With regard to business license in Indonesia, the Ministry of Industry has issued Regulation 30/2019 recently and this new regulation became effective on October 18, 2019.
The purpose of Regulation 30/2019 is to amend Regulation 15/2019 and simplify the process requirements on the Issuance of Industrial Business Licenses and Expansion Licenses under the Framework of Electronically Integrated Business Licensing Services for businesses in Indonesia.
Essentials about Industrial Business License in Indonesia
Before going further into the latest regulation, it is important to understand the essentials about IUI.
Businesses who are required to obtain IUI are those that are mainly engaging in raw materials, production outputs and machinery or equipment storage.
IUI itself has three different categories. If you are running a small industrial company, then the right IUI for you is called Small IUI. Medium IUI should be obtained by medium industrial companies. And, Large IUI is for large industrial companies.
To determine whether your company is categorised into small, medium or large industrial company, you need to take a look at the number of employees being hired by your company and/or how much investment being poured into the company.
What Commitments are Compulsory to Secure Industrial Business License (IUI)?
The compulsory commitments for IUI are now simplified under Regulation 30/2019 and can be broken down into the following details:
- Businesses need to register the IUI within the National Industrial Information System (SIINas).
- Businesses must obtain a statement letter from Director-General for Industrial Area Organisers if they are not required to be located in industrial areas.
- Businesses must go through a technical verification.
- Businesses shall submit industrial data
Unlike previous regulation, both the environmental permit and location permit have become compulsory during the technical verification stage under Regulation 30/2019.
Are There Any Exceptions?
The IUI commitments exceptions were made under this new regulation in an attempt to support micro, small and medium enterprises. For the mentioned micro, small and medium businesses, statement letters will no longer be required in order for them to go through the technical verifications.
Although a statement letter is not required, they will still have to submit statements in regard to their operational readiness through the SIINas.
What about Technical Verification?
Technical verification stage has now replaced the field examination stage in this new regulation. When a business has acquired its IUI, technical verification is required to verify if the business is in compliance with the compulsory commitments. The technical verification is implemented by the regional government.
Businesses must fulfill the below requirements in order to be eligible for the technical verification:
- Their infrastructure and facilities establishment must have already been completed.
- They must have already fulfilled all the compulsory commitments.
- They have to secure a valid environmental permit and location permit.
Businesses may be required to go through the technical verification again if the following changes occur to the business:
- Investment value and number of employees
- Business premise expansion or relocation
- Installed capacity
If You Have Any Complaints
If businesses find that the authority has carried out the technical verification process falsely, such as law violation or unethical actions, they can submit a complaint report through the SIINas. The report must be submitted within 30 days, starting from the day of submission of the technical verification application.
Regarding Previous Licenses
Businesses that have already obtained IUI before the enforcement of Online Single Submission (OSS) system on June 21, 2018 are required to submit a notification to the authority through OSS to address their IUI. After the submission of the notification, the IUI will remain valid as long as there are no changes made to the IUI.
What is OSS?
To encourage more foreign investments in Indonesia, the government has created and implemented numerous policies that are as business-friendly as they can be, including the launching of the OSS system. The OSS started its operation in June 2019. In short, the OSS mandates all entrepreneurs, both local and foreign, to apply for necessary licenses through the system prior to being able to start business operations in the country.
Business License Application in Indonesia with Cekindo
In Indonesia, starting a business is a relatively complex procedure even though the business license application process has been simplified to a greater extent. Cekindo can help you go through the entire process smoothly if you provide us with all the necessary documents, and we will do the heavy lifting to satisfy and comply with all other requirements.
There is no reason for your business license to be rejected with complete and valid paperwork, as well as Cekindo’s expertise and assistance. Our goal is to foster efficiency and pro-business environment in Indonesia, transforming it into a better destination for entrepreneurs and startups.
Talk to one of our friendly experts at Cekindo now to save you precious time and resources. Fill in the form below.