Tax Compliance & Training Indonesia

Indonesia welcomes foreign investment, and setting up a PT PMA (Penanaman Modal Asing, or Foreign Investment Limited Liability Company) is a great way to establish a formal business presence in this dynamic Southeast Asian market. While the process is achievable, it’s wise to be prepared for certain requirements and potential hurdles.

Here’s a breakdown to help you navigate the steps like a pro:

Consider Local Assistance

While attempting to register a PT PMA independently is possible, Indonesia’s regulatory landscape presents challenges for foreign investors. Language barriers, potential changes to regulations, and bureaucratic processes can hinder your efforts. A trustworthy local consultant who is well-versed in PT PMA regulations is strongly recommended to streamline the process, avoid missteps, and prevent unnecessary delays.

Choosing a Reliable Consultant

Exercise due diligence when selecting a consultant. Look for the following:

• Indonesian Ownership: Current regulations often mandate that your consultant be an Indonesian individual/entity or have a significant local presence.
• BKPM Certification: Verify your consultant’s certification with the Investment Coordinating Board (BKPM).
• Client Testimonials: Research the consultant’s reputation. Positive references and testimonials from previous clients offer valuable insights.
• Power of Attorney: Legitimate consultants will always require a signed Power of Attorney, authorizing them to act on your company’s behalf. This grants you legal control.
• Transparent Reporting: Your consultant should proactively provide progress updates throughout the registration process.

Defining Your Business Activities

Indonesia maintains a Negative Investment List (DNI) with updated, detailed information on business sectors open to foreign investment and any associated restrictions. Thoroughly consult the DNI with your agent to ensure your PT PMA’s intended activities comply with current regulations.

Determining Your Company Location

Choosing your PT PMA’s office location influences future administrative processes, such as obtaining a Taxpayer Registration Number (NPWP). Changing your business address could be costly and time-consuming. Careful consideration at the outset can save later inconveniences.

Ensuring Adequate Capitalization

Indonesia enforces substantial minimum paid-up capital requirements for PT PMAs. These regulations could fluctuate by 2024, so be sure to obtain the most up-to-date information. Investing beyond the minimum can offer your business added stability and potential for accelerated growth.

Avoiding Nominee Arrangements

Nominee arrangements involve appointing local individuals as shareholders or directors in your PT PMA when they have little or no genuine involvement in the company. While tempting as a short-term solution, nominee agreements carry high risks. Disputes about ownership or control could cause severe setbacks. It’s crucial to prioritize ethical and legal practices when structuring your PT PMA.

Prioritizing Document Transparency

Reputable consultants hand over all legal documents upon completion of your PT PMA’s registration. Any efforts to withhold documents should be a red flag. You have the right to full control of your company’s documentation.

Understanding Taxation Obligations

Indonesia maintains a comprehensive tax system, and obtaining a Taxpayer Registration Number (NPWP) is essential for PT PMAs. Failing to file returns or pay taxes on time can incur penalties. Enlisting a certified accountant helps ensure meticulous tax compliance and financial health.

Respecting Indonesian Law and Bureaucracy

Adhering to Indonesian regulations is paramount. Disregarding regulations could have legal ramifications and tarnish your company’s reputation. Understanding bureaucracy and fulfilling documentation requirements patiently helps secure business stability.

Appreciating Indonesian Business Culture

Immersing yourself in Indonesian business culture will pay dividends. Familiarize yourself with holidays, customs, and negotiation practices. Respect and sensitivity pave the way for lasting business relationships in Indonesia.

Disclaimer: Regulations pertaining to PT PMAs are subject to change. Always verify the most current requirements with BKPM or a legal professional before initiating the registration process.

Extra Tips for Success

• Patience is Key: Bureaucracy takes time – factor this into your planning. Stay positive and work closely with your consultant.
• Build Relationships: Indonesians value strong working relationships. Take time to cultivate connections with your consultant, legal team, and potential local partners.
• Learn the Culture: Familiarize yourself with Indonesian business etiquette and practices. This demonstrates respect and fosters better integration.

Indonesia Awaits You!

Setting up a PT PMA in Indonesia opens doors to one of the world’s most promising markets. By understanding the current regulations, choosing the right partners, and adopting a respectful approach, you’ll have a smooth and successful business foundation.

Need a starting point? Come Visit Indonesia is happy to connect you with trusted business consultants. Let us help make your entrepreneurial dreams in Indonesia a reality!

Navigating through immigration processes, whether as a foreigner or a local, involves understanding a multitude of terms and procedures. The Directorate General of Immigration in Indonesia employs various terminologies and procedures essential for smooth immigration operations. This guide aims to decode the intricacies of Indonesian immigration terms, offering clarity on commonly encountered terms and procedures.

Indonesia’s Visa and Immigration Terms You Need to Know

Understanding Indonesian immigration terminology is pivotal for seamless navigation through immigration procedures. Whether you’re a foreigner seeking temporary residency or a local sponsor, familiarity with these terms facilitates compliance and smoothens immigration processes. By acquainting oneself with the nuances of Indonesian immigration terminology, individuals can ensure adherence to regulations and streamline their immigration experiences effectively.

What are the different types of visas in Indonesia?

Indonesia offers various visa options depending on your purpose of visit and intended stay:

Visit Visa:

• Visa on Arrival (VOA): Valid for 30 days, extendable once for another 30 days. Available for specific nationalities upon arrival at designated airports.
• A visa obtained at Indonesian Embassy/Consulate: Valid for longer durations, depending on the purpose of the visit.

Limited Stay Visa (VITAS): For foreigners working, studying, investing, or residing long-term in Indonesia. Requires sponsorship and specific documentation.

• Diplomatic & Service Visa: Issued to diplomats, government officials, and their dependents.
• Other Visa Types: Research, media, and emergency visas exist for specific purposes.

What are the new visa rules for Indonesia 2024?

Effective December 31, 2023, Indonesia introduces significant changes to its visa system, aiming to simplify procedures and attract foreign investment and talent. Here’s a summary of the key updates:

1. Golden Visa: A new visa category offering special privileges for eligible individuals, designed to boost investment and tourism.

2. Investor KITAS: Minimum investment threshold raised to 10 billion IDR for one-year validity. Allows conversion from B211 visa and now offers a Working KITAS option for foreign professionals.

3. Retirement KITAS: The age requirement remains 60, but income/pension proof of USD 3,000 is now required. Travel agency permits and hiring Indonesian personnel are no longer mandatory.

4. Second Home Visa: Requires maintaining funds in a state-owned bank or purchasing a condominium exceeding USD 1,000,000.

5. Streamlined Processes: Elimination of SKTT requirement for certain applications, along with adjustments to passport validity and travel document data updates. Existing applications under prior regulations remain valid until December 31, 2023.

Can I live in Bali permanently?

Permanent residency in Indonesia is challenging and requires meeting specific criteria, including significant financial investment or marriage to an Indonesian citizen. Consulting an immigration lawyer is highly recommended for exploring this option.

What is a Multiple Visit Visa?

Multiple Entry Visa cater to both tourists and business travellers, offering them greater flexibility and convenience compared to single-entry visas.

D1 Visa (Multiple Entry Tourist Visa): This visa is ideal for tourists who plan to visit Indonesia frequently for leisure purposes. It allows a stay of up to 60 days per visit, with the possibility of extending twice for additional 60-day periods. You can enter and leave Indonesia as many times as you want throughout the visa’s validity period, which can be 1, 2, or 5 years.

D2 Visa (Multiple Entry Business Visa): This visa is suitable for business travellers who require frequent visits to Indonesia for business activities. Similar to the D1 visa, it permits a stay of up to 60 days per visit, with extensions of up to 60 days twice. You can enjoy multiple entries throughout the visa’s validity period, which can be 1, 2, or 5 years.

Planning to travel to Indonesia soon?

Come Visit Indonesia can assist you throughout your travel planning! We will guide you through immigration and cultural insights to ensure a smooth and enriching experience.

Remember, visa regulations are subject to change. Contact Come Visit Indonesia for the latest and most accurate information. We look forward to welcoming you to Indonesia!

Have you ever felt confused about annual and monthly tax reporting? Which one do you need to report, or are there any differences regarding the requirements? Let’s clear things up!

Understanding the difference between annual and monthly tax reporting is crucial for managing your finances effectively. Both are known as Notification Letters (SPT) in Indonesia, but they differ in frequency and purpose.

Here’s a breakdown to help you navigate:

Annual vs Monthly: Timing Difference

 

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As the name implies, monthly SPT (Periodic SPT) is reported every month, usually by the 20th for income tax and month-end for VAT.

Meanwhile, the annual tax return applies once a year, by March 31st for individuals and April 30th for businesses.

Type of Tax Within The Spectrum

Annual SPT covers personal and corporate income, including assets, debts, and taxes payable for the year.

Monthly SPT primarily focuses on withholding or collecting income tax (PPh) for various categories (articles 21, 22, 23, etc.) as well as VAT and PPnBM.

Forms You Should Apply for

Annual SPT covers reports for individuals and corporate forms like SPT 1770, SPT 1770 S, or SPT 1770 SS. Businesses use SPT 1771.

Monthly SPT forms may vary depending on the specific tax type.

Late Penalties

Missing deadlines that attract fines for monthly and annual tax payments are also different.

For Annual SPT, individuals face an IDR 100,000 fine, while businesses get fined IDR 1,000,000. Late payments incur additional interest charges.

While for monthly SPT, late reporting of VAT SPT attracts an IDR 500,000 fine, and income tax SPT incurs an IDR 100,000 penalty. Late payments also involve interest charges.

Still feeling overwhelmed? Don’t hesitate to reach out!

Come Visit Indonesia can help you navigate the complexities of tax reporting. Our team of experts can provide guidance, answer your questions, and ensure your tax process runs smoothly and complies with regulations.

Remember, managing your finances effectively starts with understanding your tax obligations. By knowing the difference between annual and monthly SPTs, you can stay on top of your finances and avoid any unnecessary penalties.

In 2024, significant changes have been implemented regarding corporate income tax payments in Indonesia. The government has instituted measures to enhance tax payment efficiency, allowing for easier deduction of expenses from annual profits to mitigate tax liabilities.

However, compliance demands have heightened, necessitating precise reporting of withholding tax by companies. The government has augmented validation mechanisms to ensure the accuracy of reported information.

This article elucidates the 2024 alterations to corporate income tax and guides maximizing allowable deductions.

Corporate Income Tax Structure in Indonesia

Companies in Indonesia are categorized into three income tax brackets based on annual revenue:

1. 0.5% of gross revenue
2. 11% from profit for revenue between 4.8-50 billion IDR
3. 22% from profit for revenue exceeding 50 billion IDR

Corporate Income Tax Calculation

Taxable income is computed as gross income minus allowable deductions and then subjected to the relevant tax rate based on annual revenue.

Allowable Deductions for Corporate Income Tax Reduction

For companies with revenue below 4.8 billion IDR, deductions are not applicable as tax is computed based on gross revenue. However, for those with revenue exceeding 4.8 billion IDR, deductions are contingent upon accurate withholding tax reporting.

Most business expenses are deductible, subject to withholding tax rates as per the following table:

Corporate Income Tax Reporting Deadline

All businesses are mandated to report their corporate income tax by April 30, 2024.

Indonesia Core Tax System

Commencing July 2024, the Indonesian government is implementing a new tax system integrating corporate bank accounts directly into its framework. This initiative aims to streamline tax recording processes and deter tax evasion. While rollout specifics are pending, meticulous tax reporting and expense recording remain imperative for optimizing income tax obligations.

Still Have Questions About Tax in Indonesia?

Navigating Indonesia’s tax landscape can be intricate, requiring specialized knowledge and adherence to evolving regulations. At Come Visit Indonesia, we empower businesses with comprehensive tax consultancy services designed to streamline compliance and optimize financial strategies.

Our team of experienced tax professionals possesses a deep understanding of Indonesian tax laws and regulations. We guide you through the intricacies of corporate tax reporting, ensuring accuracy, timeliness, and adherence to all legal requirements.

Furthermore, we provide valuable insights into tax planning strategies tailored to your specific business operations. This proactive approach helps you minimize tax liabilities and maximize financial benefits within the legal framework.

Partner with Come Visit Indonesia and gain the clarity and confidence you need to navigate Indonesia’s corporate tax landscape with ease. Contact us today to schedule a consultation and unlock the full potential of your business in Indonesia.

Indonesia’s economic landscape is blossoming, presenting a wealth of opportunities for regional and global investors. Lauded as one of Asia’s most attractive business destinations, the nation boasts an abundance of natural resources, a dynamic and technically skilled workforce, and a vast, growing domestic and regional market. Notably, Indonesia’s GDP has demonstrated resilience, experiencing strong growth even amidst the global pandemic downturn.

Reasons to Invest in Indonesia

1. Economic Powerhouse
   With the largest economy in Southeast Asia and the 16th largest globally, Indonesia possesses an impressive GDP exceeding US$1 trillion.
2. Robust Growth Trajectory
   Buoyed by government-driven initiatives promoting domestic and foreign investment, Indonesia’s market exports are projected to reach US$300 billion by 2024, according to Reuters.
3. Favorable Business Environment
   The Indonesian government’s commitment to economic reforms, coupled with a young, educated workforce and a strategic Southeast Asian location, creates a fertile ground for businesses.
4. Demographic Dividend
   As of 2023, 68.1% of Indonesia’s population falls within the prime working age of 15-64, offering a substantial talent pool for diverse industries.
5. Enhanced Connectivity
   Multiple special economic zones (SEZs) and active participation in ASEAN foster increased regional and international trade, solidifying Indonesia’s economic potential.

6 industry opportunities to invest in Indonesia 2024

Summarizing from Forbes, below is the list of 6 business industries that will leverage more profit in 2024.

Financial Technology & E-Commerce

Indonesia’s vast population and underserved segments present a fertile ground for fintech solutions. Despite low financial inclusion, cashless payments see steady progress. The thriving startup ecosystem fosters innovation, particularly in payment solutions, addressing logistical challenges and catering to a growing middle class.

Transportation

Indonesia’s archipelagic geography necessitates optimized logistics across various modes. This creates a dynamic market for companies innovating in this area. Additionally, abundant resources and a strong manufacturing base position Indonesia as a potential hub for electric vehicle production, fueled by government support and rising demand.

Are you interested in setup a business in Indonesia? Head over to talk to our consultants for free insights now!

Renewable Energy & Waste Management

Indonesia boasts diverse renewable energy sources like geothermal, hydro, and solar power. Growing investment in energy efficiency promises a greener future. However, transitioning away from traditional fossil fuels like coal remains a key challenge. Addressing plastic waste, especially in coastal cities, necessitates innovative solutions from startups and established players.

Education Technology

Despite a sizable education system, a skills gap exists in Indonesia. This gap translates into a significant opportunity for EdTech companies offering full courses, online tutoring, and self-learning options to help the workforce of tomorrow acquire relevant skills.

Healthcare

Universal healthcare coverage has increased access to medical services, leading to growth opportunities for hospitals and medical businesses. However, challenges like provider shortages, accessibility issues, and disparities in care require innovative solutions, with telemedicine emerging as a promising avenue due to the geographically dispersed population.

Halal Goods & Technology

As the world’s largest Muslim-majority country, Indonesia boasts a massive demand for halal products and services. Its expertise in Islamic banking, fintech, and halal goods manufacturing positions it as a potential leader in this rapidly growing market.

Already made your business decision? These 5 cities might be a potential spot to set up a business in Indonesia

Indonesian Cities beckon businesses with diverse opportunities. The following cities could become your next destination to start a profitable business in Indonesia according to your type of business.

Semarang

This bustling metropolis offers a dynamic environment for businesses across retail, food & beverage, technology, manufacturing, and tourism. Careful location selection and product/service definition are crucial for success.

Palembang

A thriving city with a rich history, Palembang presents opportunities in the tourism, food, and retail sectors. Its growing economy attracts investors, particularly in the development of new shopping malls.

Makassar

As Indonesia’s smart city, Makassar embraces technology and innovation. Small businesses are thriving, with vertical farms and data-driven economic support programs demonstrating its forward-thinking approach. This city is ideal for those seeking a collaborative environment with seamless cross-border payment processes.

Denpasar

This tourist haven offers a thriving business hub as well. Its large population, diverse culinary scene, and bustling retail options make it ideal for restaurants, cafes, and retail stores. The city’s constant influx of tourists ensures a fertile ground for success in various sectors.

Bogor

Known for its agriculture and research, Bogor presents opportunities in these fields, particularly in coffee production. With government support and potential for technological integration, this city welcomes innovative solutions for sustainable agricultural development.

Want to set up a business in Indonesia?

With Come Visit Indonesia as your trusted partner, success is within reach. We offer comprehensive consultation services to help you navigate every step of your business journey, from initial planning to smooth operation.

Our team of experienced consultants boasts in-depth knowledge of local regulations, legal requirements, and cultural nuances. We’ll guide you through company registration, decipher investment and business licenses, and ensure your operations comply with tax and accounting regulations. We even simplify immigration processes for your personnel, minimizing delays and frustrations.

Contact Come Visit Indonesia today and unlock the full potential of your Indonesian business venture. Let us guide you through every step, ensuring a successful and rewarding journey.

Are you a foreigner seeking to travel to Indonesia? Making sure to understand the latest Indonesia Visa updates is essential to be done before embarking on a trip to the country.

The new visa system mandates all visa applications to be submitted online, offering a streamlined process for your convenience. With this update, new visa codes have been introduced, each tailored to specific purposes of visit to Indonesia, including tourism, business, and more specialized permits.

We are pleased to present to you the latest Indonesia Visa regulations update starting January 2024.

New Indonesian Visa Index and Their Significance

Starting from January 9 2024, Indonesian visas are now categorized from B to E, each denoted by a combination of letters and numbers (e.g., D1, C7A, E28B). These categories entail distinct requirements, validity periods, and permissions. Let’s explore each category in detail:

Index B Visa: Visa on Arrival (VoA)

Formerly, tourists enjoyed visa-free entry to Indonesia. However, due to the COVID-19 pandemic, Indonesia now requires a Visa on Arrival (VoA) for most visitors, excluding ASEAN countries. VoA necessitates an application form and fee, which can be processed either at the airport or through an Electronic Visa on Arrival (eVoA) before arrival.

Who should apply for B Visas:

B1: Visiting friends or family

B2: Business, meetings, or purchasing goods

B3: Receiving medical treatments

B4: Dealing with government matters

Permitted stay: Up to 30 days (extendable once for an additional 30 days)

Multiple entry: No

Permitted work or wages: No

Index C Visa: Single-Entry Visit Visa

C Visas cater to specific activities beyond tourism and entail 30 different indexes for various permits. Activities include business visits, cultural performances, and non-commercial sports. While C visas allow engagement in certain activities, they do not permit working in Indonesia.

Multiple entry: No

Permitted work: No, unless specified on the visa.

Index D Visa: Multiple-Entry Visa

D Visas offer versatility, encompassing activities covered by both B and C visas. They allow for adjustable lengths and validity periods, facilitating multiple re-entries. D visas are ideal for temporary stays and offer diverse options for visitors intending to engage in a broad range of activities.

Permitted stay: Varies depending on the type of activity and visa validity

Multiple entry: Yes

Index E Visa: Limited Stay Permit (KITAS)

E visas extend beyond mere visas, including permits for working, foreign investment, family reunification, and establishing Indonesia as a second home. Despite stringent requirements, the application process is manageable.

Our Recommendations

• For Tourism: D1 Visa or 211a Visa
  
  
• For Business: С2 or D2 Visa
  
  
• For Market Research or Investment: D12 Visa
  
  
• For Digital Nomads: E33G
  
  

What You Need to Know Before Applying for an Indonesia Visa in 2024

Before embarking on an unforgettable journey, understanding the visa application process for foreign nationals is key. The following are the steps to process the right visa applications:

Know Your Visa Type

The first step is determining the appropriate visa type. Here are the most common categories:

• Tourist Visa (VOA): Valid for 30 days upon arrival, ideal for short vacations. Most nationalities qualify, but check if yours requires pre-arrangement.
  
  
• Business Visa: Applicable for work-related activities. Different options exist based on your intended duration and activities.
  
  
• Social Visa: Issued for visits sponsored by family or friends residing in Indonesia.
  
  
• Retirement Kitas: Tailored for those seeking long-term residency after retirement.
  
  

Check Eligibility and Visa Requirements

Each visa type has specific eligibility criteria and documentation requirements. Consult with Come Visit Indonesia to confirm yours. Generally, you’ll need:

1. Passport valid for at least six months beyond your intended stay.
   
   
2. Completed visa application form.
   
   
3. Proof of travel arrangements (flight tickets, hotel bookings).
   
   
4. Proof of sufficient funds for your stay.
   
   
5. Passport-sized photo.
   
   
6. Additional documents may be required depending on the visa type.
   
   

Other Information REgarding Visa to Indonesia

I plan to visit both Jakarta and Bali during my trip. Do I need separate visas for each location?

No, you don’t need separate visas for different locations within Indonesia. Your visa will be valid for the entire country, regardless of where you travel within its borders.

 I’m interested in a multiple entry visa. Can I apply for one at the airport in Jakarta?

Currently, multiple entry visas are not available for issuance upon arrival. You need to apply for it beforehand at an Indonesian embassy or consulate in your home country.

How long does it typically take to process a visa application?

Processing times can vary depending on your nationality and the type of visa you apply for. Generally, it takes around 3-5 working days for a single entry visa and slightly longer for a multiple-entry visa.

Are there any countries that are eligible for visa exemption to travel to Indonesia?

While there isn’t a single “free visa” program for Indonesia, several nationalities can enter the country without obtaining a visa beforehand. As of February 2024, here are some countries whose citizens enjoy visa-free entry to Indonesia:

Visa-free for 30 days:

1. Brunei
2. Cambodia
3. Hong Kong (SAR)
4. Japan (e-passport holders only)
5. Laos
6. Macau (SAR)
7. Malaysia
8. Myanmar
9. Philippines
10. Singapore
11. Thailand
12. Timor-Leste
13. Vietnam

Can I apply for an online visa (e-Visa) for travel to Indonesia?

Yes, Indonesia offers e-Visas for both single and multiple entries. You can apply online through the official Indonesian immigration website (evisa.imigrasi.go.id).

I’ve heard about a new tourist levy for Bali. What do I need to know about it?

Effective February 14, 2024, the Bali Provincial Government implemented a Bali New Tourist Levy for all foreign visitors entering Bali for tourism purposes. This one-time fee of IDR 150,000 (approximately USD 10) must be paid prior to arrival through the official “Love Bali” website or app.

With Come Visit Indonesia, Assistance is a Click Away

Navigating visa processes can be complex. Come Visit Indonesia offers expert assistance throughout the application process, ensuring swift approvals and saving you valuable time.

• Visa type selection and eligibility guidance.
  
  
• Application form review and completion assistance.
  
  
• Document gathering and verification.
  
  
• Online application submission and support.
  
  
• Liaison with immigration authorities if needed.
  
  

Choosing the right visa is paramount for a hassle-free visit or seamless business operations in Indonesia. While visas can be acquired electronically, our team at Come Visit Indonesia is here to provide expert assistance, ensuring a smooth process and avoiding any potential hurdles.

Let Come Visit Indonesia be your reliable partner for a seamless visa application experience. Start planning your Indonesian adventure today. Contact us for personalized guidance and support on your Indonesia relocation journey!