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Starting an IT company in Indonesia is one of the promising strategies for financiers considering fast-growing Asian trading fields. Every year, the polity strengthens its position as a key tech hub in Southeast Asia. There are comfortable conditions for launching an IT startup in Indonesia: the local population actively uses mobile and web aids, and the state supports transnational speculation, seeking to increase the influx of high-tech projects.
This article provides a detailed look at the licit aspects of starting an IT company in Indonesia. We will discuss legislative nuances, licensing, excise rates, the specifics of opening an account in local banks and finding qualified personnel. The reader will find a structured overview covering all key stages - from choosing a licit form to obtaining the necessary permits and opening a corporate account. This publication is aimed at expats who would like to gain a deeper understanding of licit and business issues before starting an IT project in the polity.
The region's IT sector review: What makes the region attractive to expats
The Indonesian IT trading field has traditionally been a powerful driver for the whole of Southeast Asia. Since the early 2020s, the polity has demonstrated growth in digital aids, which has accelerated significantly with the advent of global digitalization. According to official statistics, as of the beginning of 2025, the total value of the e-commerce, pecuniary tech and online aids market reached approximately 120 billion US dollars, while in 2019 this figure was in the range of 40-50 billion. The number of tech companies is also increasing, including those that have registered their IT business in Indonesia. The sustainable development of the industry encourages transnational financiers to start operations in this polity and place their projects here. Transnational financiers seek to establish an IT company in Indonesia, focusing on a huge domestic audience (more than 280 million residents), equally the growing solvency of the middle class.
The polity impresses with its dynamics and openness to transnational speculation. Government subsidy programs, special economic zones and a loyal policy towards transnational residents make initiating an IT firm in the polity not just a formality, but a feasible step in terms of costs and organizational procedures. Moreover, there is an actively developed system of accelerators and incubators providing financing and consultations to start-up tech projects. Local venture capital is one of the largest in the region, since many financiers see the leverage of early entry in the polity’s trading field. This is why the prospect to launch a startup in Indonesia is so popular, receiving support from both the state and private funds.
When considering the dynamically growing digital trading field of Southeast Asia, one cannot help but mention the active penetration of the Internet and mobile communications in the polity. As of January 2025, the overall level of Internet coverage reached 78% of the population, which is significantly higher than the average for the region. The younger generation is rapidly mastering new technologies, using smartphones to order goods, aids, and work with pecuniary applications. This environment creates fertile ground for the development of technological initiatives and the launch of IT companies in Indonesia - from innovative pecuniary aids to interactive learning platforms.
The polity's attractiveness to transnational financiers is enhanced by the "Making Indonesia 4.0" program, within the framework of which the state not only declares, but also actually implements digital solutions, improves telecommunications infrastructure and actively develops IT infrastructure. A loyal attitude towards transnational financiers is built both at the legislative level and at the level of practical support measures: simplified visa procedures, excise incentives and other tools to stimulate the registration of IT businesses in Indonesia. Also, a unique ecosystem of startups supported by the state allows for the effective finding of resources, be it expertise, initial financing or partner networks.
The polity is one of the leading regions in Southeast Asia in terms of mobile internet and social media users. At the beginning of 2025, the number of active users of social platforms exceeded 190 million, which opens up enormous opportunities for IT projects related to e-commerce, marketing technologies (MarTech), and many other segments. Such impressive figures encourage financiers to register an IT business in Indonesia to strengthen their presence in this rapidly growing ecosystem.
Experts also point to the high speed of development of pecuniary technologies (FinTech). According to the Association of Indonesian Financial Institutions, the volume of the P2P lending segment has grown by 27% in the last 12 months alone. Equally, local banks and non-banking organizations are interested in implementing new digital products, which motivates transnational financiers to start IT schemes in Indonesia using in-demand solutions in the field of blockchain, mobile wallets and payment systems.
The polity’s government understands that the influx of transnational capital strengthens the national economy, creates new jobs and increases technological literacy among the population. For this reason, the process of registering an IT company in Indonesia is simplified thanks to a streamlined procedure for getting the requisite warrants. Key government institutions actively interact with transnational businessmen, consulting on investment legislation and helping to establish contacts with local partners.
Despite a number of formal restrictions, opportunities for expats remain broad: the legislative framework is regularly updated to support innovative industries. Also, there are some fields that are subject to transnational speculation in the amount of up to 100% (i.e. without the mandatory involvement of a local associate). Such a policy stimulates the initiation of an IT firm in the polity, creating flexible conditions for entering the trading field and simplifying access to local resources.
In developing its tech infrastructure, the polity is implementing training and acceleration programs to increase the number of qualified personnel and give impetus to innovative projects. The Ministry of Communications and Informatics is implementing a set of strategic initiatives aimed at supporting SMEs in the high-tech sector. Many startups receive grants and subsidies, provided that they undergo official registration of an IT business in Indonesia and operate in accordance with national standards.
Also to government programs, the polity has a whole layer of private incubators, accelerators and venture funds functioning in the local trading field. Their mission is to help financiers launch a digital startup in Indonesia by providing mentoring, pecuniary and licit support. Such a variety of development opportunities is another factor explaining why many transnational IT projects choose this polity as a launch pad.
This ecosystem looks attractive not only for individual founders, but also for large tech corporations deciding to start IT schemes in Indonesia. The polity is becoming a logistics hub linking the Southeast Asian trading field with the world's pecuniary capitals. The combination of a huge domestic audience, speculation support and active implementation of new technologies creates conditions in which the local IT environment continues to develop dynamically, scaling both internally and through transnational collaborations.
Licit environment: Directive of business plans in Indonesia
It is extremely prime for transnational financiers to understand the licit norms that govern doing business in this polity. Although the polity is known for its relatively democratic approach to attracting transnational capital, licit nuances can seriously affect the timing and cost of entering the trading field. That is why it is worth carefully studying the legislation before creating an IT company in Indonesia. Correctly executed indentures will help to avoid risks and problematic situations.
In recent years, the government has been updating and improving the licit framework in the IT sector, seeking to bring it into line with transnational standards. The legislation reflects the state's interests in data protection, intellectual property, and cybersecurity. For an entrepreneur planning to start an IT trade in the polity, it is especially prime to abide with local laws to ensure that business plans are conducted licitly. It is also prime to take into account the specifics of excise rules, licensing, and supervisory needs for hiring personnel.
In practical terms, legalizing IT schemes in the polity involves enrolling a trade, acquiring the requisite warrants, and taking into account local rules regarding transnational ownership. For high-tech sectors, there are specific edicts governing content providers, cloud aids, and electronic payment plans. Also, each type of business has its own specifics, determined by classification codes (KBLI), which must be specified when drafting the company's charter.
In general, starting a digital business in Indonesia involves interacting with a number of government agencies, including the Ministry of Law and Human Rights, the Ministry of Commerce, and the Ministry of Communications and Informatics. The process is not overly bureaucratic, but failure to follow basic procedures or ignore certain edicts may result in permits being denied. To avoid such problems, financiers are advised to consult with specialized lawyers who specialize in working with transnational clients.
Legislative acts
The basis for licit edict of commercial activity in the polity is the Investment Law, equally separate edicts governing e-commerce and IT business. Together, they form an extensive approach to controlling the attraction of transnational capital and establishing its licit status. For those intending to create an IT company in Indonesia, decrees concerning electronic transactions, storage of personal data and protection of intellectual property are especially significant.
In 2023–2024, the government actively promoted a package of bills simplifying the procedure for setting up enterprises in the IT sector. They provide for accelerated processing of license applications under the One-Door Integrated Service program, equally clearly defined needs for the technical infrastructure of an IT company. Projects that claim the status of “innovative” can count on additional benefits, which stimulates the opening of an IT business in Indonesia specifically in the innovative segment related to blockchain, AI or big data.
Restrictions for expats
Despite the state's loyalty to transnational financiers, there are restrictions in certain areas regarding the share of transnational participation or the form of partnership. To fully legalize IT schemes in Indonesia in segments that the state considers strategically prime, it is necessary to conclude an alliance with local financiers. However, the IT sector, as a rule, does not belong to highly restricted areas, with the exception of certain types of plans related to security and public aids. Nevertheless, abidance with the percentage quotas of company ownership remains a prime factor. To start a digital business in Indonesia, you need to make sure that your area of activity allows 100% transnational capital or provide for the involvement of a local partner.
Another aspect is the edicts regarding the location of servers and storage of user data. In some cases, the law requires companies to keep server equipment directly in the polity to meet national security and privacy needs. This should be taken into account by anyone looking to open an IT business in Indonesia in the field of cloud solutions, SaaS services, or processing large amounts of personal data.
Main legal forms of business for IT companies in Indonesia
Choosing a licit form of enterprise is among the prime decisions for a transnational investor. Particular attention should be paid to abidance with licit needs and maximum protection of the founders' interests. Before you understand how to open an IT startup in Indonesia, you need to decide on the optimal licit structure that will correspond to the purpose and scale of the project.
The most common forms are PT (Perseroan Terbatas), which is an analogue of a limited liability company for local owners, and PT PMA, which is a type of PT that allows 100% transnational capital. For an individual or a group of transnational financiers, PT PMA is more suitable, since in most cases the law allows owning a company without involving local partners. However, it should be taken into account that some types of plans may require mixed participation, that is, a certain percentage of local ownership.
So, it is possible to establish an IT company in Indonesia in the form of a regular PT, but this option most often involves the participation of Indonesian citizens as the main or co-owners. If you plan to open an IT startup with purely transnational capital, then the most logical choice would be PT PMA. Equally, there are a number of additional needs for the minimum authorized capital, equally formalities related to the licensing of specific types of IT plans.
Legal forms of IT business in Indonesia may have different features contingent on the classification codes (KBLI) under which the activity falls. For example, software development, cybersecurity, online platforms - each area has its own nuances in obtaining permits and supervisory approvals. It is prime to study the code under which your business falls before drawing up the relevant indentures.
Peculiarities of PT PMA (foreign enterprise) registration
If you plan to operate without a local partner, registering a PT PMA in Indonesia for an IT company is the best solution. The process usually consists of several main stages: applying for preliminary permission to the BKPM (Investment Coordinating Board), preparing the constituent indentures and notarizing the charter, registering with the Ministry of Law and Human Rights, and obtaining additional permits contingent on the specifics of the IT activity.
One of the key needs for PT PMA is a minimum authorized capital, which as of 2025 can be around IDR 10 billion (approximately USD 650,000-700,000) for most sectors. However, in some cases, this threshold can be lowered if the project is recognized as innovative or focused on socially significant plans. Also, quotas for hiring transnational personnel have been introduced for transnational companies: you are required to employ local specialists and pay a government fee for each expat employed.
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Licensing and permits for IT activities in Indonesia
Proper execution of permits is a prime part of entering the local trading field. To create an IT company in Indonesia and work in a licit field, you need to determine in advance what type of license is suitable for your project. The polity has both general licenses, mandatory for any business activity, and special ones, required for plans in certain segments of information tech.
Permits may include certificates from the Ministry of Communications and Information Technology for online content providers, licenses from pecuniary regulators for companies functioning in FinTech, etc. In some cases, it will also be necessary to obtain an IT permit in Indonesia when developing software products for the public sector or when providing educational tech aids. Each of these sub-segments is governed by separate edicts that prescribe specific needs for infrastructure, personnel, and reporting.
Initiating a tech mercantile in the polity is impossible without thoroughly checking the project’s abidance with all edicts. It is prime to understand that incorrect or incomplete licensing can result in administrative fines and even suspension of operations. Also, official permits are often required to open bank accounts, attract speculation, and conduct pecuniary transactions.
Contingent on the area of work, licenses can be one-time, required only upon registration, or multi-stage, renewed annually. For example, if a company is engaged in cybersecurity and comes into contact with critical infrastructure, then obtaining additional approvals is a mandatory condition. A separate package of indentures is submitted if the company is going to use civilian cryptographic equipment or store confidential user data. For those planning serious projects, it is critical to obtain a full IT business license in Indonesia, reflecting all areas of activity.
Working in the field of e-commerce, online gaming or social media may also fall under special edicts. This applies to the content part, copyright protection, equally rules related to age control. Since the government strives to protect its citizens from false information and harmful content, any violation in this segment may lead to the suspension of the license. Therefore, starting an IT business in Indonesia should be done in conformance with all the edicts.
Enrollment sequence
Before we go into the process in detail, it is worth emphasizing that any misrepresentation of information or carelessness in paperwork can delay the project launch by several months. That is why potential founders must take into account all supervisory needs, including quotas for transnational personnel, the presence of a charter in Indonesian, and the approval of types of plans. Below is a step-by-step diagram explaining how to register an IT company in Indonesia.
Step 1. Preliminary approval for plans. The first step is to determine the classification codes (KBLI) that your project falls under. If you are thinking about how to start an IT company in Indonesia, you need to clearly know whether the company will be engaged in software development, implementation of online platforms or supply of software for government agencies. After clarifying the KBLI, you need to contact the relevant departments - BKPM or the Ministry of Communications and Informatics (if the activity is related to electronic aids) - to obtain preliminary approval. This step allows you to ensure that the process of registering an IT company in Indonesia will abide with established edicts. Typically, this step takes from one to four weeks, contingent on the specifics of the business and the completeness of the submitted indentures.
Stage 2. Preparation of constituent indentures and notarization. The next step is the preparation of a draft charter, drawn up in Indonesian, describing the capital structure, management procedures and scope of plans. Of particular importance here is the correct wording of the KBLI codes. After the charter is drawn up, the indentures are certified by a notary, who checks the conformance of the statute with current licit norms. At this stage, it may also be necessary to translate some papers into Indonesian if they were originally prepared in another language.
Step 3. Registration with the Ministry of Justice. After the charter has been notarized, it is necessary to register the IT project in Indonesia with the Ministry of Law and Human Rights. The application is submitted electronically through the AHU (Administrasi Hukum Umum) system. The founders must apply for registration of an IT company in Indonesia in the prescribed manner, attaching a set of notarized indentures. Based on the results of the review, the ministry issues a certificate of registration of a licit entity. From this point on, the company is formally considered established, but there are still steps to obtain a levy ID and some industry licenses.
Having completed the registration procedure with the Ministry, the future IT company must obtain a tax identification number (NPWP) and undergo the registration procedure with the statistical authorities (BPS). It may also be necessary to obtain local licenses (NIB - Business Identification Number and others), contingent on the geography and type of activity of the company. Careful observance of this procedure ensures the licit functioning of a licit entity and allows you to open a corporate account, issue invoices, pay levies and conclude contracts without any obstacles.
List of indentures for establishing an IT company in Indonesia
A complete set of indentures is the basis for a successful business launch, because every mistake or omission can result in additional costs and delays. To create an IT company in Indonesia, you need to prepare all the papers in advance that meet the needs of local legislation. It is prime to check not only the licit correctness, but also the formal language - in most cases, statutory indentures are drawn up in Indonesian.
The package of Indentures for registering an IT company in Indonesia must include:
- Founding indentures (charter, decision on creation) with a list of KBLI codes.
- Decision to establish an enterprise.
- Passport details (or identity indentures) of all foreign founders and directors.
- Indentures confirming the powers of directors.
- Certificate of licit address (may be a lease agreement or permission to use a virtual office).
If you are planning to initiate an IT firm in the polity, prepare additional certificates or letters confirming the technological profile of the project. For example, a technical description of the product or service, a business plan that explains how the company intends to conduct its operations in the polity may be required. A number of departments in the polity may request such Indentures for examination, especially if we are talking about software development for government agencies or work in the telecom sector.
Also, founders must have proof of authorized capital and a bank statement indicating that there are sufficient funds in the account for the launch. This Indenture is usually required when you want to launch an IT startup in Indonesia with foreign capital (PMA). In cases where the project is declared as innovative or related to socially significant tasks, additional certificates and studies confirming the benefit to society and the implementation of advanced technologies may be added to the package.
Once the complete set is ready, you should certify some of the Indentures with a notary and go through the procedure of submitting electronic applications to government agencies. The exact details depend on the current rules, which may vary slightly in different provinces, but the general scheme is approximately the same for the entire polity.
Levies and pecuniary reporting for IT business in Indonesia
The fiscal policy of the state is one of the determining factors when choosing a jurisdiction. For transnational financiers planning to create an IT company in Indonesia, understanding the excise system and accounting rules becomes critically prime. Violations in this area can lead to sanctions and blocking of accounts, so timely study of the rules allows you to avoid many troubles.
The main levies that local companies must pay include CIT, VAT, and Dividend Tax (if profits are distributed). For those planning to launch a tech business in Indonesia, it is prime to budget in advance to cover these levies. The excise system is relatively transparent, but requires careful bookkeeping.
Main excise rates: VAT, corporate excise, income excise
The CIT rate in the polity as of the beginning of 2025 is generally around 22% for companies with large turnover. However, there are different thresholds and exemptions contingent on the annual income of the company. The VAT is 12% and applies to most goods and aids, including some IT products.
Separately, it is worth mentioning the dividend repatriation excise for transnational shareholders, which can range from 10 to 20%, contingent on double taxation agreements. For those who are just studying levies for IT firms in the polity, it is prime to take these features into account when calculating the pecuniary model. Incorrect planning of the excise burden can significantly reduce the profitability of the business, especially in the first years of its operation.
Special excise regimes and benefits for IT companies
To stimulate the development of the digital sector, the government is implementing various support measures: from excise holidays to rate reductions for certain types of plans. excise incentives for IT businesses in Indonesia can be granted to companies that meet a number of conditions, such as conducting research and development, creating new jobs for the local population, or implementing projects recognized as strategically significant. For example, if a startup is engaged in artificial intelligence or cybersecurity, it can apply for a number of concessions, including a temporary cancellation of a number of fiscal payments.
In some cases, companies can use preferential regimes in special economic zones, where the corporate excise rate is lower and VAT is fully or partially waived if certain conditions are met. However, obtaining such benefits is associated with additional approvals and periodic reporting on the fulfillment of speculation obligations. Therefore, it is worth thinking in advance about how to launch a technology business in Indonesia in such a way as to make the most of the available preferences.
Pecuniary reporting and government liabilities
Firms in the polity are required to maintain their accounting records according to national accounting standards (PSAK), although some elements may be aligned with transnational IFRS standards. Annual reports must be submitted to the excise authorities, and in some cases, audited accounts must be provided. Record keeping requires the involvement of qualified accountants and auditors who can accurately reflect all pecuniary transactions, including revenues from exports and imports of digital aids.
For startups with transnational shareholders, it is prime to properly formalize relationships with transnational financiers and timely declare the funds received. In this regard, accounting services for startups in Indonesia are often outsourced to companies specializing in interaction with transnational founders. This approach allows you to avoid errors in pecuniary reporting and abide with all supervisory needs.
How to accept payments from clients when launching a startup in Indonesia?
When creating an IT company in Indonesia, a prime role is played by the pecuniary infrastructure, which will allow for prompt settlements with clients and partners. A competent choice of bank and connection to payment systems can significantly reduce transaction costs and increase convenience for transnational clients. Also, licit needs for the storage of funds and ensuring transparency of transactions are of great importance.
In the polity, there are both local banks (for example, BCA, Bank Mandiri) and transnational branches (HSBC, Citibank). Each of them can offer its own terms and service rates, equally a set of tools for the corporate sector. When choosing a pecuniary institution, it is worth comparing fees, geographic network of branches, availability of online banking and compatibility with transnational payment systems.
In order to open an account for an IT company in an Indonesian bank, it is necessary to provide a set of Indentures confirming the status of the licit entity and the identity of the representatives. Typically required are: a certificate of registration of the company (issued by the Ministry of Law and Human Rights), an excise number, the company's articles of association, and a resolution of the board of directors authorizing a specific person to open an account. Some banks may require additional proof of address, equally bank references from other regions.
Opening a corporate account for an IT company in Indonesia can take from one to three weeks, contingent on how complete and promptly all the requested Indentures are provided. In case the founders are entirely expats, the personal presence of the manager or authorized person at the bank branch may be required to sign the forms. Also, some credit institutions set a minimum balance on the account, which must be deposited immediately after opening.
For tech startups that serve customers from different regions, it is prime to integrate with popular payment gateways like PayPal, Stripe, or 2Checkout. These aids work in the polity, but sometimes require additional verification of the legality of the business and the provision of corporate Indentures. An alternative is local gateways, which offer better fees and convenience for Indonesian users, but may be less familiar to customers abroad.
By connecting transnational systems, you will be able to accept payments in different currencies. This simplifies working with third-party trading fields and allows you to serve a global customer base. Equally, opening a bank account for an IT company in Indonesia must be done before the integration, since almost all payment providers require corporate account details for withdrawal of funds.
Conclusion
The growth prospects for the IT trading field in the polity in the coming years look very promising. The government is actively implementing national digital transformation programs and encouraging transnational speculation. Given the forecasts of leading analysts and the increasing share of electronic aids in daily economic activity, starting a digital company in Indonesia promises to be a profitable venture for those who are ready to carefully work out the legislative and organizational aspects.
This article covers key elements: licit forms, licensing, levies, hiring and visa needs. The focus is on the licit side of the issue so that a potential investor can understand the main risks and mechanisms for minimizing them. By following the algorithm for registering an IT company in Indonesia, an expat entrepreneur can effectively lay the foundation for successful work in the rapidly growing digital trading field.
