Establish an Agricultural Business in Indonesia

Updated on Tuesday 24th July 2018

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Foreign investors who want to operate in Indonesia are allowed to explore the possibilities offered by the agricultural industry, one of the most prolific economic sectors at the moment. Foreigners must comply with the Right to Cultivate Act under which they can lease private or state-owned land plots and cultivate various crops on them. These leases are granted for a period of 35 years.

Below, our company formation agents in Indonesia explain how foreign investors can open agricultural businesses in this country.

Foreign entrepreneurs opening companies in agriculture in Indonesia

In order to be allowed to operate businesses in agriculture, foreign citizens must first register a company with the Indonesian Trade Register. The most employed business form which allows foreign ownership is the PT PMA (limited liability company with full foreign ownership).

Our Indonesia company incorporation consultants can assist with this procedure.

Licenses and permits for agricultural companies in Indonesia

Once the agricultural company is registered, the business owner must comply with several other requirements, among which:
  •           they must apply for a location permit in order to buy or lease the land they want to cultivate;
  •           they must register the land with the Land Office and National Land Agency in Indonesia;
  •           apply for a domestic trade license if he or she intends to sell the cultivated products;
  •           obtain commodity and foreign trade licenses if the products will be exported.

We can also offer information on how to establish a trading company in Indonesia.

Other requirements for agricultural companies in Indonesia

Under the Farmer Protection and Empowerment Law, all agricultural companies are required to ensure their business. They must conclude special types of insurances which will protect their production with respect to:
  •           natural disasters and climate changes;
  •           insect attacks;
  •           infectious diseases in the case of animals.

Farmers are required to pay a certain amount of money as a premium in accordance with the type of insurance concluded.

For full information on the rights of foreign investors to open agricultural companies in Indonesia, please feel free to contact our company registration advisors.