One of the main priorities of the Indonesian government is to attract foreign investment into the country. Indonesia Investment Coordinating Board (BKPM) targeted $64.7 billion worth of foreign investment in 2020. Apart from streamlining the investment procedures and relaxing various restrictions for foreign investors on business activities, Indonesia introduced a new and extremely popular visa category for investors known as Investor KITAS.
The Investor KITAS is a visa specifically designed for foreign business investors which allows them to live and operate their business in Indonesia. Below I have made a list of most asked questions by foreigners related to investor KITAS to help foreigners better understand and save time when applying for investor KITAS.
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Any company in Indonesia that has one or more foreign shareholder is a PT PMA (Perseroan Terbatas Penanaman Modal Asing) which means a “limited liability company with foreign direct investment. The company will still be a PT PMA even if the foreign shareholding is only 1%.
There are various factors that foreigners must consider incorporating a PT PMA in Indonesia. In this article, we will discuss all those factors that foreign investors should consider so that no costly mistakes are made during the PT PMA incorporation.
FREQUENTLY ASKED QUESTION ON INVESTOR KITAS – ANSWERED BELOW
1. What is investor KITAS?
Investor KITAS is an Indonesian stay permit specifically available to those foreigners who have invested in Indonesia through the establishment of a Foreign Investment Company (PT PMA). With investor KITAS, a foreign investor can stay and operate their business.
2. Who are investors?
Investors in the context of Investor KITAS are the foreigners who are shareholders in a Foreign Investment Company (PT PMA) in Indonesia. It is important to note that investors in the context of an application for investor KITAS are those that meet the minimum shareholding requirement which is explained below.
3. What are the minimum requirements for investor KITAS?
- The company sponsoring Investor KITAS should have authorized capital of at least IDR 10 billion.
- The Paid-up capital of sponsoring company should be at least 25% of its authorized capital.
- The investor should have a minimum shareholding of IDR 1.125 billion, or
- The investor who is holding a position of director in addition to being a shareholder should have a minimum shareholding of IDR 1 billion.
4. How long is the validity of Investor KITAS?
There are two types of investors KITAS – C313 and C314. The validity of C313 investor KITAS is one year and that of C314 investor KITAS is two years.
5. What is the passport validity requirement for investor KITAS?
Passport must be valid for at least 18 months to apply 1-year investor KITAS however the passport validity should be 30 months to apply 2-years investor KITAS.
6. What are the advantages of Investor KITAS?
- There are various advantages of investor KITAS. The requirements for the investor KITAS are simpler than those for work permit KITAS. Work permit KITAS requires the applicant to provide a long list of documents such as references from the previous employer, CV, bank statement, education transcripts etc. There are no such requirements for investor KITAS and therefore less paperwork involved.
- The timeline to obtain investor KITAS is around 2 to 3 weeks while it takes around 2 months to obtain a work permit.
- Unlike work permit KITAS, there is no need to pay $100 per month to the Ministry of Human Resource
- Investor Kitas can be extended.
- It is possible to convert investor KITAS (limited stay permit) to Investor KITAP (Permanent Stay Permit)
- Investors with investor KITAS can also sponsor the dependents which includes spouse and children below the age of 18.
7. How to apply for investor KITAS?
- The first step is the preparation of required documents for the application of investor KITAS. This includes the documents from the applicant such as passport copy as well as the documents of sponsoring company such as the deed of establishment, business license and tax registration number. The applicant will need to sign the application form.
- After the documents are ready and the required forms have been filled and signed, the application will be submitted to the Immigration office in Indonesia.
- If the application is successful, the applicant will get E-visa.
- After receiving the Evisa, the applicant will be allowed to travel to Indonesia with that Evisa.
8. Can directors and commissioners also apply for investor KITAS?
Directors or commissioners can also apply for investor KITAS as long as they are also a shareholder in the company and meet the minimum shareholding requirements as discussed above. A person who holds the position of only director or commissioner cannot apply for investor KITAS.
9. How long does it take to apply Investor KITAS?
The whole process of investor KITAS application takes around 2 to 3 weeks. It can take longer especially if there are any public holidays during which offices are closed. It is important to note the upcoming Public Holidays and plan the investor KITAS application accordingly.
10. Are foreigners allowed to work on Investor KITAS?
A foreigner with investor KITAS who is a director in the company in addition to being a shareholder is allowed to work if the following criteria are satisfied:
- Director can only engage in that tasks that are under the scope of business activities of the sponsoring company.
- The sponsoring company provides equal opportunities to all Indonesians to work.
Some business activities are partially or fully restricted for foreign investors. This means that foreigners are not able to establish companies with those restricted businesses activates and hence they are not able to get an Investor KITAS. The Indonesian Government has issued a Priority Investment List which lists all those activities which are open, partially closed or fully closed for foreign investors. It is therefore important to make sure that business activity which foreign investor intends to do is not restricted before planning to incorporate a foreign investment company and get company-sponsored Investor KITAS.
Another extremely important point to note is that when foreign investors are establishing a company in Indonesia, they should ensure that all the information of directors, shareholders and other board members is written correctly in the company documents without any mistakes. If there is any mistake in the company documents, this will create a problem in the application of investor KITAS. In such a case, foreigners will have to correct the company documents first before applying the investor KITAS.
The process of establishing a foreign investment company can easily become complicated if there are specific rules governing the intended business activity. Another factor that can add to this complexity is the special licenses required. For instance, those foreigners who are involved in mining, pharmaceutical and education are required to get specific business licenses after incorporation of the company before they can start the business operations. It is therefore advisable to consult the market-entry specialists who can assist in navigating the complex laws and regulations.
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MAM Corporate Solutions has expertise in applying for all types of Indonesian visas. If you need an Investor KITAS, you can contact our expert anytime by Clicking here or provide below as much detail about your inquiry as possible to receive the most relevant response.