Letter Of Incorporation Template for Indonesia

When establishing a company in Indonesia, you need a Letter of Incorporation to legally form your Perseroan Terbatas (PT). This foundational document serves as your company's birth certificate and is mandatory under Indonesian corporate law. The Letter of Incorporation contains all essential information about your company's structure, objectives, and governance framework that will guide your business operations.

When do you need this document?

You need a Letter of Incorporation when forming any limited liability company in Indonesia, whether you're a local entrepreneur starting a domestic business or a foreign investor establishing an Indonesian subsidiary. This document is required before you can obtain business licenses, open corporate bank accounts, or commence commercial operations. You'll also need it when converting from another business structure to a PT, establishing a joint venture company, or setting up a holding company structure. The document becomes essential during due diligence processes for future investments or acquisitions.

Key legal considerations

Your Letter of Incorporation must include specific mandatory clauses covering company name, domicile, business objectives, authorized capital, and board composition. The company name must comply with Indonesian naming conventions and cannot conflict with existing registered entities. Business objectives must align with the Indonesian Standard Industrial Classification and clearly define permitted activities. Capital structure provisions must specify authorized, issued, and paid-up capital amounts, along with detailed shareholding arrangements. Management structure clauses must outline the Board of Directors and Board of Commissioners composition, including their powers and responsibilities. The document must also address share transfer restrictions, dividend policies, and dissolution procedures.

Legal requirements in Indonesia

Under Law No. 40 of 2007 on Limited Liability Companies, your Letter of Incorporation must be prepared by a licensed Indonesian notary public who will authenticate the document. The minimum authorized capital requirement varies by business sector, with general requirements under Government Regulation No. 29 of 2016. Foreign ownership restrictions apply based on Indonesia's Negative Investment List, limiting foreign shareholding in certain sectors. You must submit the notarized document to the Ministry of Law and Human Rights for approval and legal entity status ratification within 60 days of execution. The approved document must then be registered with local authorities and published in the State Gazette to complete the incorporation process.