Licensing issues were established by Presidential Instruction No. 5 Year 1984 date of 11 April 1984 on Guidelines for Implementation and Control Permissions on the line of business. The rules ensure that any business in Indonesia can apply for a license smoothly, legally and in a structured manner.
A business license in Indonesia is required for any business activity by small and medium enterprises as well as large-scale businesses, includingforeign investment companies. Having a business license identifies your business and its operation as legitimate and permitted by the appropriate authorities.
Business Licenses are issued by the Investment Coordinating Board (BKPM) or Regional Investment Coordinating Board (BKPMD) to a company that was established within the framework of a foreign investment company (PMA). A business License is issued as an operating permit to conduct commercial business activities in the trade of good and services.
Classification of business license for PMA
- A company engaged in general trading, goods or other services should have a business license.
- A company engaged in the manufacturing industry outside of the oil, gas and geothermal sectors should have an industrial business license.
Business license requirements
A permanent business license will be given to aPMA if it meets the following requirements:
- Has been in productio
- Meets the time limit given (3 years)
- A PMA can apply for a permanent license to the Head of BKPM or BKPMD (BKPM region/province). It depends upon the foreign investment license, whether it will issued by the BKPM or the BKPMD. It also depends upon the domicile of the company.
- The applicant completes and signs the application form for a business license at BKPM office or the BKPMD and attaches the required documents.
- BKPM or BKPMD officers will check all the files and the eligibility and completeness of the application, and issue a 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 or KITASfor foreigners.
- Nuisance Act Permit and Location Permit (SITU)
- List of office equipment and Industrial Equipment
- Company organizational structure
Based on new regulation form the beginning of 2015 all new foreign companies and foreign companies which till now still don´t have business license needs to have financial audit before they can apply for a permanent business license and also other connected licenses (import license, etc.) which are critical for a lot of companies.
This new regulation wants to ensure that all foreign investors realized their an investment plan and not only submitted an investment plan to Investment Coordinating Board (BKPM) just only on paper, which often happened in the past.
Time processing and validity
- The process for a permanent business license takes 14 working days.
- A permanent business license for a PMA is valid for 30 years.
2020 Business License Application with OSS
To facilitate and streamline the business licensing process in Indonesia, the government has implemented what is called the Online Single Submission (OSS) system.
With OSS, all business entities will have to register online. After completion of registration at the OSS, each business will automatically get a Business Identity Number NIB (Nomor Induk Berusaha) one day after the registration, provided that the submitted documents are complete and meet the requirements.
A Business License will also be granted alongside the NIB if your business does not require other licenses, which depends on the business sector your company is engaged in.