Licensing services for Industrial Business Licenses (Izin Usaha Industri – IUI) and Expansion Licenses are required to be processed through the Online Single Submission (OSS) system in Indonesia.
What is OSS System?
The Indonesian government has adopted several business-friendly policies to make it simpler for foreign investors to jumpstart their businesses in the archipelago, including the launching of OSS system. Starting to operate in June 2019, OSS requires enterpreneurs who intend to start or expand their business activities in Indonesia to use the OSS system to apply for necessary licenses, both mandatory and optional.
This is good news for foreign entrepreneurs as investors now no longer need to apply and collect their business licenses by visiting several government offices.
Related article: OSS System and Business Identification Number in Indonesia
Licenses for Industrial Companies
IUI
Enforced under Regulation 15/2019, there are two licenses that are specifically related to industrial companies: IUI and expansion licenses. It is mandatory for all industrial companies, regardless of size, to obtain IUI.
IUI can be categorised into three different categories:
- Small IUI for small companies
- Medium IUI for medium companies
- Large IUI for large companies
Whether a company belongs to a small, medium or large category is determined by its number of employees and/or investment value.
In addition to its main function, IUI also serves as a valid license for companies engaging in raw materials, production outputs and machinery or equipment storage.
To operate an industrial company, it needs to be located within industrial zones. Certain exceptions apply to companies who meet the following conditions:
- Situated in regencies/cities with no industrial zones available
- Categorised as small or medium companies that have no potential risks of causing any widespread environmental pollution, or
- Requiring special raw materials and/or engaging in production processes that need to be executed in special locations.
In case your industrial company makes changes to any of the following, you will need to amend your IUI:
- Number of employees
- Built-in production capacity
- Investment value
- Addition of industrial classification, and
- Addition/transfer of business locations.
Have you heard that securing an IUI is now easier than before? Requirements have been simplified.
Expansion License
Industrial companies are only required to apply for an expansion license when they decide to expand their industrial operations. This regulation especially applies to industrial companies that make use of natural resources based on Environmental Impact Analysis (Analisis Mengenai Dampak Lingkungan – AMDAL).
The same as IUI, expansion license must also be obtained through OSS.
To know more about the procedures for the licenses application, you can download here.
How Cekindo Can Help
For professional consultation on obtaining IUI and expansion licenses through OSS, suitable business entities, and other matters related to business set up in Indonesia, our team of professional consultants and legal specialists are at your disposal.
Get in touch with us by filling in the form below. We also have offices in Jakarta, Bali and Semarang. Come to one of our offices and we will be happy to answer your questions.
Related article: International Expansion to Indonesia: Company Set Up
