Setting up an Australian company from Indonesia

Indonesian groups expanding south usually incorporate an Australian proprietary company owned by an Indonesian Perseroan Terbatas (PT). Australia then expects at least one director who ordinarily resides in Australia, under section 201A of the Corporations Act. Our resident director guide explains that rule. This page covers the parts that are specific to Indonesia: a tax treaty that dates from 1992, a trade agreement that does not lift the FIRB screening band, the apostille that has been available since 2022, and an archipelago that spans three time zones.

Who holds the Australian shares

The choice of shareholder shapes almost everything else on this page, so settle it first.

• The Indonesian PT directly. The simplest structure. Dividends flow straight to Jakarta, the Australia–Indonesia treaty applies, and FIRB looks at an Indonesian acquirer.
• A PT with foreign shareholders (often called a PT PMA). Where the Indonesian company is itself foreign-owned, the Australian side still treats the PT as the immediate shareholder. FIRB also looks through to who controls it, so disclose the whole chain to your adviser.
• A regional holding company in Singapore or elsewhere. Some conglomerates already hold their offshore businesses through a hub. That changes the treaty that applies to dividends and, as explained below, can change the FIRB band. Decide this on tax and commercial grounds, not by habit.
• A branch of the PT, registered as a foreign company. Our subsidiary vs branch comparison sets out the trade-offs. Most Indonesian groups that hire staff here choose a subsidiary.

Indonesian rules on investing offshore, foreign exchange reporting and approvals inside a group (for example from a board of commissioners) sit outside Australian law. Ask your Indonesian counsel what the PT needs on its side before it subscribes for shares or sends capital.

The 1992 tax treaty

Treasury's income tax treaties table lists a comprehensive agreement with Indonesia, signed on 22 April 1992 and in force since 14 December 1992. The same table shows it is modified by the OECD Multilateral Instrument, with the MLI taking effect for this treaty on 1 August 2020, and that a synthesised text combining the two is available.

In practice the treaty decides how much Australian withholding tax applies when the subsidiary pays dividends, interest or royalties to the PT, and where business profits are taxed. Rates depend on shareholding, franking and the anti-abuse rules the MLI added. Have your tax adviser model the first dividend or management fee before it is paid. Our guides on company tax for foreign-owned companies and transfer pricing cover the Australian side. We don't give tax advice.

Trade agreements and the FIRB band

Indonesia has more trade agreements with Australia than most investor countries. According to DFAT:

None of these puts Indonesia on the list of "certain FTA partners" in the 2026 FIRB monetary thresholds table. A private Indonesian investor therefore falls in the standard band:

For a private investor, incorporating a new Australian company from scratch is usually not the trigger. Buying an existing business, land or a resources interest is. The FIRB basics guide explains when an application is needed.

State-owned groups

Several large Indonesian groups are state-owned enterprises. Foreign government investors face a $0 threshold for direct interests in Australian entities and businesses under the same table. FIRB's key concepts guidance treats a corporation as a foreign government investor if, among other tests, a foreign government or government entity holds a substantial interest of at least 20 per cent with its associates. A subsidiary partly owned by an Indonesian SOE can meet that test. Raise it with a FIRB adviser before you sign anything, including a lease.

Documents and the apostille

The HCCH status table records Indonesia's accession to the Apostille Convention on 5 October 2021, in force from 4 June 2022. Australia has been a party since 1995. Where an Australian bank, court or registry wants an Indonesian public document authenticated, an apostille issued in Indonesia replaces the older embassy chain.

Most setup steps need less than that. For a Director ID applied for on paper, ABRS accepts copies certified outside Australia by a notary public or by staff at an Australian embassy or consulate. Documents not in English need an English translation from an appropriate embassy or a NAATI-accredited translator, and the translation must be certified by that service.

Practical points for Indonesian paperwork:

• Akta and company extracts are in Bahasa Indonesia. Budget for certified translations of the PT's deed of establishment and its latest amendments when the bank or your adviser asks who owns and controls the parent.
• Single names are common. Some Indonesian passports show one name only. Record it exactly as printed, and keep it identical across the Director ID, the ASIC company register and bank KYC.
• Bilingual agreements. Your Indonesian lawyer may want a Bahasa Indonesia version of intra-group loan or service agreements. Ask early so the English and Indonesian texts are signed together.

Three Indonesian time zones against Sydney

Indonesia does not use daylight saving, but it runs three zones. Sydney and Melbourne move to daylight time on the first Sunday in October (4 October 2026) and back on the first Sunday in April (4 April 2027), according to NSW Government.

Perth is on UTC+8 all year, the same clock as Bali and Makassar, and one hour ahead of Jakarta. A board pack sent from Sydney at 4pm in January lands in Jakarta at noon, so same-day signatures are realistic if the directors are ready. The signing documents from overseas guide covers electronic execution and circulating resolutions.

Common pitfalls for Indonesian parents

1. Assuming IA-CEPA lifts the FIRB band. It doesn't, as the table above shows.
2. Naming a Jakarta-based executive as the only local director. Regular visits don't make someone ordinarily resident here.
3. Funding late. Capital or a loan from the PT may need internal and Indonesian-side steps before the money moves. Our guide to funding an Australian subsidiary covers the Australian choices between equity and debt.
4. Inconsistent names. A spelling difference between passport, Director ID and ASIC records holds up bank onboarding.
5. Forgetting the Director ID. Every director, including those in Indonesia, needs one before appointment. See the Director ID guide for foreign directors.

Where a resident director fits

Many Indonesian groups have no one living in Australia when they incorporate. An independent resident director satisfies s201A from day one and stays in place when staff come and go. Our packages are on the pricing page, and the step-by-step build is in the subsidiary setup guide.

General information only, current at 28 October 2026. It is not legal, tax or financial advice; get advice on your group's position in both countries.

General information about Australian law and practice, not legal or tax advice for your circumstances. Check the official sources, or ask your adviser, before you act.