business in bandung guide

How to Start a Business in Bandung?

  • InCorp Editorial Team
  • 13 May 2020
  • 3 minute reading time

As one of the fastest-growing and the most creative cities in Indonesia, Bandung’s future is bright. Entrepreneurs and investors are jumping at the business opportunities in Bandung to participate in the growth story of the capital city of West Java.

The reasons Bandung stands out from the crowd as a highly attractive destination for foreign investments and economic prospects are underpinned by its developed facilities and infrastructure, innovative expansions, abundant natural resources, large workforce, technologically-advanced measures, and improved legal and business environment.

The top sectors to do business in Bandung that have sparked the most interest of foreign investors are tourism and hospitality, IT and digital industries, and other creative sectors.

According to The Investment Coordinating Board (BKPM), in the first quarter of 2019, the total investment of Indonesia hit IDR195 trillion, a 5.3% growth as compared to the same period in 2018. Out of the IDR195 trillion of total investment, approximately IDR 108 trillion (more than 50% of the total investment) came from foreign investments.

BKPM also added that the top five investment realisations for both local and foreign investments based on project locations in 2019 were West Java, Central Java, East Java, DKI Jakarta, and Banten. Among these five locations, West Java had the highest investment realization amounted to IDR 37.3 trillion. The majority of the foreign investments were from China, Singapore, Japan, Hong Kong, Taiwan, and Malaysia.

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How to Start a Business in Bandung

There is a friendly and favorable business environment in Bandung that has propelled the emergence of startups and foreign companies.

To jump into the booming business scene in Bandung, a legal company registration is the first step towards your successful investment.

In Bandung, three common legal entities are available for foreigners to choose from based on your business requirements and capabilities.

1. Foreign Company (PT PMA)

First and foremost, you can consider a Perseroan Terbatas Penanaman Modal Asing or PT PMA. A PT PMA in Bandung is a foreign-owned company, allowing an investor to own up to 100% foreign shares in the company.
However, the percentage of foreign ownership in the PT PMA varies greatly based on the business classification stated in the Indonesian Negative Investment List.

2. Local Company (PT)

A local company allows only 100% of local ownership. This means that foreign ownership of even 1% is not allowed.

3. Representative Office

Setting up a business in Bandung through the form of a representative office is the fastest and easiest way for most foreigners. There is no capital requirement for this type of legal entity but business activities related to profit generation are forbidden.

Outsource Business Process after Setting Up a Business in Bandung

After you have incorporated your business in Bandung, you can outsource your business for your peace of mind.

Outsourcing your business can bring efficiency and you can focus on bringing your business to succeed in Bandung’s prospering business environment. You will have a new level of agility and access to expertise and technology that can be integrated into your business, enabling you to get ahead of other competitors.

What Cekindo can Offer

As a reputable consulting company in Indonesia, Cekindo offers one-stop solutions for all types of businesses. Ranging from business setup to business process outsourcing, Cekindo’s services can be customised to satisfy your unique business requirements.

Be in touch with Cekindo for a free and no-obligation discussion by filling in the form below.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

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We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.

We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

Frequent Asked Questions

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.