It is a business entity that offers its shares to the public through the stock exchange (IDX) and is regulated by OJK.
Thinking about expanding your business through the capital market? Or are you a foreign investor considering shares in Indonesian public companies? Understanding how a Public Limited Company in Indonesia (commonly referred to as Perseroan Terbuka or “PT Tbk”) works is crucial. This business model offers vast opportunities, but also involves complex legal and compliance frameworks that you must navigate carefully.
At its core, a Public Limited Company in Indonesia is a business entity that sells its shares to the public through the Indonesia Stock Exchange (IDX). These shares can be purchased by institutional investors, retail investors, or even foreign parties (subject to sectoral limitations). Once listed, the company must follow a strict legal and financial disclosure regime, unlike private companies which operate with more privacy and flexibility.
In essence, going public means opening your company up to outside investors, sharing profits through dividends, and complying with government regulations. While this may sound daunting, the reward is often worth it; access to long-term funding, higher valuations, and stronger public credibility.
Before jumping into the IPO process, it’s essential to grasp the legal scaffolding that holds everything together. Several Indonesian regulations form the backbone of how PT Tbk operates:
These laws are not just legal formalities—they’re vital for ensuring public confidence and protecting investor interests. Failure to follow them could lead to sanctions, suspension, or even criminal charges in serious cases.
In the world of Indonesian capital markets, two powerful institutions play a central role. First, the OJK, or Financial Services Authority, supervises and regulates capital markets, ensuring that companies uphold integrity, transparency, and fairness. It reviews prospectuses, oversees IPO filings, and monitors post-listing compliance.
Secondly, the IDX, or Indonesia Stock Exchange, is the official venue for public trading of shares. It doesn’t just provide a marketplace—it enforces listing rules, monitors trading activity, and educates both companies and investors.
Together, OJK and IDX shape the ecosystem where public limited companies grow and thrive.
Understanding the distinction between Public Limited Company (PT Tbk) and Private Limited Company (PT) is crucial especially if you’re considering scaling up, attracting investors, or planning an exit strategy.
| Aspect | Private Limited Company (PT) | Public Limited Company (PT Tbk) |
| Share Offering | Shares are privately held | Shares are offered to the public via stock exchange |
| Capital Requirement | No minimum capital (unless regulated by sector) | Minimum paid-up capital of IDR 3 billion |
| Shareholders | Minimum 2 shareholders, max 50 (not for public) | Minimum 2 founders, no limit on public shareholders |
| Regulatory Body | Ministry of Law and Human Rights (MOLHR) | MOLHR + OJK (Financial Services Authority) + IDX |
| Disclosure Obligation | Minimal, internal reporting only | High disclosure, including public reporting and audits |
| Governance | Basic BoD and BoC structure | Must include independent commissioners and committees |
| Investor Attraction | Venture capital, angel investors, or loans | Public investors, institutional funds, international markets |
While both types of companies are limited liability entities, the Public Limited Company in Indonesia is designed for broader ownership, liquidity, and capital-raising via the public market. However, that comes at the cost of increased regulation, accountability, and compliance burden.
READ MORE:
If you’re planning to convert your private company into a public one, or start fresh as a PT Tbk, the journey begins with fulfilling structural and capital requirements. You’ll need:
Beyond these basics, the company must ensure good internal controls and financial reporting systems, as public scrutiny will follow closely after listing.
One of the most frequently asked questions is: “How much capital do I need to start a public company?” Under current regulations, the minimum paid-up capital for a PT Tbk is IDR 3 billion. However, for listing on the IDX, the amount may be higher depending on which board you apply to (Main Board or Development Board).
Additionally, the company must meet free-float requirements—that means at least 300 shareholders and a minimum of 7.5% of shares offered to the public. This ensures liquidity in the stock market and prevents ownership concentration.
The process of going public commonly referred to as an Initial Public Offering (IPO) is a legal and financial transformation. Here’s what the typical process looks like:
It’s important to understand that each stage involves legal scrutiny and compliance. Working with seasoned legal advisors is essential to avoid costly missteps.
READ MORE:
Public companies in Indonesia must adopt a dual-board system:
At least 30% of commissioners must be independent, and public companies must also form an Audit Committee, a Nomination and Remuneration Committee, and often a Risk Management Committee. This robust governance framework ensures integrity, transparency, and checks and balances in management.
Transparency is the cornerstone of public trust. That’s why PT Tbk companies are legally required to:
Non-compliance can trigger warnings, fines, or even delisting, making continuous legal support invaluable.
For foreign investors, Indonesian public companies are one of the most accessible and legally secure entry points into the domestic economy. You don’t need to form a local entity or joint venture. You simply purchase shares through IDX, much like in other global markets.
However, the Presidential Regulation No. 10 of 2021 (Positive Investment List) still applies. It outlines which business sectors are open, restricted, or closed to foreign investment. Always consult a legal advisor before investing to ensure you’re compliant with sectoral caps and ownership thresholds.
This ease of access is a major reason why foreign investors are increasingly drawn to Indonesia’s stock market especially in industries like banking, consumer goods, and digital technology.
Going public is more than just raising funds. It’s a strategic transformation that elevates your brand, improves corporate discipline, and attracts serious investors. Benefits include:
Challenges include:
This trade-off between opportunity and control is where careful legal and strategic planning becomes non-negotiable.
READ MORE:
At Kusuma & Partners, we’ve helped companies successfully transition into Public Limited Companies in Indonesia. Based on our experience, here are some key insights:
We offer end-to-end legal support; from internal preparation, due diligence, and regulatory filings, to post-IPO compliance. Your success is our commitment.
Becoming a Public Limited Company in Indonesia is not just a business decision; it’s a transformation. It signals your company’s readiness to grow, be transparent, and gain public trust. But as with any strategic move, the journey demands strong legal footing, long-term commitment, and expert guidance.
Whether you’re planning an IPO, expanding your investor base, or investing in PT Tbk shares, our legal team is here to help you navigate. We’re ready to guide your IPO journey, assist with compliance, or advise on foreign shareholding.
Fill in the form below to get our expert guidance.
“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”
In today’s challenging business environment, unpaid debts can become a serious threat to a company’s financial health and operational continuity. Whether you’re running a local business or managing a foreign-invested enterprise, one common headache persists: clients or partners who default on payment. While trust and verbal agreements might initially guide your transactions, the reality is […]
When it comes to investing in Indonesia, whether in real estate, startup equity, digital assets, or public companies, one crucial element that cannot be overlooked is Capital Gains Tax Indonesia. Many investors focus on profit generation and strategic growth but fail to prepare for the tax consequences of their gains. That’s where problems can begin. […]
Indonesia stands proudly as one of the world’s most resource-rich countries, blessed with fertile soil, strategic geography, and a thriving entrepreneurial spirit. From palm oil plantations in Sumatra to nickel mines in Sulawesi, the archipelago is not only rich in commodities but also rich in opportunities. As global markets become increasingly interlinked, export commodities in […]
