Business license in Indonesia is an essential matter for any business sector in order to conduct business activities. In Indonesia, there are licenses or permits that need to be obtained in order to perform business activities legally.
Either setting up a company, market your products, or conducting trading activities. Government will issue the licenses once the business has already been fulfilling any requirements based on the regulations.
Why Obtaining Business License?
Obtaining business license is mandatory for any business entity in Indonesia, whether they are small and medium enterprises or large scale companies. Licenses are becoming critical to companies since this would legalize their business activities in Indonesia. Without licenses your business activities may potentially be closed by government.
How are the regulations?
Based on 2015 regulation, all newly-formed foreign companies should apply for business license by providing their financial audit in order to be able to apply for permanent business license and other necessary licenses such as import license, etc. Through this new regulation, the government intend to ensure that every foreign investor will realize their investment plan instead of only submit their investment plan to the Investment Coordinating Board (BKPM) on the paper. Therefore foreign investments in Indonesia can be proved that are running well according to its purpose.
There are classifications of Business License for PMA in Indonesia, as follow:
- A company engaged in general trading, goods, or other services should have a business license;
- A company engaged in the manufacturing industry outside of oil, gas, and geothermal energy, should have an industrial business license;
- A company engaged in other industries, such as construction, should have construction business license; and
- Other licenses based on the company’s business activities.
How are the procedure and requirements?
Business License Requirements:
A permanent business license will be given to a PMA Company once it meets the following requirements:
- Has been in production phase
- Has exceeded the allotted time (3 years)
- A PMA Company may apply for a permanent license to the Head of Investment Coordinating Board (BKPM) or Head of Region Investment Coordinating Board (BKPMD). Regarding the issuer, it depends upon the foreign investment license, the business activities, and also the domicile of the company;
- The applicant should complete and sign the application form for a business license at BKPM or BKPMD office and attach the required documents; and
- BKPM or BKPMD officers will check all the files and the eligibility and completeness of application, and then issue the permanent license certificate.
- Copy of permit approval for investments;
- Copy of deed of establishment and its amendments;
- Copy of company domicile, NPWP, and TDP;
- Copy of contract/rental of business premises and certificate from the owner of the building;
- Copy of ID card and passport of KITAS for foreigners;
- Nuisance Act Permit and Location Permit (SITU);
- List of office equipment and industrial equipment; and
- Company organizational structure.
How to apply for business license?
- After fulfilling all documentation requirements, the processing time for a business license application takes 14 working days;
- A business license is generally valid for 30 years;
- Detailed information on how to obtain a business license is here!
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