CV vs PT in Indonesia: Liability, Tax and Which to Choose
CV vs PT in Indonesia compared: who carries the debts, how each is taxed now the 0.5% rate is closed to new CVs, and how a CV moves into a PT.
References (9)
- Kitab Undang-Undang Hukum Dagang (KUHD, the Commercial Code), Staatsblad 1847 No. 23, read in the Ministry of Finance's Indonesian translation. Articles 19, 20 and 21.
- Permenkum No. 25 Tahun 2025 on the registration of civil partnerships, firms and CVs, in force 13 October 2025. It revokes Permenkumham No. 17 Tahun 2018. Articles 1, 2, 4, 5, 8 and 15.
- UU No. 40 Tahun 2007 (the Company Law), as amended by UU No. 6 Tahun 2023. Articles 1, 3, 7(1) and 7(4), 32, 33, 34, 153A and 153J.
- PP No. 8 Tahun 2021 on authorised capital and the perseroan perorangan. Articles 5, 6 and 9.
- Permenkum No. 49 Tahun 2025 on company filings, in force 17 December 2025.
- UU No. 25 Tahun 2007 (the Investment Law). Article 5.
- UU No. 28 Tahun 2007 (the General Tax Provisions Law). Article 1, point 3.
- Income Tax Law (UU PPh), as amended by UU No. 7 Tahun 2021. Articles 4(3)(i), 9(1)(j), 17(1)(b) and 17(2c).
- PP No. 55 Tahun 2022 as amended by PP No. 20 Tahun 2026, in force 22 April 2026. Article 57, and Article II with its elucidation.
For a new locally owned business, the choice in CV vs PT in Indonesia is between a PT (Perseroan Terbatas, a limited company) — a local PT, or PT PMDN (Penanaman Modal Dalam Negeri), for two or more Indonesian founders, or a PT Perorangan for one founder at small scale — and a CV.
A CV (persekutuan komanditer, a limited partnership) still exists and suits partners who want a partnership. Under Article 5(2) of UU 25/2007 (Undang-Undang, the Investment Law), foreign investment must be made through a PT unless a law provides otherwise, so a CV is for Indonesian investors. A foreign founder should read our guide to the types of company in Indonesia instead.
What a CV is, and how a PT differs
A CV needs at least two people. One or more active partners (sekutu komplementer) run the business and act for it. One or more silent partners (sekutu komanditer) put in capital (KUHD, the Commercial Code, Article 19). A CV is a partnership, not a separate legal entity like a PT.
A PT is a legal entity in its own right, separate from the people who own its shares (UU 40/2007, the Company Law, Article 1, point 1). An ordinary PT needs at least two founders (Article 7(1)).
CV vs PT Indonesia: three local forms side by side
| CV | PT PMDN | PT Perorangan | |
|---|---|---|---|
| Founders | Two or more: active and silent partners | Two or more Indonesian shareholders | One Indonesian citizen |
| Entity | Partnership, not a legal entity | Legal entity | Legal entity |
| Liability | Active partners: personal assets | Shareholders: their shares | Founder: their shares |
| Capital | Silent partners' money, put in or promised | Founders set it; some sectors set a minimum | Founder sets it |
| Tax | 22% on profit | 22% on profit | 0.5% on turnover, within limits |
| Registered | Notarial deed, SABH | Notarial deed, SABH | Online statement |
Sources: KUHD Articles 19 and 20; Company Law Articles 3, 7, 32, 33, 153A and 153J; PP 8/2021 (Peraturan Pemerintah, a government regulation), Articles 5 and 6; Permenkum 25/2025 (a Ministry of Law regulation).
How each is registered
A CV is founded by a notarial deed. Your notary files it online through the Ministry of Law’s system, SABH (Sistem Administrasi Badan Usaha), within 60 calendar days of signing the deed (Permenkum 25/2025, Article 5). The registration certificate is issued as soon as the filing is accepted (Article 8).
A PT’s deed of establishment goes through the same system (Permenkum 49/2025). A PT Perorangan is registered by an electronic statement in place of a deed (PP 8/2021, Article 6).
Who carries the debts
An active partner acts for the CV and is liable to third parties, jointly with the other active partners, up to their personal assets (Permenkum 25/2025, Article 1, point 4). A silent partner risks only the capital they put in or promised (KUHD, Article 20).
A PT’s shareholders are not personally liable for what the company owes, nor for losses beyond their shares (Company Law, Article 3(1)). The Elucidation to Article 3(2) gives one example of how that protection is lost: mixing personal and company assets so that the company becomes a mere tool for its shareholder’s personal ends.
A silent partner stays out of the management
A silent partner may not manage the business or work in it, even under a power of attorney, and their name may not be used in the firm’s name (KUHD, Article 20). A silent partner who does either takes on the active partners’ liability for the CV’s debts (Article 21).
How a CV and a PT are taxed
The tax law treats a CV as a body (badan), the same as a PT (UU 28/2007, the General Tax Provisions Law, Article 1, point 3). So the CV pays corporate income tax on its profit at 22% (Income Tax Law, Article 17(1)(b)). A partner’s share of that profit is then not taxed again in the partner’s hands, for an ordinary CV whose capital is not divided into shares (Article 4(3)(i)).
One difference matters when partners pay themselves: a salary such a CV pays its partners is not a deductible cost for the CV (Article 9(1)(j)).
A PT pays the same corporate rate. When it pays profit out to an Indonesian individual as a dividend, the dividend can be taxed again unless it is reinvested in Indonesia (Income Tax Law, Article 17(2c)). Our guide to dividend tax sets out the rate and the conditions.
The 0.5% rate is closed to new CVs
Since 22 April 2026 the 0.5% final tax on turnover can be started only by individuals, single-founder PT Perorangan and cooperatives, so a new CV cannot use it (PP 55/2022, as amended by PP 20/2026). A CV already inside its period may finish it, as long as it still meets the conditions (PP 20/2026, Article II).
Two outdated claims about CVs
Moving from a CV to a PT
The Company Law’s merger and consolidation rules apply between PTs (Article 1, points 9 and 10), and PP 8/2021 Article 9 provides a change of status into a PT only for a PT Perorangan. For a CV, the route we use is to found a PT and transfer the business to it. We register CVs, and when a business outgrows one, our local PT service sets up the PT it moves into.
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Found the PT
A notarial deed, then registration with the Ministry of Law, which makes it a legal entity (Company Law, Article 7(4)).
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Move the business in
Assets can come in as the shareholders' capital, at market price, or valued by an independent expert.
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Close the CV
If it is no longer needed, its dissolution is registered with the Ministry.
The company values capital paid in assets rather than cash at market price, or has an independent expert value it (Company Law, Article 34). Immovable property such as land or buildings paid in this way must be announced in a newspaper within 14 days of the deed.
Which to choose
Foreign investment goes through a PT unless a law provides otherwise, so a foreign founder sets up a PT PMA (Penanaman Modal Asing, a foreign-owned company) rather than a CV. Partners who want a partnership can use a CV, as long as the active partner is comfortable carrying its debts personally. Indonesian founders who want their liability to stop at their shares can use a local PT, or a PT Perorangan for a single founder at small scale.