How to Open a Foreign-Owned Company in Surabaya, Hassle-Free Solution for International Investors #StartFranchise

StartFranchise.Id - Surabaya is becoming one of Indonesia’s most active business centers, especially for manufacturing, logistics, and fast-growing consumer markets. Surabaya startup ecosystem ranks among the global top 700 cities, with a global position of #478, Surabaya ecosystem rank has climbed 146 spots in the most recent rankings. It is currently ranked as the 3rd strongest startup ecosystem in Indonesia, having remained stable since 2024. Because of that, more international companies are choosing Surabaya as their first landing spot in Indonesia. With strong industrial infrastructure, a skilled labor market, and a rapidly expanding consumer base, Surabaya has become a strategic entry point for international businesses seeking access to the Indonesian market.

In order to legally operate here, foreign investors must establish a PT PMA (Foreign Investment Company), an official business entity that enables foreign ownership and commercial activities in Indonesia. Think of a PT PMA as your official business passport. A PT PMA provides legal protection, limited liability for shareholders, and a recognized structure for banking, taxation, hiring, and contracts. Without this entity, foreign businesses cannot legally sell products, hire staff, or run operations. Setting up a PT PMA ensures your company enters the Indonesian market with a legitimate and compliant foundation.

[caption id="" align="alignnone" width="5120"] Surabaya City Government Wins 6 Awards at the 2024 TOP BUMD Awards , PDAM Surya Sembada and Bank Surya Artha Utama Earn 5-Star Ratings. [/caption]

Generally, the required investment plan starts at IDR 10 billion (not including land or buildings). Recent policy updates also make things easier by allowing a lower paid-up capital, often around IDR 2.5 billion, as long as the total investment commitment meets the government’s threshold.

These numbers can change depending on what industry you’re in, so confirming them early is smart, especially for small and mid-sized international companies that want to expand efficiently.

The setup itself is straightforward as long as the business owner can provide the paperwork needed by the Indonesian procedures. Here’s some procedure that you must follow:

1. The company deed is drafted with a licensed notary, then approved by the Ministry of Law and Human Rights.
2. The company applies for a Business Identification Number (NIB) through the OSS system, which functions like your official operating license.
3. Tax registration (NPWP), you’re legally able to operate, hire employees, lease offices or warehouses, and apply for sector-specific permits like import or distribution licenses.
4. Check Indonesia’s positive investment list, not every industry is automatically open to 100% foreign ownership, which is why Indonesia has something called the Positive Investment List (DPI).

Foreign companies can collaborate with a local partner in Surabaya through a franchise model. The local partner can handle daily operations, staffing, and logistics, while the brand owner focuses on trademarks, product standards, and quality control. Legally, the foreign brand must register its franchise agreement, submit franchise disclosure documents, and comply with Indonesia’s Ministry of Trade regulations. Once approved, the brand can operate without establishing a foreign companu on day one to make market entry smoother and more cost-efficient.

In short, there are two pathways for foreign companies entering Surabaya:

1. Establish a foreign company for full operational control and long-term expansion, or
2. Offer a franchise if you want a lower-risk, partnership-driven entry into the market.

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