Indonesia

Starting a Business in

Indonesia

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Indonesia. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 189 economies. The most recent round of data collection was completed in June 2013.

Compare Indonesia to 188 other economies.

  • Standardized Company

  • Legal Form: Perseroan Terbatas (PT)
  • Paid in Minimum Capital Requirement: IDR 12,500,000
  • City: Jakarta
No. Procedure Time to Complete Associated Costs
1 Obtain the standard form of the company deed ; arrange for a notary electronically; obtain clearance for the Indonesian company's name at the Ministry of Law and Human Rights.

The uniqueness of the company name must be checked to ensure that it has not been used by another Indonesian company, to avoid a rejection by the Ministry of Justice and Human Rights of the company's deed of establishment and articles of association. Because the process must be done through a computerized processing system, the reservation and clearance must be done by a notary public (because the new computerized system for nontax state revenue payments may be accessed only by a notary public). The reserved name will be blocked for 60 days. If the founding shareholders are confident that the same name has not been used by another Indonesian company, this procedure is not necessary.

Under Article 16 of Law No. 40 of 2007 on Limited Liability Companies, company must not use a name which:
a. has been lawfully used by another company or is similar to the name of another company;
b. contravenes public order and/or decency;
c. is identical or similar to the name of a state agency, government agency, or international agency, except with their approval;
d. does not conform to the purposes and objectives and business activities of the company, or only designates the purposes and objectives of the company without having its own name;
e. consists of numbers or a set of figures, a letter or a set of letters that do not form any words; or
f. means a Company, a legal entity, or a civil enterprise (persekutuan perdata).
The Ministry of Law and Human Rights may reject a name application reservation if the requested name is, among others, the same or resembles similarities to name of other companies.
Government Regulation No. 26 of 1998 on Use of Names of Limited Liability Companies also provides that an application to use a name that is the same or similar to a well known trademark shall be rejected unless approval is obtained from the holder of the trademark

4 days included in procedure 4
2 Notarize company documents before a notary public

Law No. 30 of 2004 concerning Notaries (Article 36 paragraph 3) stipulates that the maximum notary fee for objects of deed with an economical value of above IDR 100,000,000 up to IDR 1,000,000,000 is 1.5% of the total value of the object of the deed.
4 days IDR 4,464,464
3 Obtain the Building Management Domicile Certificate

For companies that locate in an office building, business founders need to get the Building Management Domicile Certificate from the Building Management Office before applying for the Certificate of Company Domicile.
1 day no charge
4 Apply for the Certificate of Company Domicile

All Indonesian limited liability companies must have a certificate of company domicile. This certificate is issued by the head of the village (the Lurah) where the company is located or by the building management if office space is leased. There is no official fee for this certificate. This certificate is required for several documents (SIUP, TDP, etc.)
2 days no charge
5 Pay the State Treasury for the non-tax state revenue (PNBP) fees for legal services at a bank

Because the new computerized system for nontax state revenue payments (PNBP)—which has been implemented by the Ministry of Justice and Human Rights—may be accessed only by a notary public, payment for registering or establishing a company is normally easier through the notary.
The requirement to pay the non-tax state revenue (PNBP) fee for legal services in relation to the establishment of a PT is obtained from the information stated in the website of the Legal Entity Administration System (known as SABH (Sistem Administrasi Badan Hukum) (www.sisminbakum.go.id), where it is informed that there is a PBNP fee to be paid for the purpose of company establishment in the amount of IDR 200,000 and to be paid through the Notary.
1 day IDR 200,000 (name check) + IDR 1,580,000 non-tax state revenue (PNBP) fees for legal services
6 Apply to the Ministry of Law and Human Rights for approval of the deed of establishment

Based on Article 9, 10, 29 and 30 Indonesian Company Law No. 40 year 2007, the application for approval of Ministry of Law and Human Right (the ""Ministry of Law"") on establishment of company should be able to file electronically by attaching with the certificate of bank account, copy of the relevant bank transmittal advice, NPWP (Tax Registration Number), Certificate of Company Domicile. The process will be taken as follows:
•The application should be filled at the latest 60 days since the date of establishment deed;
• Since the application has already fulfilled, the Ministry of Law directly electronically stated no objection on said application. However, if the application is not fulfilled, the Ministry of Law will directly electronically state his objection on said application;
• in 30 days since the date of no objection by Ministry of Law, the applicant should submit the original application and supporting documents;
• 14 days after fulfillment of above requirements, Ministry of Law will issue the legalization on the establishment of the company;
• Data of company which its establishment has been approved by Ministry of Law i.e. name, domicile, object and purpose, period, Capital Company will be inserted into Company Registry.
• The Ministry of Law will announce the establishment of company in Supplement State Gazette (TBNRI) within 14 days of the Ministry's Approval Letter;
The cost of this procedure is based on the Schedule to the Government Regulation Number 38 of 2009 concerning Types and Tariffs on Non-Tax State Revenues Applied for in the Department of Law and Human Rights which comes into effect on 28 May 2009.


7 days included in procedure 4
7 Apply at the One Stop Service for the permanent business trading license (Surat Izin Usaha Perdagangan, SIUP) and the company registration certificate (Tanda Daftar Perusahaan/TDP)

The Surat Izin Usaha Perdagangan (SIUP) constitutes the business license for a non-facility company engaging in trading business. The SIUP contains details about the company activities and the person in charge of the company (normally the President Director). The Ministry of Industry and Trade, which issues the SIUP for a non-facility company, may require a letter of good conduct from the Indonesian police in support of the person in charge of the company. Normally, the following copy of documents should be attached for the application for a SIUP:
• The articles of association (copy).
• An attestation of location and address of the company’s offices.
• Identity card of the company President Director.
• Notary deeds
After reviewing the application, the Municipality passes it to the technical agency at the regional office for cooperatives for further review• it takes 2 days to get the signature of the head of that office as the authority is not delegated. Once the application is back, the SUIP is provided.

SIUP and TDP for a limited liability company can be obtained at the One Stop Shop Service, through the Standard Operating Procedure.
Based on Regulation of Ministry of Trading No. 36/M-Dag/PER/9/2007 on Issuing Business Trading License (SIUP), the SIUP will be issued in 3 days since the receiving of completed documents but in practice it takes 3-7 days.

The Trade Minister Regulation No. 36/M-DAG/PER/9/2007 as amended by the Trade Minister Regulation No. 46/M-DAG/PER/9/2009 classified the SIUP based on the enterprises’ net assets as follows:

“Article 3
(1) Small Scale SIUP must be held by businesses engaging in trade having a net asset of more than Rp. 50.000.000,- (fifty million Rupiah) up to no more than Rp. 500.000.000,- (five hundred million Rupiah) not including land and building on which the business operates;
(2) Medium Scale SIUP must be held by businesses engaging in trade having a net asset of more than Rp. 500.000.000,- (five hundred million Rupiah) up to no more than Rp. 10.000.000.000,- (ten billion Rupiah) not including land and building on which the business operates;
(3) Large Scale SIUP must be held by businesses engaging in trade having a net asset of more than Rp. 10.000.000.000,- (ten billion Rupiah) not including land and building on which the business operates.”

15 days no charge
8 Register with the Ministry of Manpower

According to Law No. 7/1981, companies with more than 10 workers or a monthly payroll of IDR 1 million must register with the Ministry of Manpower. This procedure can be completed concurrently with other post-registration procedures by filing the manpower compulsory report and company regulations with the Ministry of Manpower. Although there is no official fee, there may an unofficial administrative fee that depends on negotiation and usually starts at IDR 100,000.
14 days no charge
* 9 Apply for the Workers Social Security Program (Jamsostek Program)

According to legal provisions on workers’ social security (Law No. 3/1992), it is mandatory for every company or individual employing 10 workers or more or generating a monthly payroll of at least IDR 1 million a month to apply for the Workers Social Security Program (Jamsostek), operated by the executing agency. This social security program covers occupational accident security, death security, old age security, and health maintenance.

A company or an individual is not obligated to enroll its employees in the social security program if it offers an independent employee social security program with benefits comparable or better than those offered by the Package of Basic Health Maintenance Security (according to Government Regulation No. 14/1993, as amended by Government Regulation No. 28 /2002).
7 days (simultaneous with previous procedure) no charge
* 10 Obtain a taxpayer registration number (NPWP) and a VAT collector number (NPPKP)

Regulation of Directorate General of Taxation No. 44/PJ/2008 which comes into effect on 20 October 2008 concerning Procedures of Application of Taxpayer Registration and/or Taxable Entrepreneur Number, Amendment of Data and Transfer of Taxpayer and/or Taxable Entrepreneur aimed to enhance the service to the taxpayer. The regulation states that within 1 year as of the issuance of NPWP, the relevant Tax Office will conduct field confirmation regarding the correct data/identity of the taxpayer a. The person/entity can apply for NPWP in the relevant tax office where the company is located or can apply it online through http://www.pajak.go.id, choose e-registration to make account as a taxpayer and then follow the procedures therein, by filling the form and attaching copies of deed of establishment and its amendment if any, identity card/KTP of one of active Director, statement letter regarding confirmation on place of business from one of the active Director (form is provided), POA and identity card/KTP of the authorized. The NPWP card and Registered Statement Letter is obtained within 1 calendar day upon the completeness of the required document without and fee, charge and/or retribution.

1 day (simultaneous with previous procedure) no charge
* Takes place simultaneously with another procedure.

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