Company Incorporation Differences Between Indonesia and Singapore

With some of the employment and business opportunities, it’s no surprise both Indonesia and Singapore are among the top investment destinations in Southeast Asia. These dynamic countries attract foreign investors worldwide to establish a business. Ever wondered how different countries handle company incorporation in Southeast Asia? This article is for you.

Company Incorporation in Southeast Asia: Indonesia vs Singapore

The following table summarises all the important information you need regarding company incorporation in both countries before going deeper into each most relevant topic.

1. Foreign Ownership

Regarding the company incorporation, the Singapore government permits foreign ownership of 100% for private limited companies. In other words, a local partner is optional if you want to establish a company in Singapore. You just need to appoint a shareholder and a resident company director.

Indonesia offers a different scheme than Singapore in this regard. A foreigner can have a 100% foreign limited liability company or a joint-venture limited liability company that requires at least 5% of local shares.

Furthermore, foreign investors must look at Positive Investment List to conduct business accordingly.

2. Requirements

The Singaporean government requires foreign investors to meet minimum requirements before they set up company incorporation and run their businesses.

These requirements include appointing a resident company secretary and a director with an employment pass certificate, having between 1 and 50 shareholders, and showing S$1 paid-up capital.

The requirements for company incorporation in Indonesia are stricter. You need to set up a commissioner and have paid-up capital of IDR 10 billion.

3. Company Incorporation Procedure

Due to its effective process and system, you can go through company registration in Singapore quickly and efficiently. There are also fewer red tapes that you need to deal with, making an even more hassle-free incorporation procedure. A 24-hour incorporation process is normal in Singapore.

However, the company registration process in Indonesia can take up to 1.5 months. This tedious and complex process sometimes poses a great challenge for foreigners intending to establish a business in Indonesia.

Therefore, company incorporation should not be done without advice from a professional advisor, as they can ensure you have all the necessary paperwork and comply with all the requirements.

4. Employment

Singapore’s workforce is mostly highly skilled with good command of English, and that’s why Singaporeans are preferable for foreign companies’ employment in the country. For foreigners working in Singapore, they must first acquire a work permit. There are many steps and costs involved. Hence it is crucial for businesses to fully understand the application process.

As for Indonesia, the local workforce is less qualified or highly educated than in Singapore. Therefore, many foreign companies are still seeking foreign talent from outside Indonesia. Work permits are also required for foreigners with more restrictive quotas.

5. Tax Obligations

In Singapore, companies can enjoy low corporate tax between 0 and 17%. Furthermore, Singapore has a wide range of tax treaties with more than 60 countries worldwide, allowing companies to enjoy even more tax benefits. 

Singapore doesn’t have a VAT and uses Goods & Services Tax (GST) at 8%, which will increase to 9% on 2024

In Indonesia, the corporate tax rate is between 1% and 25%. Your corporate tax rate percentage depends on your profit level and industry. Indonesia has tax treaties with over 64 countries worldwide, benefiting foreign investors. The value-added tax (VAT) in Indonesia is 11%.

Company Registration in Indonesia from Singapore with InCorp Indonesia

Even though it is easier to set up a company in Singapore, Indonesia makes an enticing investment destination because of its huge population, growing middle class, low operational and labor costs, and diverse landscape, among others.

As a business owner in Singapore interested in expanding to Indonesia, you may be concerned about having to fly to Indonesia to take care of the company registration process.

You do not have to visit Indonesia if you choose Cekindo as your business incorporation specialist in Singapore.

As part of In.Corp Group in Singapore, one of the largest Asian-based corporate service providers, Cekindo has assisted with 20,000+ entity incorporations in the last decade and successfully completed 12,000+ compliance transactions every year.

Our expert advisors in Singapore will handle the entire company registration process. We can also assist you in business licensing, visas and permits, banking, and other legal and business formalities per Indonesian law.

Reach out to us, and we’ll gladly assist with company incorporation in Indonesia. Complete the form below.