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Incorporate New Company (PT/PMA) in Indonesia: 12 Important Legal Terms

12 Must Know Legal Terms

Understanding a regulation is not an easy job to do. Understanding various legal terms is a challenge on its own.
Here is a list of definitions within the legal terms to help you navigate around the regulations of company’s incorporation. 

Legal entity which constitutes an alliance of capital which is divided into shares and stated in a form of a contract

Article of Associations

Document contains the purpose of the company as well as duties and responsibilities of its members. It also contains the name of the shareholders who have subscribed the shares and detailed nominal value of each shares


Nomor Pokok Wajib Pajak is Tax Obligation Main Number, a number issued to tax payers by the tax office to identify taxpayers and to assist them in fulfilling their tax

Issued Capital

The number of shares own by the shareholders

Authorized Capital

The total accumulated value of shares, or the initial money required to set up a new company


Surat Izin Usaha Perdagangan is Trades Business License, a license for company to conduct business in Indonesian territory. It will be classified to different kinds of SIUP depends on the amount of the authorized capital


Surat Keterangan Domisili Perusahaan is Company Domicile Certificate, a domicile letter you will get on Kelurahan (administrative village) and Kecamatan (subdivision of a city)


Company Compulsory Registration

Paid Capital

25% of the authorized capital that needs to be transferred to the company’s bank account (proven by lawful evidence)


It is General Shareholders Meeting of the company, held at least annually to elect members of the board of directors and commissioners, and hears report on the business financial situation as well as new policy initiatives

Establishment Deed

Notarial deed of the establishment of the company, made in Indonesian language and consists of company’s profile as well as personal data of the shareholders and Article of Association

Ministerial Ratification

Decree contains a ratification of the company as a legal entity

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