Market Entry Indonesia: Five Routes, From Distributor to PT PMA
Market entry Indonesia compared: selling from abroad, a distributor or agent, a representative office, an employer of record, or your own PT PMA.
References (12)
- PP No. 29 Tahun 2021 on trade, as amended by PP No. 3 Tahun 2026, in force 15 January 2026. Article 35(2) requires a producer outside Indonesia to appoint a distributor or agent to reach retailers. Article 35(4), the five-year minimum term for a sole distributor, was deleted by PP No. 3 Tahun 2026.
- Peraturan Menteri Perdagangan No. 24 Tahun 2021 on the distribution of goods by distributors or agents. Article 1(3), (6), (7) and (13) define the principal, the agent, the distributor and the registration certificate. Article 5 covers a KP3A appointing a distributor. Article 6(1) covers the agreement for goods made abroad. Article 8(1) covers ending an agreement early.
- PP No. 28 Tahun 2025 on risk-based business licensing. Articles 126 and 127 grade licences by activity and business size. Article 206(5) and (7) make the NIB the importer number and allow only a business entity to import. Lampiran II sets out the distributor and agent registration.
- PP No. 80 Tahun 2019 on e-commerce. Article 7 on foreign sellers treated as present for trade purposes.
- Peraturan Menteri Perdagangan No. 19 Tahun 2026 on e-commerce, in force 8 June 2026. Article 6 covers foreign merchants on Indonesian marketplaces. Article 22 covers foreign platforms appointing a representative. Article 23 sets the minimum price for goods sold directly from abroad. Article 75 revokes Permendag No. 31 Tahun 2023.
- UU No. 10 Tahun 1995 on customs, as amended. Article 2(1). PMK No. 131 Tahun 2024, Article 3, on import VAT. PMK No. 51 Tahun 2025, Article 3, on income tax collected on imports.
- The Income Tax Law, as amended by UU No. 6 Tahun 2023. Article 26 on payments to non-residents.
- The VAT Law. Articles 3A(3) and 4(1)(d) to (e) on services and intangibles used in Indonesia from abroad.
- Peraturan Menteri Investasi dan Hilirisasi/Kepala BKPM No. 5 Tahun 2025. Articles 24(3), 227(1), 270(3) and 271.
- Peraturan Menteri Perdagangan No. 10/M-DAG/PER/3/2006, as amended. Articles 3 to 5 on what a KP3A may and may not do.
- UU No. 25 Tahun 2007 (the Investment Law). Article 5(2).
- Perpres No. 10 Tahun 2021 on investment business fields, as amended by Perpres No. 49 Tahun 2021. Lampiran II, entries 46 and 47, reserve minimarkets, most food and pharmacy retail, footwear retail and retail by post and internet for co-operatives and micro, small and medium businesses.
For market entry, Indonesia offers five routes, and what you want to do here decides which one fits. Selling to Indonesian buyers, promoting and researching, having people on the ground, and trading in your own name are different jobs, and each has its own vehicle.
Every one of them is a known, regulated path. This guide compares them side by side, then takes each in turn: selling from abroad, a distributor or agent, a representative office, an employer of record (EOR), and your own company. That company is a PT PMA (Perseroan Terbatas Penanaman Modal Asing), a foreign-investment limited company.
Five routes to market entry in Indonesia
The table sets out the five routes for market entry. Indonesia’s rules decide what each can and cannot do.
| From abroad | Distributor/agent | Rep office | EOR | PT PMA | |
|---|---|---|---|---|---|
| Own entity | No | No | An office only | No | Yes, a company |
| Invoices | From abroad | The distributor | No | No | Yes |
| Registered | The importer | Distributor or agent | The office | MAM, as employer | Your company |
| Capital | None | None | None | None | Minimum applies |
| Main limit | Buyer imports | Hard to end early | Cannot trade | Cannot trade | Retail limited |
Selling from abroad, with no presence
You can sell into Indonesia with nothing here at all, and how it works depends on who is buying.
An Indonesian business that buys your goods imports them itself. Only a business entity may import, and its business identification number, the NIB (Nomor Induk Berusaha), also serves as its importer number and customs access (PP 28/2025, Article 206(5) and (7)).
The importer pays the import duty, the import VAT (value added tax) and the income tax collected on imports (UU 10/1995, Article 2(1); PMK 131/2024, Article 3; PMK 51/2025, Article 3). The importer in Indonesia holds the licences, and you sell to it. Our guide to how an importer brings goods in covers its side.
Services and royalties you charge an Indonesian customer work differently. The customer withholds tax on the payment, which a tax treaty may reduce (Income Tax Law, Article 26), as set out in our note on withholding on payments abroad. It also accounts for the VAT on a service it uses from abroad itself (VAT Law, Articles 3A(3) and 4(1)(d)–(e)).
A foreign merchant on an Indonesian marketplace gives the marketplace its home business licence, proof that its products meet the required standards, and listings in Indonesian (Permendag 19/2026, Article 6). Finished goods sold directly from abroad through a cross-border platform carry a minimum price of USD 100 per unit, valued free on board (Article 23).
A large foreign platform, measured by its consumers, parcels or share of Indonesian internet users, appoints a representative in Indonesia, a separate kind of representative office (Article 22). A platform you run yourself from abroad registers as an electronic system operator (PSE) with no Indonesian company, as our guide to PSE registration explains.
Appointing a distributor or agent
A producer outside Indonesia that wants its goods on Indonesian shelves must appoint a distributor or an agent to reach retailers (PP 29/2021, Article 35(2)). The two work differently. A distributor buys and resells in its own name. An agent sells in your name for a commission, without owning the goods (Permendag 24/2021, Article 1(6) and (7)). Someone acting for you in Indonesia can also create a permanent establishment, a taxable presence.
You can make the appointment from abroad (Article 1(3)). For goods made outside Indonesia, the agreement is legalised by a notary and certified by Indonesia’s trade attaché or embassy in your country (Article 6(1)). It is the distributor or agent, not you, that registers as your distributor or agent and holds the registration certificate (Article 1(13); PP 28/2025, Lampiran II).
Choosing a distributor is a long commitment, because an agreement can be ended early only in limited cases (Permendag 24/2021, Article 8(1)), so take a lawyer’s advice on its terms.
Opening a representative office
A representative office puts your own people in Indonesia without a company. The law recognises five kinds, and we set up two of them (Permeninves/BKPM 5/2025, Article 24(3)).
A KPPA (Kantor Perwakilan Perusahaan Asing), a foreign company’s office, can supervise, liaise, coordinate the group’s interests and prepare the setting up of a PT PMA. It may not earn income from Indonesian sources (Article 270(3)).
A KP3A (Kantor Perwakilan Perusahaan Perdagangan Asing), a foreign trading company’s office, holds a trade licence alongside its registration (Article 271). It promotes the parent’s goods and researches the market, but it may not trade (Permendag 10/2006, Articles 3 and 4). The selling is done by an Indonesian-owned company it appoints as distributor or agent (Permendag 10/2006, Article 5; Permendag 24/2021, Article 5).
Neither kind needs capital. Neither can later become the PT PMA, which is formed as a new company of its own (Permeninves/BKPM 5/2025, Article 227(1)).
Employer of record: people before a company
An employer of record lets you have people working in Indonesia before you have a company here. Through our employer of record service, MAM is the legal employer, handling the contract, payroll, tax and BPJS, the state social security schemes, while you direct the work day to day. There is no minimum number of employees.
It does not let you trade, invoice or hold licences in Indonesia; that is a PT PMA’s job. Our comparison of EOR and your own company sets out when each fits.
Your own company: a PT PMA
Foreign investment in Indonesia must be made through a PT, a limited company set up under Indonesian law, unless another law says otherwise (UU 25/2007, Article 5(2)). A PT PMA trades, invoices and employs in its own name, and it holds its own licences, graded by its business activity and size (PP 28/2025, Articles 126 and 127).
It carries a minimum paid-up capital, and our guide to PT PMA capital requirements sets out what counts towards it. We form the PT PMA when you are ready to trade in your own name.
What older guides still say
Where to start
The routes combine. A KP3A promotes while its local distributor sells, and a KPPA can prepare the PT PMA that comes after it. Begin with what the business has to do in Indonesia over the coming year, and let that pick the vehicle. If the sector is still open, our look at where investment in Indonesia is going is a useful first read.