A business license in Indonesia is required for all companies registered in this country to lawfully engage in their respective activities. Entrepreneurs who open a company in Indonesia will require this license (and others, according to their activities), as part of the incorporation steps.
Our team specializing in company formation in Indonesia can help investors apply for a business license or a trade license in Indonesia, in addition to meeting the ongoing requirements for corporations.
Foreign investments in Indonesia are subject to certain clear regulations and minimum investment amount requirements. Discussing with our team is advisable for all businesses that need to obtain a business permit in Indonesia.
Table of Contents
The business license in Indonesia
When applying for a business license in Indonesia, a distinction should be made between the general business license (issued upon incorporation, as an Indonesian registration certificate), and business licenses issued by authorities that regulate selected business fields.
In this article, our experts in company formation in Indonesia refer to the licenses that are granted for companies that activate in certain business fields, among which:
- agriculture and forestry;
- communication;
- tourism;
- food manufacturing and selling;
- educational services.
A trade license in Indonesia is also part of this category of licenses issued by authorities. Companies that trade within Indonesia apply for an SNI certificate with the Ministry of Trade.
This certificate, which can essentially be seen as a license to trade products within the country, is issued after the company is reviewed. The following are taken into account:
- The company’s suitability for the intended activities: the authorities identify the specific products that will be distributed within Indonesia;
- Product evaluation: the company’s products are evaluated to ensure compliance with the Indonesian quality standards;
- Trademark: the exclusive ownership of the brand or product name is verified to ensure that the products are protected from unauthorized use;
- Inspection: in addition to reviewing the products the authorities will also perform an on-site verification at the factory or manufacturing unit. By doing so, they will confirm that the product complies with the quality standards.
Companies submit a complete set of documents as part of the licensing process. For the SNI certificate used for trading and distributing products in Indonesia, they will provide the application form, the registration certificate, other qualifications, documents concerning the company owners, etc.
If you want to apply for a trade license in Indonesia our team can help you obtain the the SNI certificate.
Other licenses and permits for companies
Companies that operate in certain business sectors will need additional licenses and special permits or will need to comply with industry regulations. We advise foreign investors to reach out to our team for complete information about the alcohol license in Indonesia, as well as other special licenses.
In addition to the ones for manufacturing and the sale of alcohol, other commercial licenses are issued by corresponding authorities for the following activities: the extraction of oil, gas, minerals and coal, the production and/or distribution of electricity, and other types of activities.
Investors who set up a company in Indonesia that will offer financial services will need to obtain a license from the Financial Services Authority in most cases. Our company formation experts can give you more details about this business permit in Indonesia.
If you want to open a company in Indonesia that activates in the trade sector or will be engaged in distributing products within the country we advise you to get in touch with our team for complete information on the important conditions applicable to trade companies.
Conditions for a company that applies for a business license in Indonesia
Before the company owner can apply for a business or trade license, the legal entity needs to be duly registered with the local authorities.
Company incorporation in Indonesia for a foreign-owned company is subject to several important requirements concerning licensing and capital. We list some of these below:
- A foreign-owned company needs a minimum capital between 1 billion and 10 billion Rupiah; the latter is more common for approval;
- An amount of at least 2.5 billion Rupiah is needed as paid-in capital;
- A permanent business license in Indonesia is mandatory, along with other licenses for import/exports, and other types of activities.
All foreign-owned companies in Indonesia will need to meet the minimum capital requirements and the conditions for submitting a business plan that will be approved by the Investment Board.
A business license in Indonesia is needed for locally registered companies as well as foreign-owned ones. As previously mentioned, the license is applied for after the registration process is complete, due to the fact that the company’s registration certificate is needed as part of the documents submitted for licensing.
If you need assistance with obtaining a permanent business license, as well as the general process for company registration in Indonesia, our team can give you more details about our services.
Company compliance in Indonesia
Business owners can also reach out to our accountants in Indonesia for complete information about taxation and filing requirements, in addition to those related to licensing. We remind investors of the most important taxes for companies:
- 22% corporate income tax rate;
- 11% standard value-added tax, with a 0% rate for some types of goods and services;
- 20% dividend withholding tax in the case of dividend payments by an Indonesian company to a nonresident (unless reduced by a tax treaty).
If you are interested in company creation, you may also require information on the residence permits that allow you to remain in the country for business purposes. Our immigration lawyers in Indonesia can give you detailed information about these requirements.
Contact our team for more details about the business license in Indonesia, as well as other requirements and regulations for local and foreign companies.