What is Perseroan Terbatas (PT)

PT is an acronym for Perseroan Terbatas, a term that represents a limited liability company in Indonesia. A Perseroan Terbatas (PT) is a business entity that is formed and acts per commercial law.

Any Indonesian company directly receives foreign investments must take the form of PT. The Indonesian Perseroan Terbatas may be classified as an open, closed, domestic, foreign, individual, or a general public PT. Most are a limited liability company (LLC) offering shares to the public.

BREAKING DOWN Perseroan Terbatas (PT)

An investor in an Indonesian limited liability company (LLC) or PT is liable only for the amount of their original investment. The Articles of Association of PT outline share ownership and the portion of the whole of shares ownership.

The .Indonesian law governs the types of businesses which can operate as a Perseroan Terbatas (PT). Governance and administration of Perseroan Terbatas (PTs) are handled on a regional basis and the rules may vary for each region of the country. The license requirements for each business will depend on the type of work in which they will be involved. These are English-speaking equivalents, specific rules and guidelines are adherent to Indonesia law regarding business entities. 

Countries often define their business in different terms and with various stipulations. Although a Perseroan Terbatas mirrors the limited liability company of the United States, there are fundamental differences attributed to the governing laws. Comparatively, a PT in Indonesia is the equivalent to a public limited company (PLC) in the United Kingdom and the Republic of Ireland. 

Types of PTs in Indonesia

There are a few basic types of Perseroan Terbatas (PTs) in Indonesia. An open PT is an LLC that offers shares to the public. Typically, this type of LLC shares ownership of a bearer not in the company’s name and thus buying and selling stocks is relatively straightforward.

A closed PT is an LLC that offers only private shares and restricts the sale of those shares to specific individuals or groups. This limitation is most common for family-owned and operated companies.

A domestic PT is an LLC that physically exists and offers its goods or services in Indonesia. These types of PTs must strictly comply with rules governing businesses in the Republic of Indonesia.

An individual PT is an LLC with shares which issued to, and owned by, only one person. This person, typically the owner or director of the company, has sole authority within this type of business structure.

A foreign PT is an LLC that is incorporated in, and subject to, the laws of a foreign country. When an external company establishes a PT in Indonesia, the business is also subject to the laws and regulations of Indonesia.

A general public PT is an LLC that has a free-share type ownership system. Any entity may own shares of this type of company. The structure is similar to an open PT. However, shares of this type of company can also be listed on the stock exchange.