21 Mar 2016
How to do Multi Level Marketing (MLM) in Indonesia
Are you interested to do business in Indonesia that has more than 250 million people? Indonesia is the fourth biggest population country in the globe, which is 60% of population live in Java Island and 20% in Sumatera.
Initially, setting up a Joint Venture Company (or a PT/Perseroan Terbatas) is recommended. By regulation the composition of shareholder should be:
- 95% share owned by foreign companies / individuals (maximum)
- And 5% by local
To start the operation of a PT legally, it will takes around 1 up to 2 months.
Secondly, there are some tax registrations and legal licenses that a Joint Venture for MLM should obtain among others are:
- Tax ID Number (NPWP) and VAT Able Firm (PKP)
- Import License
- Product License (from BPOM)
- Business License for Direct Marketing (SIUP-L)
To obtain the legal licenses, it will take around 2 up to 3 months since the all required documents / information completed. Tax ID and VAT Able Firm can be obtained in 1 week after the all required documents submitted to tax office.
In addition, for renting the office space, we do not recommend to use virtual office as it will be hard to set the registration as VAT Able Firm (PKP). PKP is a must in order to do the obligation to levy and claim VAT upon selling and purchase / import.
Good Luck and Welcome to the 4th biggest market in the globe!
Agung Tjahjady SH, CPA, MM, BKP
Registered Tax Consultant, Advocate
Read Other Updates
Tax and Legal Issues for “Over the Top” Business in Indonesia
09 May 2016
Perjanjian / Kontrak dalam Bahasa yang Sederhana
04 May 2016
Tanggung Jawab Perusahaan Saat Dinyatakan Pailit Terhadap Pihak Ketiga
02 May 2016
Panama Papers Part 2
29 Apr 2016
Silahturami at House of Bpk Henry Yosodiningrat
28 Apr 2016
Perbedaan antara Kepailitan dengan PKPU
27 Apr 2016
Simalakama Likuidasi Perusahaan
25 Apr 2016
5 Alasan Perlunya Bahasa Sederhana Dalam Suatu Perjanjian / Kontrak
22 Apr 2016