Business licenses and permits are needed to operate professionally, and as a business, it is your responsibility to ensure that you have the right documents. Let us help you determine which licenses your business will need, prepare the correct documents, and obtain them.
A business license is a document that grants you the right to operate a business. License requirements vary depending on the types of business activities or intellectual property of your company. Obtaining business licenses is mandatory for any business entity in Indonesia, whether for small and medium enterprises or large-scale companies. Without a license, your business becomes susceptible to closure by the government authorities.
It is required by the government that you obtain a business license if your business concerns a specific industry or requires a high level of liability. In Indonesia, there are four types of business and commercial/operational licenses you may need:
Issued via the OSS system issue and become immediately effective. Businesses that include in type 1 among others is a consulting company. The timeline for business license type 1 is 1-2 working days.
Issued via the OSS system issue but do not become immediately effective. Instead, these licenses become effective after businesses have fulfilled the relevant commitments. Provisions relating to these business licenses and commercial/operational licenses are to be further stipulated by the head of the BKPM.
Some examples of the businesses in which a further license will be required are (these lines of businesses are included in the business license type 2-4):
For license types 2, 3 and 4, the timeline will vary depending on the fulfilment of the commitments where each activity might have different commitments. However, since the government has simplified the process, the license will be issued within 1-2 days upon the fulfilment of commitment.
Let us help you apply for the required licenses you need to run your business in Indonesia.
The government introduced an online application process in September 2019, the Online Single Submission (OSS) which greatly simplifies the process of obtaining a license for your business. As part of the incorporation process, it is necessary to file a business license application on OSS, where a business identification number (NIB) will be received. Depending on the industry in which you are involved in, it may be necessary to obtain a further license before you can commence business. In November 2019, the government mandated the Investment Coordinating Board (BKPM) to handle all forms of licensing previously handled by a variety of government institutions in a move that is expected to improve the ease of doing business in Indonesia.
A new company will, initially, only receive a temporary license for the business while the company is being set up. The granting of the permanent license is contingent on the capital being paid into the company, and the proposed investment plan being executed. You can operate your business using the temporary license. Still a permanent license will allow you to change the quarterly investment activity reporting (that a temporary license holder must file) to a semi-annual filing of the report. A permanent license will also allow the company to hire foreign employees on a KITAS (work permit).
In general, the requirements to have a business license are:
Puji Gulo, Business development executive
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