Formation of Company in Indonesia: Stages of Formation

The formation of company can be compared to the metamorphosis of a butterfly. Before it gets to the blooming stage, it is a larva. When you just start your business, you can’t expect it to be blooming right away. It has to undergo some stages first. Registering a Company in Indonesia is the first task you need to do.

What are these stages and what happens exactly at each stage? Let’s discuss them one by one with you.

Before Any Business Blooms, the Formation of a Company Happens in Different Stages

  1. Promotion Stage. This is the first stage in the formation of a company. This is when you need to do different activities to establish a business like putting a banner on the location where you’re going to situate your company. Aside from that, you can also publicise your products and services that you’re about to offer once your business is open. You are doing all of these to increase your possible sales in the future and your public awareness.
  1. Registration or Incorporation Stage. This is the mandatory stage of the formation of a company. This is where you need to decide what should be the name of your business, its location, preparation of the necessary documents for incorporation, which you are going to submit to authorised agencies.
  1. Capital Subscription Stage. This is the stage in the formation of a company where the owner will decide on the capital structure of the business. The primary objective is to collect the necessary fund in order to open and run the company. There are two possible scenarios here. The owner can go for an open stock, where they can ask the public if they want to buy shares from them.

Another option for the company is the closed stock, where they will just select a few people for themselves to buy shares.

  1. Commencement of Business Stage. When you’re already at this stage, it means you’re all set to start your business. The activities for this stage are collecting the necessary papers for incorporating the business and having it registered to the right government agency.

In Indonesia, there are three business types to choose from. These are the local-owned, foreign-owned, and the representative office. The most feasible type for foreigners is the foreign-owned type.

Since there are a lot of business sectors like tourism, education, construction, etc., the company has to narrow down its choice by selecting a preferred sector, then, deciding the specific business. For example, in the tourism sector, you can go to a hotel business or restaurants.

Do You Need Company Formation Services in Indonesia?

If you are looking for assistance when starting a company in Indonesia, you can contact 3E Accounting. They are among those known companies that can help you with your register of company in Indonesia.

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