Owning a business license is mandatory for any business entities in Indonesia. You have to highlight that your business might be closed by the government if you do not own a business license.
Business License in Indonesia: The Regulations
According to Indonesian regulation, since 2015 every newly established foreign company in Indonesia must apply for a business license. It can be done by providing financial audit in order to be able to apply for a permanent business license or other necessary licenses, such as import license. The purpose is that the Indonesian government wants to ensure that every foreign investor will realize their investment plan instead of only submitting it to the Indonesia’s Investment Coordinating Board (BKPM).
These are the characteristics of a business license for PMA in Indonesia:
- Business license: for companies engaged in general trading, goods, or other services.
- Industrial business license: for companies engaged in the manufacturing industry outside of oil, gas, and geothermal energy
- Construction business license : for companies engaged in other industries, such as construction
What About the Procedure and Requirements?
A permanent business license will be given to a PMA Company once it meets the following requirements:
- Has been in the production phase
- Has exceeded the allotted time (3 years)
- A PMA Company may apply for a permanent license to the Head of Indonesia’s Investment Coordinating Board (BKPM) or Head of Region Investment Coordinating Board (BKPMD). Regarding the issuer, it depends on the foreign investment license, the business activities, and also the domicile of the company;
- The applicant should complete and sign the application form for a business license at BKPM or BKPMD office and attach the required documents; and
- BKPM or BKPMD officers will check all the files and the eligibility and completeness of application, and then issue the permanent license certificate.
- Permit approval for investments (copy).
- Deed of establishment and its amendments (copy).
- Company domicile, NPWP, and TDP (copy).
- Contract/rental of business premises and certificate from the owner of the building (copy).
- Copy of ID card and passport of KITAS for foreigners.
- Business Place Permit (SITU).
- List of office equipment and industrial equipment, and
- Company’s organizational structure.
How to Apply for a Business License in Indonesia
- After fulfilling all documentation requirements, the processing time for a business license application takes 14 working days.
- A business license is generally valid for 30 years.
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