GENERAL PROCEDURE

FOR ESTABLISHMENT OF FOREIGN INVESTMENT COMPANY

1. OBJECTIVES
The purpose and objective of this procedure is to provide the Investor with sufficient information on the procedure of and documents needed for the establishment of Foreign Investment Company in Indonesia.

2. SCOPE
The procedure set forth in this document is based on relevant regulations and common practices in Indonesian governmental institution. These procedure shall only apply to the establishment process of a Foreign Investment Company in Indonesia started from the Application for Investment Registration to Investment Coordinating Board (BKPM) to the obtaining of Company Register (TDP). This documents do not describes the processes after the obtaining of TDP, the processes of the Representative Office establishment or processes in obtaining technical licenses or permits.

3. ABBREVIATION
The following abbreviations shall be interpreted as follows: 3.1. 3.2. 3.3. 3.4. 3.5. 3.6. 3.7. 3.8. 3.9. 3.10 . 3.11 . 3.12 . 3.13 . 3.14 . AOA BOD BOC GMS BKPM BPS KBLI DNI MOLHR SP NPWP KPP SKDP TDP : : : : : Articles of Association Board of Directors Board of Commissioner General Meeting of Shareholders Investment Coordinating Board

(Badan Koordinasi Penanaman Modal) (Badan Pusat Statistik) (Klasifikasi Baku Lapangan Usaha Indonesia) (Daftar Negatif Investasi) (Surat Pendaftaran) (Nomor Pokok Wajib Pajak) (Kantor Pelayanan Pajak) (Surat Keterangan Domisili Perusahaan) (Tanda Daftar Perusahaan)

: Central Statistic Body : Indonesian Standard Industry Classification : Investment Negative List : Minister of Law and Human Rights : Registration Certificate : Taxpayers Number : Tax Office : Domicile Certificate : Company Register

4. REFERENCE
4.1. Law Number 25 of the year 2007 concerning the Investment; 4.2. Law Number 40 of the year 2007 concerning Limited Liabilities Company; 4.3. Law Number 3 of the year 1982 concerning the wajib Compulsory Company Registration; 4.4. Presidential Decree Number 36 of the year 2010 concerning the List of Closed Business Sector and Open with Condition for Investment (DNI/Daftar Negatif Investasi); 4.5. Head of BPS Decree Number 57 of the year 2009 concerning the Indonesian Standar Industry Classification (ISIC/KBLI); 4.6. Head of BKPM Decree Number 12 of the year 2009 concerning Investment Application Guidelines and Procedure;

4.7. Minister of Law and Human Rights Decree Number M.01-HT.01.10 year 2007 concerning the Procedure on the Application of Legal Entity Legalization and the Approval of the Articles of Association Amendment, the application of Notice of Articles of Association Amendment and the the Companys Data; 4.8. Directorate General of Taxation Decree number 44/PJ/2008 concerning the Procedure of Taxpayers Number Registration and/or the Taxable Entrepreneur Confirmation, the Change and Transfer of Taxable Entreperneurs and/or Taxpayers Data and its amendments. 4.9. Minister of Trade Number 37/M-DAG/PER/9/2007 concerning the Implementation of the Company Register;

5. PROCEDURES
5.1 Confirmations on Business Sector and the availability of the Companys name.

Before obtaining relevant approvals and permits of the Companys establishment, the founders of the Company shall confirm the followingt matters : 5.1.1 The availability of Business Sector for foreign investment. The founders (foreign investors) need to confirm whether the Business Sector is available for foreign investment or not. DNI and other relevant applicable regulations forbid or limit, with some exceptions and requirements, the foreign investment in the several Business Sectors. Therefore, to determine wheteher such business sector are available for foreign investment or not, the following non-legal documents are needed : a. detailed descriptions of the business activities of the Company; b. the scheme of production process of the Company (if applicable).
5.1.2

Propose the Companys Name To ensure the name of Company is available, the founders of the Company which represented by the notary can apply to the MOLHR to reserve the proposed name for the Company. The confirmation on the availability of the Companys name will be issued by the MOLHR within 15 days after is valid for 60 days after its issuance.

5.2 Application for Investment Registration

In the case that the Business Sector is available for foreign investment, the Investment Registration can be done in the BKPM by submitting the duly stamped Application and the supporting documents to obtain SP. The supporting documents are : a. Letter of Recommendation issued by the Embassy/Representative Office of the relevant country (for foreign Government applicant); b. Copy of Valid Passport (for foreign Individual applicant); c. Copy of Articles of Association of the company in english (for foreign company applicant); d. Copy of valid Identity Card (KTP) and Copy of Taxpayers Number Card (NPWP) (for Indonesian Individual applicant); e. Copy of Deed of Establishment and its amendments, Copy of Approval from MOLHR and Copy of Taxpayers Number Card (NPWP) (for Indonesian legal entity applicant). f. duly stamped Power of Attorney from all of the investors. The SP shall be issued 5 (five) working days after the obtaining of the completed application receipt. Note : - the scheme of production process of the Company as stated in 5.1.1 may required by the BKPM officials 5.3 Deed of Establishment

Upon the obtaining of the SP, the notary will then draft the Deed of Establishment. Fixed draft of Deed of Establishment will be signed and then be registered to the MOLHR. Note : - The member of Director who may represent the Company need to be cleared;
5.4 The Legalization of the Deed of Establishment

To obtain Legalization from MOLHR, the Deed of Establishment shall be submitted electronically within 60 (sixty) days after the signing of the Deed of Establishment by the notary. Upon the submission, the MOLHR will verify the Deed of Establishment which the verification result will be announced 30 (thirty) days after the electronic submission. In the case that the verification result approve the Deed of Establishment, the notary shall submit the hardcopy of the Deed of Establishment enclosed with the following document : a. The amendment of the Deed of Establishment (if any); b. Payment receipt of : 1) the approval for the using of companys name using; 2) the legal entity of the Company legalization; and 3) the publishing in the Additional State Gazette of Republic of Indonesia
c.

receipt of paid-up capital 1) Payment slip or bank statement on the name of the Company or the joint account on the name of the founders or the Statement Letter signed jointly by all of the Directors, founders and Commissioners stating that the Capital has been paid (for the capital in the form of money). 2) Statement Letter from the unaffiliated expert or purchase receipt (for capital in the any form except money) and also announcement in the daily newspapers for immovable assets; 3) Governmental Regulations and/or Minister of Finance Decree (for a state owned enterprise); or 4) Balance of the Company or Balance of the non-legal entity business entity invested as the capital contribution.

d. Domicile Letter of the Company issued by the building management or Statement Letter

regarding the address of the Company signed jointly by all of the Directors, founders and Commissioners of the Company, and e. Other relevant documents from relevant government institution in accordance with to the law. The Legalization from MOLHR shall be issued within 7 (seven) days after the submission of the hardcopy of the Deed of Establishment. In total, this process may take more than 37 (thirty seven) days. However, in order to facilitate the Company in obtaining other required licenses or permits, the notary may issue Statement Letter stating that legalization process of the Companys Deed of Establishment is in progress.
5.5 Obtaining of SKDP

SKDP (Domicile Certificate) is issued by the sub-district where the head office of the Company is domiciled. The SKDP is needed for the obtaining of NPWP and TDP of the Company and mostly be valid for 1 (one) year. The documents needed for the obtaining of SKDP are as follows : a. Copy of the SP from BKPM b. Deed of Establishment of the Company (and the Statement Letter from the notary)

c. Domicile Letter from the Building Management (if located in Office Building) d. Identity Card (or Passport for non-Indonesian) of the Director of the Company

e. Power of Attorney (if such application executed by third party) Some sub-district might require more documents. The SKDP will be issued in 4 (four) working days. 5.6 Obtaining of NPWP NPWP (Taxpayers Number) is issued by the KPP (Tax Office) in the region where the Company is domiciled. To obtain NPWP of the Company, the NPWP of a member of the BOD is needed. The following documents are required : 5.6.1 For obtaining the NPWP of the member of the BOD a. Identity Card (KTP) or Passport and KITAS (if any) of the applying Director; b. Power of Attorney; and c. Completed NPWP application form. Several KPP provide non-official domicile statement letter form to replace the function of KITAS.
5.6.2

For Obtaining the NPWP of the Company a. Copy of the Deed of Establishment of the Company and the statement letter from the notary; b. Copy of SP from BKPM; c. Copy of SKDP from sub-district office; d. Copy of the NPWP of the Director; e. Copy of the Identity Card or Passport of the Director; f. Power of Attorney; and g. Completed NPWP Application form.

Most KPP will issue NPWP card after 3 (three) days from the receiving completed document. 5.7 Obtaining of TDP TDP is issued by the Trade and Industry Service of the Municipal or Regency where the Company is Domiciled. The following Documents are needed :
a. Copy of Deed of Establishment of the Company and its amendment;

b. Copy of Approval from MOLHR or Statement Letter from notary. c. Copy of SP from BKPM; d. Copy of Other Technical Permit (if any); e. Copy of the SKDP from sub-district; f. Copy of the Identity Card (or Passport for non Indonesian) of the Director; g. Completed application form duly stamped and signed by the Director; and h. Power of Attorney and Identity Card of the Proxy (if the Company Registration executed by the third Party) TDP will be issued after 2 (two) weeks and shall be valid for 5 (five) years. The extension of TDP need to be done at least 3 (three) month before the expiry date.

PERMIT AND LICENSES CHECKLIST Completed ** yes no :

No. I. SP BKPM 1 . * 2 . * 3 . * 4 . * 5 . * 6 . *

DOCUMENTS

Letter of Recommendation issued by the Embassy/Representative Office of the relevant country (for foreign Government applicant); Copy of Valid Passport (for foreign Individual applicant); Copy of Articles of Association of the company in english (for foreign company applicant); Copy of valid Identity Card (KTP) and Copy of Taxpayers Number Card (NPWP) (for Indonesian Individual applicant); Copy of Deed of Establishment and its amendments, Copy of Approval from MOLHR and Copy of Taxpayers Number Card (NPWP) (for Indonesian legal entity applicant). duly stamped Power of Attorney from all of the investors.

: :

II. REGISTRATION FROM MOLHR

1 . Deed of Establishment and its amendment (if any); 2 Payment receipt of : . 1) the approval for the using of companys name using; 2) the legal entity of the Company legalization; and 3) the publishing in the Additional State Gazette of Republic of Indonesia 3 . receipt of paid-up capital

: :

4 . Domicile Letter of the Company issued by the building management or Statement Letter regarding the address of the Company signed jointly by all of the Directors, founders and Commissioners of the Company 5 . * 6 . * Domicile Letter of the Company issued by the building management Statement Letter regarding the address of the Company signed jointly by all of the Directors, founders and Commissioners of the Company

7 Other relevant documents from relevant government . * institution in accordance with to the law III. OBTAINING SKDP 1 . 2 . 3 . 4 . 5 .

: Copy of the SP from BKPM Deed of Establishment of the Company (and the Statement Letter from the notary) Domicile Letter from the Building Management (if located in Office Building) Identity Card (or Passport for non-Indonesian) of the Director of the Company Power of Attorney (if such application executed by third party) :

IV. OBTAINING NPWP OF DIRECTOR 1 . 2 . 3 . Identity Card (KTP) or Passport and KITAS (if any) of the applying Director; Power of Attorney; : Completed NPWP application form. :

V. OBTAINING NPWP OF COMPANY 1 . 2 . Copy of the Deed of Establishment of the Company and the statement letter from the notary; Copy of SP from BKPM; :

3 . 4 . 5 . 6 . 7 .

: Copy of SKDP from sub-district office; : Copy of the NPWP of the Director; : Copy of the Identity Card or Passport of the Director; : Power of Attorney; : Completed NPWP Application form

VI. OBTAINING TDP 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . Copy of Deed of Establishment of the Company and its amendment; Copy of Approval from MOLHR or Statement Letter from notary. Copy of SP from BKPM; : Copy of Other Technical Permit (if any); : Copy of the SKDP from sub-district; Copy of the Identity Card (or Passport for non Indonesian) of the Director; Completed application form duly stamped and signed by the Director; and Power of Attorney and Identity Card of the Proxy (if the Company Registration executed by the third Party) : :

SCHEME OF ESTABLISHMENT BKPM

Confirmation of Business Sector availability

Registration of Investment to obtain SP

Application Form & Doc I

Correction of Application by Officials

Application Accepted, Obtain Receipt

Obtaining of SP

Notary

Signing of Deed of Establishment

Drafting of Deed of Establishment

MOLHR

Confirmation of the Name of Company

Doc II

Registering of Deed of Establishment by Notary

OfficeSub-District

Obtaining SKDP

Applying for SKDP

Doc III

Tax Office

Obtain the NPWP of Company

Apply for NPWP of Company

Application Form & Doc V

Obtain the NPWP of Director

Apply for NPWP of Director

Application Form & Doc IV

ServiceTrade and Industry

Apply for TDP

Application Form & Doc VI

Obtain the TDP

ESTIMATED TIME Date SP BKPM AOA Drafting MOLHR Verification MOLHR Approval SKDP NPWP Director NPWP Company TDP Day in this table shall be working days Started from the obtaining of Application Acceptance Receipt - formal process to obtain TDP supposed to be 1 month (30 days) however, some officials agreed to receive under table money to accelerate the process