MGL simplifies the process of setting up your iGaming business in Indonesia, ensuring compliance with local regulations while preparing you for market entry. Their step-by-step guidance ensures everything runs smoothly from start to finish.

Step 1: Initial Consultation and Document Preparation

The incorporation process kicks off with a thorough consultation and document preparation. During this stage, MGL works closely with you to understand your business goals, target market, and operational needs within the iGaming industry. This phase typically takes about 2 to 4 weeks and involves gathering all the documents required by Indonesian authorities.

One key task in this stage is reserving your company name. Indonesian naming rules require the name to include at least three unique words. If you're setting up a foreign investment company (PT PMA) - a common choice for iGaming businesses - the name can be in English or other languages. You'll also need to draft and notarise the Deed of Establishment, which outlines essential details like your company's name, address, business activities, capital structure, and shareholders. For a PT PMA, the minimum paid-up capital requirement is IDR 10 billion (around AU$1 million), alongside other identification documents.

Once these steps are complete, you’re ready to move to the formal registration and licensing stage.

Step 2: Company Registration and Licensing

The next step is registering your company with the relevant Indonesian authorities and obtaining the necessary licences. This starts with applying for a Business Identification Number (NIB) through the Online Single Submission (OSS) system. The NIB acts as your company’s registration certificate, import licence, customs ID, and proof of participation in social security programs.

The registration process, including tax formalities, is typically completed within 3 to 7 business days. However, companies operating outside Jakarta must also secure a Domicile Letter (SKDP). This requires submitting documents like rental agreements, community reference letters, proof of property tax payment, and director photographs with a red background. Jakarta-based companies benefit from more relaxed regulations introduced in May 2019. For iGaming businesses, additional licences may be needed, and expert advice can help you navigate the varying approval timelines.

After registration, you can proceed to set up your financial systems and prepare for launch.

Step 3: Bank Account Setup and Business Launch

The final phase focuses on establishing your financial foundation and getting your business ready to operate. This includes opening a corporate bank account and handling visa and work permit arrangements for key personnel. These tasks, which rely on your registration documents, typically take a few weeks to complete. For iGaming companies, integrating reliable payment solutions is essential, and MGL can help you connect with providers that align with both your operational needs and compliance standards.

Visas and work permits for your team are another critical step, often requiring several weeks to process. If all documents are in order, the entire incorporation process for a PT PMA generally takes 1 to 1.5 months. However, companies based in Jakarta may be ready to operate in as little as four weeks.

Government fees for basic registration usually fall between IDR 25 million and IDR 60 million (approximately AU$2,000–5,000). On top of that, professional service fees can range from AU$4,000 to AU$11,000, depending on the complexity of the setup. Recent regulatory changes, such as the shift from a Negative Investment List to a Positive Investment List, now allow for 100% foreign ownership in many sectors, providing greater opportunities for international iGaming businesses.

When setting up a gaming business in Indonesia, selecting the right type of business entity is crucial to align with your goals. Indonesia offers several options, each with unique features, capital requirements, and operational limitations suited to different objectives. Below, we break down the main entity types to help you find the right fit for your gaming business.

It’s important to note that online gambling is strictly illegal in Indonesia. This includes activities like casino games, sports betting, slots, poker, and bingo, and the government does not issue licences for such operations. However, for gaming companies involved in development, publishing, or related services, there are legal entity options available to operate within the country.

Limited Liability Company (PT)

A Limited Liability Company, or PT, is a popular choice for gaming businesses looking for local legal protection and a straightforward registration process. This structure offers limited liability, meaning shareholders’ personal assets are protected from company debts and obligations. Additionally, it provides a framework for securing the necessary licences and permits to operate.

Recent regulations have made PT structures especially relevant for foreign game publishers. Under Presidential Regulation No. 19 of 2024, effective from 12th February 2024, foreign game publishers are required to establish an Indonesian legal entity or form a joint venture with a domestic partner in the form of a PT ^[2].

The capital requirements for a PT vary widely, from IDR 50 million to over IDR 10 billion (around AU$5,000 to AU$1 million). At least 25% of the authorised capital must be issued and paid up during incorporation. Compared to other foreign investment structures, the registration process for a PT is generally simpler, requiring fewer regulatory approvals.

Foreign Investment Company (PT PMA)

For international gaming companies seeking full operational capabilities, the Foreign Investment Company (PT PMA) is a tailored option. This type of entity allows for full or partial foreign ownership, making it a strong choice for foreign companies wanting to establish a subsidiary in Indonesia.

To comply with current regulations, foreign game publishers must set up a local presence through a PT PMA or a joint venture. However, PT PMA entities come with higher capital requirements than domestic PTs. The minimum total investment is IDR 10 billion (approximately AU$1 million), with at least 25% or IDR 2.5 billion (around AU$250,000) required as paid-up capital. For 2024, the minimum investment threshold remains IDR 10,001,000,000 until 31st December.

The registration process for a PT PMA is more complex, often taking 4 to 6 weeks and requiring additional approvals from the Investment Coordinating Board (BKPM). However, the benefits include access to tax incentives - such as tax holidays and reduced rates in Special Economic Zones - and the ability to conduct full commercial operations, including revenue generation and contract signing.

Foreign ownership in PT PMA structures is governed by Indonesia’s Positive Investment List, which specifies the sectors open to foreign investment. The transition from the Negative Investment List to the Positive Investment List has created opportunities for 100% foreign ownership in many sectors, offering greater flexibility for international gaming businesses.

Representative Office

For companies in the early stages of entering the Indonesian market, a Representative Office can be a practical option. This type of entity is designed for non-commercial activities, allowing foreign companies to explore opportunities without committing significant capital upfront. It’s ideal for gaming companies focused on market research, promotional efforts, or preparing for future investments.

Setting up a Representative Office is relatively quick, typically taking 3 to 5 weeks. There’s no minimum capital requirement, and the entity is entirely owned by the foreign parent company. A Chief Representative Officer is appointed to oversee operations, eliminating the need for an Indonesian board structure.

However, it’s important to note that Representative Offices cannot engage in revenue-generating activities. They are prohibited from signing contracts, selling goods or services, or conducting any form of commercial trade.

For gaming companies, a Representative Office is a great way to conduct feasibility studies, build relationships, and understand local regulations before committing to larger investments.

Choosing the right entity type depends on your business goals, available resources, and operational needs. Whether you need the full capabilities of a PT PMA, the simplicity of a PT, or the exploratory benefits of a Representative Office, aligning your entity with your strategy is key to a successful entry into the Indonesian market. Expert advice from MGL can help gaming companies navigate these options and make informed decisions tailored to their objectives.