For foreign entrepreneurs planning to operate in Indonesia, understanding the true cost of running a business is just as important as choosing the right sector or location. While Indonesia remains one of Southeast Asia’s most attractive investment destinations, operating expenses vary significantly depending on region, industry, and company structure.
As Indonesia enters 2026, rising wages, stricter compliance requirements, and increasing demand in tourism and service sectors make accurate cost estimation essential for sustainable business planning.
This article provides a realistic breakdown of operating expenses for foreign-owned companies (PT PMA) in Indonesia, helping investors, directors, and business owners prepare financially before entering the market.
Core Operating Cost Categories for PT PMA Companies
Running a business in Indonesia typically involves the following recurring cost components:
- Company setup and licensing
- Office or commercial space rental
- Employee salaries and benefits
- Tax and accounting compliance
- Utilities and operational overhead
- Expatriate-related costs (visa, KITAS, housing)
Each category is influenced by Indonesian regulations and regional market conditions.
Company Setup and Licensing Costs
Initial Setup (One-Time)
Estimated costs:
- PT PMA establishment and OSS registration
- NIB and business licensing
- Notary deeds and legal documentation
Estimated range:
IDR 25 million – IDR 60 million (depending on business activities and risk level)
While setup is a one-time cost, incorrect licensing can lead to higher long-term compliance expenses.
Office, Commercial Space, or Virtual Office Costs
Physical Office or Commercial Space
Estimated monthly costs:
- Bali: IDR 8 – 25 million
- Lombok: IDR 5 – 15 million
- Secondary cities: IDR 4 – 12 million
Virtual Office (Allowed for Certain Sectors)
Estimated monthly costs:
Virtual offices are commonly used by consulting, digital services, and holding companies, subject to OSS approval.
Employee Salaries and Labor Costs (2026 Estimate)
Indonesia applies regional minimum wages (UMK), which increase annually.
Estimated Monthly Salary Ranges:
- Administrative staff: IDR 4 – 6 million
- Skilled staff / supervisors: IDR 6 – 10 million
- Managers: IDR 12 – 25 million
Mandatory Labor Costs:
- BPJS Kesehatan (health insurance)
- BPJS Ketenagakerjaan (employment security)
Employer contribution typically adds 7–10% on top of gross salaries.
Tax, Accounting, and Compliance Expenses
Monthly & Annual Compliance
Estimated costs:
- Monthly tax reporting: IDR 1.5 – 3 million
- Annual corporate tax filing: IDR 5 – 10 million
- LKPM investment reporting (quarterly/semester): IDR 2 – 4 million per report
Proper compliance is critical, as late or incorrect reporting can affect NIB validity, business licenses, and director KITAS.
Utilities, IT, and Operational Overheads
Estimated monthly costs:
- Electricity & water: IDR 1 – 3 million
- Internet & telecom: IDR 500,000 – 1.5 million
- Software subscriptions & IT tools: IDR 500,000 – 2 million
These costs vary depending on business size and digital reliance.
Expatriate and Director-Related Costs
For foreign directors and commissioners:
Annual Costs:
- KITAS & work permit: IDR 15 – 25 million per person
- Health insurance: IDR 10 – 20 million
- Housing (rent): IDR 60 – 200 million per year (location dependent)
These expenses should be integrated into overall operational planning.
Estimated Monthly Operating Cost Summary (Small–Medium PT PMA)
| Cost Category |
Estimated Monthly Cost (IDR) |
| Office / Virtual Office |
2 – 15 million |
| Staff Salaries & BPJS |
20 – 60 million |
| Tax & Accounting |
2 – 5 million |
| Utilities & IT |
2 – 5 million |
| Miscellaneous Operations |
2 – 5 million |
| Total Estimated Range |
28 – 90 million |
Actual costs depend heavily on industry, location, and scale of operation.
Common Cost Planning Mistakes by Foreign Investors
Many foreign investors underestimate costs due to:
- Ignoring BPJS and labor obligations
- Using incorrect business classifications
- Failing to budget for compliance reporting
- Mixing personal and corporate expenses
- Assuming Bali costs apply nationwide
Accurate planning avoids regulatory risk and financial inefficiency.
Conclusion
Indonesia remains cost-competitive compared to many global markets, but cheap does not mean unstructured. Businesses that succeed in Indonesia in 2026 are those that:
- Budget realistically
- Respect regulatory requirements
- Plan regionally, not generically
- Work with experienced local advisors
With the right structure, operating costs in Indonesia remain manageable, predictable, and scalable. Every business model has different cost dynamics.
Indoned Consultancy assists foreign investors with:
- Detailed operating cost projections
- PMA setup and licensing
- Tax, labor, and LKPM compliance
- Expatriate structuring and KITAS management
Contact Indoned Consultancy today for a free consultation and receive a tailored cost estimate for running your business in Indonesia in 2026.
Disclaimer
The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.
