Complete Guide to Getting an Industrial Business License in Indonesia

In Indonesia, the Surat Izin Usaha Industri (IUI), or Industrial Business License, is a mandatory permit for businesses engaged in industrial activities.  

This license ensures that companies operate legally and comply with national regulations. Obtaining an IUI is crucial for businesses aiming to establish credibility, expand operations, and access various benefits. 

What is Surat Izin Usaha Industri (IUI)? 

The Industrial Business License (IUI) is an operational license issued by the Indonesian government to individuals or entities conducting industrial activities.  

These activities involve processing raw materials into finished goods with specific compositions and specifications. The IUI officially recognizes that a business adheres to industrial regulations and standards set by the Ministry of Industry. 

The IUI is distinct from other business licenses, such as the Surat Izin Usaha Perdagangan (SIUP), which pertains to trading activities. While the SIUP covers businesses buying and selling goods or services, the IUI targets manufacturing and production processes. 

Who Needs an Industrial Business License (IUI) in Indonesia? 

Not all businesses in Indonesia are required to obtain an Industrial Business License. This license is needed explicitly for entities involved in manufacturing or processing activities. Below is a breakdown of who must obtain the permit: 

• Manufacturing Companies: Businesses that process raw materials into finished products or semi-finished goods. 
• Businesses with Permanent Facilities: Enterprises operating from fixed locations such as factories or industrial sites. 
• Medium and Large-Scale Enterprises: Companies categorized based on investment value or workforce size, especially those exceeding micro and small business thresholds. 
• Industrial Parks or Zones Tenants: Companies operating within designated industrial areas. 
• Export-Oriented Manufacturers: Manufacturers aiming to export their goods are typically required to have an IUI to meet compliance and quality standards. 

Even if a business already holds a SIUP (Trading License), an Industrial Business License is still required if the company engages in production or industrial transformation activities. Operating without a valid IUI can lead to legal and administrative sanctions. 

READ MORE:

• Business License in Indonesia: Risk-Based Classification Approach
• Understanding Different Types of Business Licenses in Indonesia
• SNI License and Product Registration in Indonesia

Key Benefits of Holding an IUI License 

Acquiring an Industrial Business License is not only a legal requirement but also offers numerous strategic and operational benefits. Here are the key benefits: 

• Legal Compliance and Protection: Holding an Industrial Business License ensures your business operates within the legal framework, minimizing the risk of sanctions or operational disruptions. 
• Access to Government Incentives: Licensed industrial businesses can take advantage of various government programs, including tax incentives, training programs, and funding opportunities. 
• Business Credibility and Trust: An Industrial Business License enhances your business credibility in the eyes of clients, investors, and partners, particularly when entering contractual agreements or participating in public procurement. 
• Easier Expansion and Scaling: A valid license facilitates the application process for expansions, additional permits, or regional licenses as the business grows. 
• Participation in Export Activities: The Industrial Business License is often a prerequisite for businesses aiming to export their products, as it certifies the compliance and standardization of production processes. 

Requirements to Apply for an IUI License 

To obtain an Industrial Business License (IUI) in Indonesia, businesses typically need to prepare several key documents and meet specific regulatory standards. Although specific requirements may vary depending on the type and scale of the business, the everyday essentials include: 

• Company Legal Documents: Proof that Indonesian authorities legally register and recognize your business. 
• Tax Registration: A valid Tax Identification Number (NPWP). 
• Business Identification Number (NIB): Registered through the OSS system. 
• Zoning and Location Approval: Evidence that your business location aligns with local zoning laws. 
• Environmental Permits: Documentation such as UKL-UPL or AMDAL, based on the scale of operations. 
• Operational Details: A general overview of production activities and machinery. 
• Company Address Certificate: This is to confirm your business location. 
• Identification of Business Owners: company directors’ or key stakeholders’ ID and tax details. 

Step-by-Step Guide to Getting an IUI License in Indonesia 

Obtaining an Industrial Business License (IUI) involves several key steps through Indonesia’s Online Single Submission (OSS) system. While the process may seem straightforward, it often involves specific technical and regulatory stages that require meticulous attention to detail. 

• Register your business through the OSS system to obtain a Business Identification Number (NIB). 
• Submit industrial activity details, including basic company and production information. 
• Upload supporting documents as required by the system. 
• Await verification and approval from relevant authorities. 
• Receive the IUI digitally once the application is approved. 

Because regulations and documentation can change, and requirements vary by business size and industry type, engaging with professional services like InCorp Indonesia (an Ascentium Company) is more efficient. This ensures compliance and avoids delays caused by administrative errors or incomplete submissions. 

Streamline Your IUI Licensing with InCorp 

Obtaining an Industrial Business License (IUI) is crucial for any company involved in Indonesia’s manufacturing or industrial operations. It ensures legal compliance and unlocks numerous benefits, including smoother business transactions, eligibility for expansion, and regulatory certifications such as BPOM. 

Managing the application process can be challenging, but working with seasoned service providers helps streamline the process, saving time and reducing potential mistakes. InCorp Indonesia (an Ascentium Company) offers business licensing services to ensure your compliance with regulatory requirements. Here’s how we can help: 

• Expert Guidance: Simplify complex regulations. 
• Time Savings: Avoid delays from incomplete documentation. 
• Compliance Assurance: Stay updated on industrial and environmental laws. 
• End-to-End Support: Assistance from document preparation to license issuance. 

Simplify your IUI licensing process and ensure your business operates legally and efficiently by completing the form below.