Apple is encountering a significant roadblock in Indonesia. Despite launching the iPhone 16 globally, the tech giant cannot sell its latest devices in the country due to failure to meet the Domestic Component Level (TKDN) requirement. This situation highlights a crucial lesson for foreign investors: entering the Indonesian market requires more than capital and business strategy—it demands strict regulatory compliance. One of the most overlooked yet essential steps is choosing the right business entity. Without a proper legal structure, companies may face regulatory obstacles that hinder operations, as Apple is currently experiencing.
This case highlights a critical lesson for foreign investors looking to enter the Indonesian market. Having capital and a strong business strategy is not enough; understanding and complying with Indonesia’s legal and regulatory landscape is just as important. One of the most commonly overlooked factors in market entry is choosing the right legal business structure. Without it, companies risk encountering significant regulatory challenges that could delay or even block their operations.
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In Indonesia, all 4G and 5G devices must contain at least 40% local content to comply with TKDN regulations. The policy is aimed at boosting domestic industry, encouraging foreign companies to invest in local manufacturing, software, or research and development.
Apple, however, has yet to meet the required investment threshold. Reports indicate that the company still falls short by approximately IDR 240 billion from its IDR 1.71 trillion investment commitment. As a result, the Ministry of Industry has not issued the distribution permit necessary for Apple to sell its latest devices in Indonesia.
This regulatory challenge is not unique to Apple. Many foreign companies entering Indonesia face similar struggles due to a lack of awareness of local investment regulations, compliance requirements, and legal frameworks. The key to avoiding these pitfalls? Ensuring a solid legal foundation before entering the market.
Entering the Indonesian Market with a PT PMA
Choosing the right business structure is essential for foreign investors looking to operate successfully in Indonesia. One of the most common and legally recognized options is a Foreign Direct Investment Company (PT PMA). This corporate entity allows foreign ownership of a company operating in Indonesia while ensuring compliance with government regulations.
A PT PMA is mandatory for foreign companies wanting to establish direct business operations in Indonesia, whether in trade, manufacturing, services, or other industries.
Key benefits of a PT PMA:
- Up to 100% foreign ownership, depending on the industry
- Legally recognized business operations in Indonesia
- Access to official business permits, including import/export licenses
- Legal employment of foreign workers
- No requirement for local shareholders unless the industry is restricted under the Negative Investment List
For industries included in the Negative Investment List, foreign companies must partner with an Indonesian shareholder. In such cases, a joint venture with an Indonesian citizen or legal entity is required for business operations. Establishing a PT PMA involves several essential steps, including company name registration, deed of establishment, obtaining business permits, and opening a corporate bank account. Navigating Indonesia’s bureaucratic system can be complex, making expert assistance invaluable.
Entering the Indonesian Market Made Easy with Bizindo
Setting up a PT PMA in Indonesia involves a series of complex steps, including:
✔ Company name registration
✔ Drafting the deed of establishment
✔ Obtaining business licenses and permits
✔ Registering for tax compliance
✔ Opening a corporate bank account
Each of these steps requires navigating Indonesia’s regulatory framework, which can be overwhelming for foreign investors unfamiliar with local processes. That’s where Bizindo comes in.
We specialize in helping businesses seamlessly enter the Indonesian market by handling every aspect of company registration and compliance. Our services include:
✅ PT PMA establishment tailored to your business needs
✅ Comprehensive licensing assistance to ensure regulatory compliance
✅ Corporate tax registration and financial structuring
✅ Bank account setup and administrative support
With our experienced team, we simplify the bureaucratic process, ensuring your business can start operating smoothly and without unnecessary delays.
Don’t let regulatory hurdles slow down your market entry. Contact Bizindo here and start your business in Indonesia with confidence!
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