If your business is looking to expand its operations into Indonesia, it is crucial to understand the licensing requirements needed to operate legally in the country. Obtaining a License to do Business in Indonesia is a complex process that involves various government agencies and regulations.
In Indonesia, there are several types of licenses that businesses may need depending on the nature of their operations. Some common types of licenses include a Business Identification Number (Nomor Induk Berusaha), a Company Registration Certificate (Tanda Daftar Perusahaan), and a Trading Business License (Izin Usaha Perdagangan).
Business License
| Business Identification Number (Nomor Induk Berusaha) | Company Registration Certificate (Tanda Daftar Perusahaan) | Trading Business License (Izin Usaha Perdagangan) |
| Trading Business License (Izin Usaha Perdagangan) is a permit issued by the government that allows businesses to legally operate in the trading sector. This license is required for businesses involved in buying and selling goods and services within the country. | A Trading Business License or Izin Usaha Perdagangan in Indonesia is a permit that allows a business to legally engage in trading activities in the country. It is required for businesses that buy and sell goods either locally or internationally. | A Trading Business License (Izin Usaha Perdagangan) in Indonesia is a permit that allows individuals or companies to engage in trading activities, such as buying and selling goods or services. The requirements to obtain a Trading Business License in Indonesia may vary depending on the location and type of trading business |
| Proof of company registration: Businesses must be registered with the relevant government authorities, such as the Ministry of Trade or the local government office. Business plan: A detailed business plan outlining the type of goods or services to be traded, target market, marketing strategy, and financial projections. Location permit: Businesses must have a valid location permit for their trading activities, which may require approval from local government authorities. Tax identification number (NPWP): Companies must have a valid tax identification number issued by the Directorate General of Taxes. Business license fee: A fee must be paid to obtain the Trading Business License, which may vary depending on the size and type of business. Compliance with regulations: Businesses must comply with all relevant laws and regulations governing trading activities in Indonesia. | Business Entity: The business must be registered as a legal entity, such as a limited liability company (PT), a partnership (CV), or a sole proprietorship (UD). Business Plan: A detailed business plan outlining the nature of the trading activities, target market, products or services to be traded, and financial projections. Location Permit: A permit from the local government authorities allowing the business to operate in a specific location or premises.Tax Identification Number (NPWP): The business must have a valid NPWP for tax reporting purposes. Company Registration: The business must be registered with the Ministry of Trade and obtain a company registration certificate (TDP). Business License: The business must also obtain a general trading business license from the Ministry of Trade or local government authorities. Other Permits: Depending on the nature of the trading activities, the business may also require additional permits or licenses from relevant government agencies, such as import/export licenses, halal certification, or other industry-specific permits. It is important to consult with a legal advisor or business consultant familiar with Indonesian regulations to ensure compliance with all requirements and procedures for obtaining a Trading Business License in Indonesia. | Business Entity Registration: The business must be registered as a legal entity, such as a PT (Limited Liability Company), CV (Partnership) or UD (Sole Proprietorship). Business Plan: A detailed business plan outlining the nature of the trading business, target market, products or services being traded, and projected financials. Location Permit: A permit from the relevant local government authorities allowing the trading business to operate at a specific location. Tax Identification Number (NPWP): The business must have a valid Tax Identification Number (NPWP) issued by the tax office. Proof of Ownership or Lease Agreement: Document proving ownership or lease agreement of the operational location. Employee Identification Number (NIK): For companies that have employees, the company must have a valid Employee Identification Number (NIK). Other specific requirements: Depending on the type of trading business, additional requirements such as environmental permits, import/export licenses, and other specific permits may be required. |
To obtain these licenses, businesses must adhere to strict guidelines and requirements set forth by Indonesian law. This may include providing financial statements, proof of capital investment, and a detailed business plan. Additionally, businesses must also comply with local zoning regulations and obtain any necessary permits before beginning operations.
Navigating the licensing process in Indonesia can be daunting, especially for foreign businesses unfamiliar with the country’s legal system. That is why it is essential to partner with a reputable consultant or legal firm with expertise in Indonesian business laws and regulations.
By obtaining the necessary licenses to do business in Indonesia, your company can operate legally and avoid any potential legal issues that may arise. This will also help build trust with customers and partners in Indonesia, leading to a successful and sustainable business operation in the country.
At Market Entry Indonesia, we have a team of experienced consultants who can guide you through the licensing process in Indonesia. Contact us today to learn how we can help your business thrive in this dynamic market.
Commercial and Operational Licenses
Indonesia’s Investment Coordinating Board, Badan Koordinasi Penanaman Modal, (BKPM) is still responsible for processing licenses for specific business sectors. You cannot get these licenses through OSS, you’ll have to apply directly to BKPM. Business sectors where this applies are:
- Electricity
- Mineral and Coal
- Oil and Gas
- Public Housing and Work
- Customs and Taxation
- Capital Investment
For these sectors, licenses can be applied for through the One Stop Service Center (Pelayanan Terpadu Satu Pintu or PTSP Pusat) at BKPM.
Frequent Asked Questions
A business license in Indonesia is a legal document that allows a company to legally operate in the country. It is issued by the relevant government authority and is necessary for businesses to conduct their operations.
To obtain a business license in Indonesia, you need to go through a process that involves registering your company with the relevant government authority, submitting the necessary documents, and meeting certain requirements, depending on the type of business you are operating.
There are different types of business licenses available in Indonesia, depending on the nature of your business. Some common types of business licenses in Indonesia include trading licenses, company establishment licenses, food and beverage licenses, and industrial licenses.
The time it takes to obtain a business license in Indonesia can vary depending on the complexity of your business and the specific requirements of the government authority. It can take anywhere from a few weeks to several months to complete the process.
The costs associated with obtaining a business license in Indonesia can vary depending on the type of business license you are applying for and the specific requirements of the government authority. It is important to budget for these costs when setting up your business in Indonesia.
No, it is illegal to operate a business in Indonesia without a valid business license. Businesses that operate without a license may face fines, penalties, or even closure by the government authorities.
If your business license in Indonesia expires, you will need to renew it to continue operating your business legally. It is important to keep track of the expiration date of your business license and renew it before it expires.