Application for IUI and Expansion Licenses is Now Integrated into OSS System

Application for IUI and Expansion Licenses is Now Integrated into OSS System

  • InCorp Editorial Team
  • 3 November 2023
  • 5 minutes reading time

The licensing services for Industrial Business Permits (IUI) and Expansion Permits in Indonesia are now mandatory through the Online Single Submission (OSS) system. The OSS system in Indonesia is one of the government’s efforts to facilitate business for foreign investors looking to start a business.

What is an OSS System?

The OSS system has been in operation since June 2019. This system requires entrepreneurs who wish to start a new business or expand their operations in Indonesia to apply for the necessary permits through the OSS platform, whether they are mandatory or optional permits.

This is good news for foreign investors, as it eliminates the need to visit various government offices to obtain business permits.

Related article: OSS System and Business Identification Number in Indonesia

Industrial Business Permits

According to Regulation of the Minister of Trade of the Republic of Indonesia Number 30/2019, there are two types of permits specifically related to industrial companies: IUI and expansion permits. All industrial companies, regardless of their size, are required to obtain an IUI.

IUI can be categorized into three types:

  • Small IUI for companies with investments below Rp1 billion (excluding land and buildings) and fewer than 20 employees.
  • Medium IUI for companies with investments ranging from Rp1 billion to Rp15 billion (including land and buildings) or assets below Rp1 billion but with more than 20 employees.
  • IUI serves as a permit for companies operating in the raw materials, production, and machinery or equipment storage sectors.

Exemptions for Industrial Business Permits

To operate an industrial business, a company must be located in an industrial zone. However, there are exemptions for companies that meet one of the following criteria:

  • Located in a city/regency that does not have an industrial zone.
  • Categorized as small or medium-sized companies without potential environmental pollution risks.
  • Require specific raw materials and/or are involved in production processes that require a special location.
  • If an industrial company changes factors such as the number of employees, production capacity, investment value, additional industrial classifications, or business location changes, they must update their IUI.

Have you heard that securing an IUI is now easier than before? Requirements have been simplified.

Expansion Permits

Industrial companies are only required to apply for expansion permits if they plan to expand their industrial operations, especially if it involves using natural resources based on an Environmental Impact Analysis (AMDAL).

Just like IUI, expansion permits must be applied for through the OSS. Further information on the permit application procedure can be found here.

Requirements for Industrial Business Permit Registration

For industrial companies, having an IUI is essential. Here are the requirements that need to be prepared for applying or registering an Industrial Business Permit in Indonesia:

  • Photocopy of the Business Identification Number (NIB).
  • Photocopy of the Business Permit Letter (OSS).
  • Application Submission Letter.
  • Request Form (with stamp duty).
  • Photocopy of the Building Permit (IMB).
  • Photocopy of the ID Card of the Company’s Leader/Director.
  • Company’s Taxpayer Identification Number (NPWP).
  • Photocopy of the Company’s Articles of Association.
  • Photocopy of UKL/UPL Documents.

Industrial Business Permit Application

For companies operating in the industrial sector, here are the steps that need to be fulfilled:

  • Business operators must register IUI through the National Industrial Information System (SIINas).
  • Business operators must obtain a statement letter from the relevant regulatory body if the business does not operate in an industrial zone.
  • The business unit must undergo technical verification first.
  • Business operators must report industrial data.
  • In the technical verification stage, companies need to attach environmental and location permits following the current regulations.

Exemption of Requirements

In addition to the above requirements, there are exemptions to support micro, small, and medium-sized enterprises. Businesses at this scale do not need to provide a statement letter to pass the technical verification process but still need to attach an operational eligibility statement through SIINas.

What Is Technical Verification?

Technical verification is required when a company obtains an Industrial Business Permit. This stage is necessary so that the authorities can validate that the business operates in compliance with the regulations. The local government conducts technical verification and has now evolved into a field inspection phase under the latest laws.

The business unit must meet several requirements to proceed with technical verification:

  • Infrastructure and construction facilities are completed.
  • Compliance with all obligations.
  • Attachment of valid environmental and location permits.
  • The technical verification process can be revisited if there are changes in the business, such as investment value, employee count, business expansion, relocation, or changes in business scale.

Past Permits

Since 2018, almost all business permit applications have been done through the Online Single Submission (OSS). Companies with an Industrial Business Permit before the OSS implementation peak must submit a notification to the authorities through OSS to keep their IUI valid as long as there are no changes in the provided information.

To know more about the procedures for the licenses application, you can download here.

Obtain Your Industrial Business Permit with InCorp Indonesia

For professional consultations regarding the acquisition of Industrial Business Permits and expansion permits through OSS, selecting the appropriate business entity, and matters related to establishing a business in Indonesia, our team of professional consultants and legal specialists is ready to assist you.

Contact us now by filling out the form below. We also have offices in Jakarta, Bali, Semarang, Batam, and Surabaya that you can visit to expedite the Industrial Business Permit application process in Indonesia. We are ready to answer your questions.

Related article: International Expansion to Indonesia: Company Set Up

Daris Salam

COO Indonesia at InCorp Indonesia

With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.

Get in touch with us.

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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.