barang/PIB) as proof that the goods originated from Indonesian Customs Territory.

   

  c. According to the Announcement of the Indonesian Customs Director General No. SE- 07/BC/1998 referring to the Indonesian Ministerial Decree No. 133/KMK.05/1997, goods that have been exported and then re-imported in the same condition are exempted from Import Tax, but are liable to any existing Value Added and Luxury Tax.

  Accessible at: http://www.beacukai.go.id/library/data/se0798.pdf

  More information: http://www.dprin.go.id/regulasi/english/2002/03/NPIK1.pdf​