Procedure to Establish A Company in Indonesia

The Indonesian government has made many improvements to ease the process of establishing a company. Establish company in Indonesia has become a lot easier and straightforward. This enhancement gives a positive impact on the economic growth rate and also provides a new job for the people. In 2017, there is no minimum capital to establish a company in Indonesia. It just takes about 24,9 days to obtain Deed of Incorporation, Tax ID Number, Business License, Certificate of Company Registration, and also Mandatory Report on Employment (WLP).

In 2016, the process of setting up a company in Indonesia needs about 47,8 days. This increase is because of the new rules and policies issued by the central government. Some of the regulations are directly related to the company’s establishment process, and some others are to simplify the existing licensing process. To establish a company in Indonesia, here are the newest regulations related to the process and requirements of Company establishment.

New Regulations to Establish Company in Indonesia

  1. Code of Business and Field of Business

The Government has made some adjustment in the code of Standard Classification of Indonesian Business Field (KBLI) which is arranged through Regulation of the Head of Statistics Central Bureau to anticipate the growth of information technology. A few of KBLI code in Perka 19/17 which previously not available in Perka 95/2015 is about web portals and digital platforms with commercial purposes (code 63120) and web portals and digital platforms without commercial purposes (6312). It is essential for you to define the right business field and determine the most appropriate code in KBLI if you want to establish a company in Indonesia. The code that you choose will specify the required permissions for your business.

  1. Business Domicile and Zonation
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It is essential for you to know the terms of Business Domicile in the region where you want to establish a company in Indonesia. Sometimes, there are few differences about Business Domicile Terms in each area. Few areas in Indonesia allow house to be used as a business place, but there are few others which aren’t. To establish a company in Indonesia, the Business Domicile must be in your business zonation. To ensure about the zonation from the place that will be your Business Domicile, you can go to the village office about the information.

  1. Occupancy Worthiness Permit (UUG/HO)

The Occupancy of Worthiness Permit or Hinder Ordonantie (HO) is one of the legacies of the Dutch colonial government that was enacted since 1926. This license is required to establish several types of business especially those that related to particular permits such as establishing a travel agency, restaurant, or catering company. However, the regulations governing the Occupancy Worthiness Permit (HO) have been revoked by Minister of Home Affairs. Due to the enactment of the new rule, this Occupancy of Worthiness is no longer required to obtain a business license when you establish a company in Indonesia.

  1. Employment Social Security (BPJS Ketenagakerjaan) and Health Social Security (BPJS Kesehatan)
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Social Security Administrator (BPJS) is the government program with the purpose to give social protections and prosperity for the laborers and workers. The rules concerning BPJS are mandated by Law no. 24 Years 2011 about Social Security Administrator. To establish a company in Indonesia, you must follow article 15 through Article 17 of the law. You as the employer have to register yourself and your workers gradually to the BPJS following the social security program if you want to establish a company in Indonesia. The employer (business entity or individual) will become the subject of administrative sanctions if they don’t register.

Many rules have to be followed to establish a company in Indonesia. Hopefully, this article can be useful for you who wants to establish a company in Indonesia by giving you relevant information.

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