Foreign Business Setup Guide
How to Start a Construction Company in Yogyakarta as a British Foreigner
Everything you need to know about licenses, company setup, and compliance requirements for British entrepreneurs opening a construction company in Yogyakarta, Indonesia.
Licenses Required
3
Est. Cost Range
$361 - $1,806
Timeline
36-92 days
Quick Answer
Yes, British foreigners can start a construction company in Yogyakarta, Indonesia. This business activity is open to foreign investment with up to 67% foreign ownership through a PT PMA (foreign-owned limited liability company).
You will need approximately 3 licenses and can expect the process to take 36-92 business days. The estimated government and service fees range from Rp 5.600.000 to Rp 28.000.000.
Foreign Ownership Rules
Foreign Ownership
Up to 67%
DNIB Status
open
Recommended Structure
PT PMA (Foreign Investment Company) (PT PMA)
As a foreign investor opening a construction company in Indonesia, you will typically establish a PT PMA (Perseroan Terbatas Penanaman Modal Asing) — a foreign-owned limited liability company. This is the standard legal entity for foreigners conducting business activities in Indonesia.
Minimum investment capital: Rp 10.000.000.000 ($645,161).
Yogyakarta — Local Compliance Guidance
Specific regulations, costs, and timelines that apply to businesses setting up in Yogyakarta.
Cost Adjustment
20% lower
Costs in Yogyakarta are approximately 20% lower than the national average due to local market conditions and regulatory requirements.
Timeline Adjustment
+5 business days
Processing times in Yogyakarta typically take 5 additional business days compared to the national average.
About Yogyakarta
Yogyakarta as a Special Region (DIY) has unique regulations governed by the Sultanate. Land ownership is restricted under Sultanate rules - the 1975 vice-governor instruction prohibits land ownership by non-native Indonesians, and Sultan Ground (Tanah SG) can only be leased. Lower costs but limited commercial infrastructure outside the city center. Cultural heritage requirements can add time for businesses in the Malioboro/Keraton area.
Additional Local Requirements
These permits and requirements apply specifically in Yogyakarta, in addition to national requirements.
- Special Region cultural impact assessment for businesses in heritage zones
Restrictions & Warnings
Yogyakarta Special Region has unique land ownership rules - foreigners cannot own land directly
Businesses near Keraton (Sultan Palace) require cultural preservation approval
Sultanate ground lease (Sultan Ground) applies to most land - review carefully with a local lawyer
Local Investment Authority
Authority Name
DPMPTSP DIY
Contact
dpmptsp@jogjaprov.go.id
The local DPMPTSP (Investment and One Stop Integrated Service) office handles regional permits alongside the national OSS system.
Required KBLI Codes
KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) codes identify your business activities in Indonesia's licensing system.
| Code | Risk Level | Foreign Ownership | DNIB Status |
|---|---|---|---|
| 41011 | medium_high | 67% | open |
Required Licenses & Permits
Licenses required to operate a construction company in Yogyakarta as a foreign-owned business.
Nomor Induk Berusaha(NIB)
business_id
▾
Nomor Induk Berusaha(NIB)
business_id
Estimated Cost
Free
Free through OSS system
Processing Time
1 business days
Validity
Varies
Sertifikat Badan Usaha Jasa Konstruksi (Construction Services Certificate)(SBU)
sector_specific
▾
Sertifikat Badan Usaha Jasa Konstruksi (Construction Services Certificate)(SBU)
sector_specific
Estimated Cost
Rp 5.000.000 - Rp 15.000.000
Required for construction companies. Issued by LPJK.
Processing Time
14 business days
Validity
36 months (renewable)
Persetujuan Bangunan Gedung (Building Approval)(PBG)
location
▾
Persetujuan Bangunan Gedung (Building Approval)(PBG)
location
Estimated Cost
Rp 2.000.000 - Rp 20.000.000
Based on building size and retribusi rate per m2. Higher in Jakarta/Bali.
Processing Time
30 business days
Validity
Varies
Get Your Free Compliance Checklist
Tailored to your specific business type, location, and nationality.
Step-by-Step Setup Process
The typical process for a British entrepreneur setting up a construction company in Yogyakarta (10 steps).
Prepare Documentation
~7 daysGather your passport, proof of address, and any relevant business qualifications. Foreign citizens should also prepare apostilled documents if required.
Reserve Your Company Name
~3 daysSubmit 3 company name choices to the Ministry of Law and Human Rights (Kemenkumham) through the AHU Online system. Names must be in Bahasa Indonesia and at least 3 words.
Draft the Deed of Establishment
~7 daysWork with a local notary to prepare your company articles of association, including share structure and business activities (KBLI codes).
Register with Kemenkumham
~14 daysSubmit the notarial deed for legal entity approval. Once approved, your company exists as a legal entity.
Obtain NIB through OSS
~1 dayRegister on the OSS (Online Single Submission) system to get your NIB (Nomor Induk Berusaha) - your primary business identification number. Select the appropriate KBLI codes for your business activities.
Apply for Sector-Specific Licenses
~14 daysBased on your KBLI codes and risk level, apply for any additional permits required to operate your business type in your chosen location.
Pro tip: License requirements vary significantly by business type and risk level. Low-risk businesses may only need NIB, while high-risk businesses need multiple sector permits.
Open a Corporate Bank Account
~14 daysOpen an Indonesian bank account in the company name and deposit the required paid-up capital (minimum IDR 2.5 billion for PT PMA).
Register for Tax (NPWP & PKP)
~7 daysObtain your company Tax ID (NPWP) and register as a taxable entrepreneur (PKP) if your revenue will exceed the IDR 4.8 billion threshold.
Apply for Work Permits (RPTKA & IMTA)
~30 daysApply for the Foreign Worker Utilization Plan (RPTKA) and work permit (IMTA) through the Ministry of Manpower.
Obtain KITAS/KITAP Visa
~15 daysApply for your stay permit (KITAS for temporary, KITAP for permanent) through immigration. This allows you to legally reside and work in Indonesia.
Estimated Total Timeline
112 days(4 months)
Based on mandatory steps processed sequentially. Actual timeline may vary depending on government processing speeds and document readiness. Some steps can run in parallel.
Estimated Costs Breakdown — Yogyakarta
Approximate government and service fees adjusted for Yogyakarta (20% below national average). Excludes ongoing operational costs.
| Item | Low Estimate (IDR) | High Estimate (IDR) | USD Approx. |
|---|---|---|---|
| Company Establishment (Notary + Legal) | Rp 12.000.000 | Rp 28.000.000 | $774 - $1,806 |
| Kemenkumham Registration | Rp 800.000 | Rp 1.600.000 | $52 - $103 |
| NIB / OSS Registration(Free (government)) | Free | Free | Free |
| Nomor Induk Berusaha (NIB)(Free through OSS system) | Free | Free | Free |
| Sertifikat Badan Usaha Jasa Konstruksi (Construction Services Certificate) (SBU)(Required for construction companies. Issued by LPJK.) | Rp 4.000.000 | Rp 12.000.000 | $258 - $774 |
| Persetujuan Bangunan Gedung (Building Approval) (PBG)(Based on building size and retribusi rate per m2. Higher in Jakarta/Bali.) | Rp 1.600.000 | Rp 16.000.000 | $103 - $1,032 |
| Work Permit (RPTKA + IMTA) | Rp 12.000.000 | Rp 20.000.000 | $774 - $1,290 |
| KITAS Visa | Rp 4.000.000 | Rp 9.600.000 | $258 - $619 |
| Virtual / Physical Office Address(Per year) | Rp 4.000.000 | Rp 24.000.000 | $258 - $1,548 |
| Total Estimated Range | Rp 38.400.000 | Rp 111.200.000 | $2,477 - $7,174 |
Note: Minimum investment capital for a PT PMA is Rp 10.000.000.000 ($645,161). This is separate from the setup costs above.
Visa & Work Permit Requirements
As a Britishnational, you'll need the right visa to live and work in Indonesia while running your construction company.
Recommended: Investor
KITAS Investor
- Duration: 24 months
- Estimated cost: $1,500
- Company sponsorship required
Alternative: Work Permit
KITAS Investor
- Duration: 24 months
- Min. salary: $1,200/month minimum
- RPTKA approval needed first
British citizens can enter Indonesia visa-free for up to 30 days or on a Visa on Arrival (VoA) for tourism. However, to work and operate a business, you must obtain the appropriate stay permit (KITAS/KITAP).
Guidance for British Entrepreneurs
Country-specific information for British nationals setting up a business in Indonesia.
Recommended Visa Pathway
Investor KITAS. UK has no special bilateral agreement simplifying visa processing. Standard RPTKA pathway.
Estimated processing time: 35 business days
Tax Treaty Information
UK-Indonesia DTA in effect. UK taxes worldwide income. No National Insurance totalization. Pension contributions cannot be transferred.
Common Issues for British Nationals
Post-Brexit: no EU trade advantages in Indonesia
Sterling conversion rates affect capital requirements
UK professional qualifications may need separate Indonesian recognition
Document Requirements for British Citizens
- Documents must be apostilled (UK is Hague Convention member)
- DBS check required for KITAS
- UK solicitor-notarized documents accepted
Embassy & Consulate
British Embassy Jakarta: Jl. Patra Kuningan Raya Blok L5-6. British Honorary Consul Bali available for emergencies.
Business Culture Tips
British formality is appreciated in Indonesian business settings. Tea is often served at meetings - accepting is polite. Patience with bureaucracy is essential.
Common Pitfalls & Tips
Operating on a Tourist Visa
Many foreigners try to start a business while on a tourist visa or VoA. This is illegal and can result in deportation and blacklisting. Always obtain proper business documentation first.
Using Nominee Structures Illegally
While nominee arrangements are common, undisclosed nominee structures violate Indonesian law. If foreign ownership is restricted, work with a qualified lawyer to find compliant alternatives.
Underestimating Capital Requirements
PT PMA companies have minimum investment and paid-up capital requirements. Ensure you meet these thresholds before starting the registration process for your construction company.
Ignoring Local Permits
Yogyakarta may have specific local permits (izin usaha) beyond national requirements. Check with the local DPMPTSP (investment office) for Yogyakarta-specific requirements.
Missing Tax Obligations
Indonesia has strict tax reporting requirements including monthly VAT returns, employee tax withholding (PPh 21), and annual corporate income tax. Non-compliance leads to significant penalties.
Frequently Asked Questions
Can a British citizen own 100% of a construction company in Yogyakarta?
▾
British nationals can own up to 67% of a construction company in Yogyakarta. The remaining 33% must be held by an Indonesian shareholder. This applies to all 1 KBLI code for this business type.
What licenses do I need to start a construction company in Yogyakarta?
▾
You will need 3 licenses to operate a construction company in Yogyakarta. These include: NIB, SBU, PBG. All licenses are obtained through Indonesia's OSS (Online Single Submission) system and sector-specific authorities.
How much does it cost to set up a construction company in Yogyakarta?
▾
Based on the 3 required licenses, government and service fees for a construction company in Yogyakarta range from Rp 5.600.000 to Rp 28.000.000 (approximately $361 to $1,806). This excludes the minimum investment capital of Rp 10 billion required for PT PMA companies, office rental, and ongoing operational costs.
How long does it take to set up a construction company in Yogyakarta?
▾
The typical timeline is 36-92 business days from start to fully operational in Yogyakarta. This includes company registration, obtaining all 3 required licenses, and visa processing. Working with an experienced agent can help run some steps in parallel and reduce the total time.
Do I need a local partner to start a construction company in Indonesia?
▾
Yes, a local partner is required for 1 of your 1 KBLI code which limit foreign ownership to 67%. The Indonesian shareholder must hold at least 33% of shares for those activities. Ensure you work with a reputable local partner and have a proper shareholder agreement drafted by a qualified lawyer.
What visa do I need as a British to run a business in Indonesia?
▾
You will need either an Investor KITAS (stay permit) or a Work KITAS, sponsored by your Indonesian company. Tourist visas and Visa on Arrival do not permit business activities. The Investor KITAS is typically recommended for business owners, while the Work KITAS is for employees of the company.
Can I operate my construction company from Yogyakarta remotely?
▾
Your PT PMA must have a registered physical or virtual office address in Yogyakarta. You can manage operations remotely as long as you maintain compliance with tax and reporting obligations, including monthly VAT returns and quarterly LKPM (investment activity reports). Directors must attend certain regulatory meetings in person.
What are the ongoing compliance requirements?
▾
You must file monthly tax returns (VAT, employee tax), submit an annual corporate tax return, renew applicable licenses (you have 3 to track), maintain LKPM (investment activity reports) quarterly, and keep company records with your notary. Non-compliance can result in license revocation and penalties.
Data verified against official Indonesian government sources
Every data point is marked with its verification status. We source from OSS.go.id, BKPM, Imigrasi.go.id, and Peraturan.go.id. This is informational guidance — always confirm with a licensed Indonesian lawyer for your specific situation.
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Disclaimer: This guide is for informational purposes only and does not constitute legal, tax, or professional advice. Regulations in Indonesia change frequently. Always consult with a qualified Indonesian lawyer and licensed tax consultant before making business decisions. Information on this page was last reviewed in March 2025 and may not reflect the most current regulations. IndonesiaCompliance is not a law firm and does not provide legal services.