Your Guide to Building Permit (IMB) for UMKM in Indonesia

Your Guide to Building Permit (IMB) for UMKM in Indonesia

  • InCorp Editorial Team
  • 18 May 2020
  • 4 minute reading time

An IMB in Indonesia is something that every investor must know if they want to start a business in the country.

What is IMB in Indonesia then? IMB stands for Izin Mendirikan Bangunan and it is a legal permit or building registration document in Indonesia that allows the construction of buildings and makes sure that the constructed buildings are consistent with the land allocations.

An IMB also ensures that the building’s design and structure meet the purposes of use, comfort and safety criteria under Indonesian Law.

An IMB is used from the beginning of the building construction until the end of the lifetime of a building. The buildings under the IMB permit are mostly utilised for residential and commercial purposes.

The Importance of IMB in Indonesia

Since the IMB is used for the entire lifetime of a building starting from its construction, an IMB is very important for investors who want to start a business in Indonesia.

For business owners who’d like to buy or rent a building in any part of the country, an IMB is compulsory and it is the landlord’s or building owner’s responsibility to secure the permit.

When you buy or rent a building without an IMB, it is for certain that you go against the law and may face severe penalties.

Not only should you obtain an IMB, but you also need to make sure that the IMB you acquire from the authority or landlord has the written purpose matching the real purpose of the building you use for residence or commercial activities.

Before you go ahead and get yourself an IMB, you need to check the spatial planning and the land zoning regulations in accordance with your area you wish your building to be constructed on. This is because certain lands or zones allow certain uses of a building.

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Guide to IMB for UMKM in Indonesia

There is a new type of IMB stated under the Second Amendment, particularly the building IMB for warehouses of micro-, small- and medium-scale enterprises, or Usaha Mikro, Kecil, dan Menengah (UMKM). This new type of permit is also known as IMB for UMKM Buildings.

The following are the details of different IMBs for UMKM Buildings according to the building areas:

1. UMKM buildings smaller than 1,300m2

  • For complex buildings that are not utilised in the interest of the public
  • The business function index calculation must be 0.5% for the IMB retribution amount


2. UMKM buildings of 1,300m2

  • Prototype designs are used
  • Process of the IMB issuance is technical plan documents assessment, written approvals issuance and IMB documents issuance
  • The regional government must implement the said process within three business days upon the IMB application submission
  • The business function index calculation must be 0.5% for the IMB retribution amount


3. UMKM buildings larger than 1,300m2

For complex buildings that are not utilised in the interest of the public

How Cekindo can Assist

Obtaining an IMB in Indonesia can be of immense benefit to set up a business for many business owners and entrepreneurs.

Due to the pro-business policies over the years in Indonesia, the country’s regulations are revised and changed from time to time. Thus, many investors find it challenging to go through all the rules and procedures before making an informed decision.

The lack of knowledge and unawareness of the current business environment can lead to undesirable outcomes such as unnecessary overheads and wasted time.

To make things easier for you to secure an IMB in Indonesia, we at Cekindo have the top experts to assist you through the entire process. Cekindo has the capabilities to deliver the solutions your business needs to move forward.

If you’d like to speak to one of our business consultants, please submit your details through the form below and we’ll be in touch with you shortly.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

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Disclaimer: The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.

We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.

We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

Frequent Asked Questions

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.

Yes, you must apply for it to be able to issue work permits for your foreign employees. This permanent business license is also a prerequisite for the applications for other business licenses and import licenses.