Frequently Asked Questions: #foreigndirectors

As a matter of company law, no — Indonesia does not impose a nationality requirement on directors of a PT PMA. A company needs at least one director and one commissioner; both may be foreigners, and the commissioner may reside abroad.

As a matter of practice, the question is really about residence and presence, not nationality:

• A director who actively manages the company from within Indonesia needs proper stay status and work authorisation — foreign or not
• Day-to-day administration assumes someone locally available: bank account mandates, tax administration (the Coretax person-in-charge), receiving official correspondence, signing where electronic signature will not do
• Certain regulated activities and licences expect an identifiable, reachable management presence

This is why many foreign-owned companies appoint a resident director — Indonesian or a foreigner with a KITAS — alongside, or instead of, principals who remain abroad. Powers of attorney cover some functions; they do not substitute for management presence across the board, and government systems increasingly assume a locally-registered individual.

Related questions we are often asked:

• Can director, commissioner and shareholder be the same people? The same person cannot be both director and commissioner (the roles supervise each other), but a shareholder can hold either office.
• Can Okusi provide the director? Okusi provides professional officeholder services under strict conditions, including full compliance oversight — this is a supervised arrangement, not a rubber stamp. Ask us for the conditions before assuming it fits.

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Yes, foreigners can serve as directors or commissioners in Indonesian companies, including PMA (foreign-owned) companies. However, there are some important considerations:

Directors: * Foreigners can be appointed as directors in Indonesian companies. * There is no statutory requirement that any director be an Indonesian citizen or resident — a 100% foreign-owned company with all-foreign officers is lawful where the sector permits full foreign ownership. In practice, however, having at least one director resident in Indonesia greatly simplifies banking, tax administration, and day-to-day dealings with government offices. * Foreign directors require RPTKA ratification (the work permit) and a limited stay permit (KITAS/e-ITAS) to reside and work in Indonesia.

Commissioners: * Foreigners can also serve as commissioners in Indonesian companies. * There is no residency requirement for commissioners. * If a foreign commissioner performs active duties in Indonesia, they will need work authorization (RPTKA ratification).

Key points to note: * The composition of the board of directors and commissioners must comply with the company’s Articles of Association. * Some business sectors may have specific requirements or restrictions on foreign directors or commissioners. * The appointment of directors and commissioners must be approved by shareholders and properly documented. * Foreign directors and commissioners must have a tax identification number (NPWP) in Indonesia.

Work permit considerations: * Foreign directors working in Indonesia need to obtain: * RPTKA ratification (Pengesahan RPTKA) from the Ministry of Manpower, which functions as the work permit (the former IMTA was abolished in 2018) * Limited Stay Visa (e-VITAS) * Limited Stay Permit (e-ITAS/KITAS, work index E23) * The company must sponsor these permits for the foreign director and pays the DKPTKA fee of USD 100 per month per foreign worker.

Tax implications: * Foreign directors and commissioners may have tax obligations in both Indonesia and their home country. * It’s advisable to consult with a tax professional to understand the specific tax implications.

Professional support: * Due to the complexities of Indonesian corporate law and regulations, it’s recommended to seek professional assistance when appointing foreign directors or commissioners. * Okusi Associates can provide guidance on compliance requirements and assist with the necessary documentation and permit applications.

Remember to always check the latest regulations, as requirements may change over time.

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No. Shareholding in an Indonesian company carries no obligation to hold any Indonesian visa or stay permit. A foreigner may own shares in a PT PMA while living permanently in Australia, Singapore or anywhere else, visiting Indonesia (if at all) on ordinary visit visas.

An investor KITAS exists for the opposite case: a shareholder who wants to live in Indonesia on the strength of their investment. It is a right, not a duty. The company must still meet its own obligations — capital, licensing, tax and LKPM reporting — but these attach to the company, not to the shareholder’s immigration status.

Points that matter for the passive-shareholder structure:

• Directors are different. A director who actually manages the company from within Indonesia needs proper status and work authorisation. A foreign director who genuinely remains abroad and exercises the role remotely is a common arrangement, but the company then needs practical management on the ground — which is where a resident director, or properly-scoped local management, comes in.
• Signing and banking. Bank account opening, tax administration (Coretax access) and various filings are far simpler with someone locally authorised. Powers of attorney solve some of this; they do not solve all of it.
• Visits. Attending shareholder meetings or inspecting your investment falls within business-visit activities — no work permit needed.

So a small spa or villa company can lawfully have a foreign passive owner abroad and a local partner running operations, with no KITAS anywhere in the structure. What that structure cannot do is dodge the company-level capital and licensing requirements, which apply regardless of where the shareholders sleep.

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