ESTABLISHMENT OF FLIGHT SCHOOL

Indonesia is an archipelago country that consists of more than 17 thousand islands. The need for
flights to connect islands within the country, both scheduled and unscheduled, continues to
increase every year. Consequently, the need for new pilots graduating from flying school is also
increasing. Therefore, establishing a flight school in Indonesia can be a very promising business
opportunity.
The flying school business is a sector that is open for foreign direct investment. Currently, the
maximum percentage of ownership allowed for foreign investment is 49% of the total
shareholding.
Application for the foreign investment may be lodged with BKPM (Indonesia Investment
Coordinating Board).
Since the percentage of ownership that is open to foreign investment in this sector is restricted,
foreign investors will need to engage in a joint venture with a local company. A joint venture
agreement between the foreign and local investors shall be made prior to preparations of articles
of association of the company.
Both the joint venture agreement and the articles of association shall be lodged together with the
foreign investment application to BKPM. Once BKPM has issued an approval, applications for
the permits (business permit and additional permits such as business permit in the field of
aviation education and/or training and permit for non-commercial air transport activities) can be
submitted to BKPM through the Online Single Submission (OSS) system.
To carry out the business, the company must own at least one aircraft and in possession of
another aircraft by way of lease. Import of light aircraft may also be done once the relevant
approval and permits have been obtained from the Ministry of Transportation and the Ministry of
Finance.
______________________
Said, Sudiro & Partners
Indonesian Legal Consultants
Sampoerna Strategic Square
South Tower, Level 30
Jl. Jend. Sudirman Kav. 45 - 46
Jakarta 12930 Indonesia
Phone: (62-21) 575.0983
Fax: (62-21) 575.0803
Website: www.ssplegal.com
Emails: mail@ssplegal.com
sdsdp@cbn.net.id