If you are on a mission to conduct business in Indonesia there are several options – process of incorporation or step into business immediately. The latter is buying a shelf company in Indonesia which allows you to access the market and also join tenders.
In this article we describe the most urgent way of becoming the owner of a clean legal entity in Indonesia.
Process of Buying Shelf Company in Indonesia
Shelf company is a business entity which has been been created with a sole purpose – to put it on a shelf to age. Once it has been aging for a certain amount of time, the company is sold. Straits Partners for example has numerous sellable shelf companies prepared, which carry the incorporation date between the years 2015-2016.
As per the Conditional Sales and Purchase Agreement (CSPA), you are able to use the company for your business purposes 2-4 working days after signing the agreements.
After the purchase of a shelf company you will have a foreign-owned company (PT PMA) with the following characteristics:
Zero activities since the establishment
IDR 600 million (~ $US 44,800) paid up capital stated in the Article of Association (AoA)
Corporate bank account at Bank Mandiri (an IDR as well as an USD account)
Complete list of legal incorporation documents
Taxation by Straits Partners
To have a better overview of PT PMA, make sure to also go through our blog post about the Corporate Structure in Indonesia.
Benefits: When is Shelf Company a Better Option?
By purchasing a shelf company the main benefit is getting a clean company without any additional activities. In terms of Indonesia, this is served in a least time-intensive manner, thus this is the fastest entry solution. After the purchase of a shelf company, you will be able to almost immediately conduct business, which includes:
Participating in tenders
In order to do so, you will receive the new shelf company at the following stage:
Has an existing corporate bank account
Comes with a registered business address
Correct submission of all necessary reports
Establishing timeframe dates back to as early as 2015-2016
When Should You Consider Buying a Shelf Company in Indonesia?
Buying a shelf company in Indonesia means you will gain several benefits, only to name a few:
Credibility and trust – having a company with a history dating back for years adds credibility to your account. With each year conducting business, you will add the years that the company was waiting for the purchase “in the shelf”. Being in the market for longer, your reliable profile improves the reputation of both you and your business – gaining the trust of partners gets more convenient as well as you will have a better standpoint to negotiate with vendors and distributors
Credit Facilities – the one linked to an aged company is proven to be trustworthy and successful in terms of business. Thus, those planning to sign lease agreements or obtaining loans in the future have a chance of better terms and conditions while owning an aged rather than a newly incorporated company
Industry Benefits – some industries require having been into business for several years in order to be eligible and sign necessary documents
How to Make Sure Shelf Company is Clean?
A fully legitimate shelf company is an aged company that has no credit or business history whatsoever. However, when something comes up while doing a background check on the company, this proves you are not looking at a clean shelf company.
It is necessary to conduct financial and legal due diligence, which many selling companies lack. A trustworthy partner guarantees selling a clean shelf company with a clear background. In other words you will only buy an entity and not get the “unnecessary extras” (debts, lawsuits etc.). Straits Partners maintains and sells only clean shelf companies as we fully manage them internally.
We provide market entry services since 2011, including selling shelf companies in Indonesia. We operate following the most recent regulations. This includes the Law of the Republic of Indonesia number 40 of 2007 regarding Limited Liability Companies (e.g. Company Law).
Straits Partners has offices in both Bali and Jakarta, as well as in Vietnam and the Philippines. Use the form below to get in touch with our consultants regards to your opportunities on buying shelf company in Indonesia.
Feel free to reach out to us at [email protected]