Memo: closing a company in Indonesia or moving it to inactive status

A company registered in Indonesia is not closed automatically. If you are no longer running the business, the company still has reporting, tax and licensing obligations. Unfiled reports are a serious violation: they can lead to fines, restrictions in government systems and other sanctions.

If a PT PMA or PT PMDN in Bali has stopped operating, the owner has three options: liquidate the company, apply for inactive tax status, or do nothing. The third option is the riskiest.

How to choose the right scenario

If you are choosing between selling the company and closing it, compare both options in the article “Close or sell a PT PMA”.

What inactive status is

Wajib Pajak Nonaktif is the inactive tax status of a company: it carries out no activity and receives no income, but its NPWP tax number has not yet been closed. The procedure for moving to this status and returning from it is set by PMK 81/2024 and PER-7/PJ/2025.

Stopping work does not by itself move a company to inactive status. You need to submit an application to the tax office through its online system, Coretax, and explain why the company is changing its status. Under the rules, the status is granted to a company that does not meet the requirements for a taxpayer and whose NPWP is being closed or has not yet been closed. A company that has simply suspended operations formally remains a taxpayer until it is dissolved, so the application may be rejected. The tax office can also assign the status on its own if the company has had no tax returns, payments or tax withholdings for five years in a row, and has no debts, audits, disputes or tax incentives.

Under the rules of the Indonesian tax authority (DJP — Direktorat Jenderal Pajak), a company with Nonaktif status does not file tax returns starting from the tax year in which it received the status. If the company is a VAT taxpayer (PKP — Pengusaha Kena Pajak), this status must be removed first, and only then can the company be moved to Nonaktif. On application, PKP status is removed only after a tax audit. The tax office issues its decision within 6 months.

Nonaktif concerns taxes only

The company's other obligations remain in force: in OSS (the government business licensing system), toward the Ministry of Law and under contracts.

The company files the LKPM investment report in OSS as before: this obligation is tied to the business registration number NIB and to the investment law. A PT PMA files LKPM every quarter; a PT PMDN files depending on its size: small companies once every six months, while micro businesses do not file.

The PT annual report also remains: it is approved by the shareholders, and the resolution is filed with the Ministry of Law through its SABH system. The current requirements for the report and what happens if it is not filed are covered in detail in the article “PT annual report in Indonesia”.

The agreement for the registered address also remains in effect. The supervisory authorities in Bali pay particular attention to companies with virtual offices, but there is no general ban on a virtual office for a PT PMA.

Licenses and the NIB are not frozen when a company moves to Nonaktif, and the OSS procedures must still be followed.

If the company no longer plans to operate and all its licenses have been revoked, the law requires it to be liquidated.

In practice, a foreign employee of an inactive company cannot get a KITAS issued or extended. If a foreign founder or director wants to stay and live in Bali, the question of their KITAS must be resolved before the company is moved to Nonaktif status.

Inactive status closes neither the company nor the NPWP: to end the business for good, liquidation is needed. The status is lifted on the company's own application or by decision of the tax office, if it sees that the company is operating again, has filed a return, paid tax or done something else the tax office treats as a return to activity. For example, the company received revenue and the tax office received data about it. Returns and payments for periods before the move to Nonaktif do not affect the status.

Taxes and reporting: what to check before closing

Before closing a company, you need to check its tax history: whether returns were filed, whether taxes were paid, and whether any audits or disputes are still open. Check the returns and payments for the last five years: within that period the tax office has the right to assess additional tax. For the nearest deadlines, see the PT tax calendar for 2026–2027. If something is not in order, fix it before starting liquidation — the process will then go faster and cost less. If the company is a VAT taxpayer (PKP), the application to remove this status is filed before the application to close the NPWP, or at the same time. PKP status is removed after a tax audit, and the decision takes up to 6 months, so it is better to start in advance. Closing the NPWP does not mean the tax office can no longer make claims for past periods.

What to do about the KITAS of the founder and director

If a foreign owner or director of the company lives in Indonesia and wants to stay, the KITAS must be reissued: by changing the sponsor or the purpose of stay. This is done without leaving the country.

Closing a KITAS means obtaining an EPO (Exit Permit Only), an exit permit after which the KITAS ceases to be valid. For a foreigner who is in Indonesia, the EPO is issued no later than 3 working days after the fee is paid. Once received, the person must leave the country within 7 calendar days. If the person has already left, the KITAS is closed through a separate procedure, and there is no need to return to Indonesia for it.

If the sponsoring company does not file the application, in some cases the investor can apply for the EPO to the immigration service on their own. This requires documents confirming that the company is inactive or that the person is no longer a director or shareholder. The sponsor can be changed on the same basis.

The procedure for closing or reissuing a KITAS depends on the type of residence permit, your situation and the company's documents. The founder's immigration status should be clarified with a legal specialist in advance, before the NIB is revoked.

How the PT liquidation process works

The general liquidation rules are set by the Indonesian PT law, No. 40/2007 (UU 40/2007). The procedure has five stages.

Stage 1. Liquidation resolution

At the general meeting (RUPS — Rapat Umum Pemegang Saham), the shareholders adopt the resolution and appoint a liquidator. The resolution is formalized by a notary. If no liquidator is appointed, by law the company's full board of directors acts as the liquidator.

The liquidator organizes the procedure, notifies interested parties, deals with creditors' claims and winds up the company's affairs.

Stage 2. Publication and notification of creditors

Within 30 days of the dissolution date stated in the RUPS resolution, the liquidator publishes a notice in the state gazette Berita Negara and in a nationwide Indonesian-language daily newspaper. A local Bali newspaper will not do. As soon as the notice is published, within the same 30 days the notary files a notification with the Ministry of Law (Ditjen AHU) through the SABH system (Sistem Administrasi Badan Hukum), attaching the RUPS deed and proof of publication in the newspaper. After review, a letter confirming acceptance of the notification (surat penerimaan pemberitahuan) arrives in the system. The company is assigned the status “dalam likuidasi”.

Creditors can submit their claims within 60 days of the date of the later of the two publications — in the newspaper and in Berita Negara.

Stage 3. NIB revocation through OSS

In the OSS system, the liquidator goes through the NIB revocation procedure. Before that, you need to check the corporate documents and the state of the tax obligations, and obtain the surat penerimaan pemberitahuan from the notary.

The NIB revocation procedure is governed by Permen Investasi/BKPM 5/2025.

Stage 4. Closing the NPWP tax number

This is one of the most complex stages: after the application to close the NPWP is filed, the tax office carries out an audit and may assess additional taxes. Under PMK 81/2024, the decision is made within 12 months. The deed of dissolution of the company is attached to the application. The NPWP will be closed only if the company has no tax debt, is not subject to a tax compliance audit, an audit for signs of a tax crime, an investigation or criminal prosecution, and the tax office and the court are not considering any of its appeals: objections, lawsuits, appeals, applications for a reduction of penalties or for correction of errors. If the application was refused only because of a debt and the debt was paid within a month, there is no need to file a new application. Other reasons for refusal are covered in the article “NPWP deregistration refused in Indonesia”.

Stage 5. Completing the liquidation

At the general meeting of shareholders, the liquidator reports on settlements with creditors, closing of the account and distribution of the remaining assets. If everything is in order, the RUPS approves the report and releases the liquidator from liability (pelunasan dan pembebasan). This resolution is formalized by a notary. No later than 30 days after the meeting, the liquidator publishes the results in a newspaper and, through the notary, notifies the Ministry of Law in the SABH system. The ministry records the termination of the legal entity's status and announces it in Berita Negara.

What to close before the end of liquidation

If the company has employees, before liquidation is completed you need to settle with them and meet the social insurance requirements. Payments are calculated under the labor law UU 13/2003 as amended by UU 6/2023 and under regulation PP 35/2021. An employee is entitled to severance pay, long-service pay and compensation, for example for unused leave. The amount depends on length of service, the type of employment contract and the reason for closing the company, and is calculated under the rules in force on the date of dismissal. The employee must be warned of the dismissal in writing at least 14 working days in advance. Parliament passed a new labor protection law in October 2026, but it has not yet come into force. When it takes effect, the payment procedure may change, so check the current rules before dismissing employees.

BPJS obligations must be closed separately: pay off any contribution arrears, deregister the employees, submit an application to close the company and obtain confirmation. In BPJS Ketenagakerjaan, employees are deregistered online in the SIPP system or at a branch office, and the company itself by a written application to the branch where it is registered. Usually a company closure letter and supporting documents are required: the deed of dissolution, the letter from AHU and employee data. In BPJS Kesehatan, employees are deregistered through the e-Dabu corporate account or at a branch office, where you can also ask how to close the company's registration. Registration with BPJS Ketenagakerjaan and with BPJS Kesehatan is closed separately, otherwise contributions will keep accruing.

A corporate bank account can be closed only by an authorized representative of the company. After the liquidation resolution, that representative is the liquidator appointed by the shareholders, or, if none was appointed, the board of directors. Check the procedure and the list of documents with your bank. Usually required are a closure application, the representative's ID (for a foreigner, a passport and KITAS or KITAP), documents confirming their authority (the shareholders' resolution, the deed appointing the liquidator, the letter from AHU with the “in liquidation” notation), as well as the constituent documents, NIB, NPWP, the company seal and bank cards. It is best to close the account at the very end, when taxes and BPJS contributions have been paid, salaries have been paid out, creditors have been settled, the remaining assets have been distributed, and the tax office has already made its decision on the NPWP. Make sure no active automatic payments are left in the online banking, for example for a virtual office. After closing, ask the bank for written confirmation and keep it together with the other liquidation documents.

What happens if you simply abandon the company

If the company is in fact not operating, but the owners have arranged neither Nonaktif nor liquidation, the obligations remain.

For unfiled returns and unpaid taxes from the period when the company was operating, the tax office assesses fines and interest, and after an audit it may assess additional tax. For an unfiled LKPM, administrative measures are possible, for example NIB revocation or fines, and if the annual report is not filed, the company's access to SABH may be restricted. The directors and shareholders may be held liable. If the tax debt is 100 million rupiah or more and the tax office doubts the debtor's good faith, directors, commissioners and shareholders may be banned from leaving Indonesia for up to 6 months, and the ban may be extended for a further period of up to 6 months.

If access to OSS is already restricted, look into the possible reasons: “Why a company’s OSS account gets blocked”.

Checklist: what to do before closing a PT

• Choose a scenario: liquidation or an application for Nonaktif status.

• Check the reporting: tax returns, payments, LKPM and the PT annual report.

• Remove PKP status if the company is registered as a VAT taxpayer.

• Resolve the KITAS of foreign founders and directors: reissue or close.

• Adopt the RUPS resolution on liquidation and appoint a liquidator.

• Publish the notice for creditors and notify the Ministry of Law through SABH.

• Revoke the NIB through OSS in the prescribed manner.

• Settle labor matters: payments to employees and BPJS obligations.

• Close the NPWP once the requirements of the tax procedure are met.

• Complete the settlements and formalities: close the bank account and obtain confirmation that the liquidation is complete.

Need help closing your company?

Legal consultation and full-service liquidation can be ordered on the service page: Closing a PT PMA company.

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