Overview of Accounting Practice and Environment The history of Indonesian Generally Accepted Accounting Principles began when the Indonesian Accountants Association (abbreviated to IAI), established in 1957, was appointed by the Government of Indonesia in 1984 to develop accounting standards in Indonesia to be used mostly for Limited Liability Partnership. IAI then established a committee to… Read More

Tax system New lawsThe current framework of Indonesia’s tax laws dates from 1983 with subsequent revisions, most recently in 2007. There are separate laws covering income tax, value added tax (VAT) and sales tax on luxury goods. Other tax laws include the law on the taxing of land and buildings and the law on stamp… Read More

Immigration and employment of expatriates VisasIndonesia issues a range of different classes of visa depending on the purpose of a foreigner’s visit. Short visit visas valid for 60 days may be issued on arrival at an official entry point to passport holders from most developed and neighbouring countries. The passport’s validity should be at least… Read More

Legal Entities There is a collection of recognised legal entities for setting up a business in Indonesia: Persekutuan Perdata (PP) is a partnership between two or more people in one agreement to make a profit. Firma (Fa) is a partnership between two or more people in one agreement to make a collective name to deal… Read More

The Banking and Foreign Exchange System Exchange rates are issued by the Central Bank on a daily basis for commercial banking purposes. However, for tax purposes (in calculating the Indonesian income tax liability on foreign currency income) the exchange rates are issued on a weekly basis by the Indonesian Ministry of Finance. Foreign exchange controls… Read More

Indonesia can be considered one of the richest countries on Earth in terms of its biological diversity. The country is located between Asia and Australia, and comprises more than 17,000 islands that stretch 5,000 km from east to west. Because of its complex geographical make‐up and unique biogeographical position, Indonesia has enormous ecosystem diversity as… Read More

Once the shareholders have completed the Model I/PMA-form and affixed their signatures, the application will be reviewed, and when the BPM or other institution feels that all the information and documents provided are sufficient, then it shall be declared “complete”. This process involves much cross checking between the BPM and other Ministries and will be… Read More

According to the new Decree of the State Minister of Investment / Head of Investment Board Number 38/SK/1999 dated October 6, 1999, to obtain approval for setting up a PMA Company, the shareholders should complete and submit two copies of the Model I/PMA-form to the BPM, or Indonesian Embassy or Consulate General or Consulate (where… Read More

The Indonesian Government periodically issues what is known as the Negative List of Investment (Daftar Negatif Investasi or “DNI”). The DNI provides the list of area in which foreign investors are prohibited or restricted to enter into business in Indonesia. In concept, any area that is not listed in the DNI is open for foreign… Read More

The Investment Board (Badan Penanaman Modal or shortly known as “BPM”) is assigned to assist Indonesian Government in handling the foreign / domestic investment matters in Indonesia. In general, BPM among others has the following functions: To formulate investment policies and convey them to the President of the Republic of Indonesia for approval. To coordinate… Read More