Starting a Business in

Bandung - Indonesia

Below is a detailed summary of the bureaucratic and legal hurdles an entrepreneur must overcome in order to incorporate and register a new firm, along with their associated time and set-up costs. 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.

The information appearing on this page was collected as part of the Doing Business subnational project in Indonesia. Download this Doing Business report or explore other cities and topics.

  • No. Procedure Time to Complete Associated Costs

    Arrange for a notary; obtain the standard form of the company deed; obtain clearance for the company name electronically from 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 Law 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 public notary (the new computerized system for nontax state revenue payments may be accessed only by a public notary). Upon payment and verification, the applicant receives an online notification (via email) with the cleared company name. The reserved name will be blocked for 60 days.

    Based on the Government Regulation Number 38 of 2009 (enacted on May 28, 2009 and entered into force on June 3, 2009) regarding the Non Tax State Revenue for the Ministry of Law and Human Rights, the fee for this procedure is IDR 200,000.

    4 days IDR 200,000 (name clearance and reservation)

    Notarize company documents before a notary public

    Once the notary gets the company name approval from the Ministry of Law and Human Rights, the founders can sign the deed of establishment. Standard articles of association are available at the notary office.
    The notary fees associated with this procedure cover the following services: name check, deed drafting and approval, and payment of non tax state revenue (PNBP) fees. Commonly, local notary associations set the scale of notary fees. In practice, the fee depends on the agreement between notary and client.
    The costs for accessing the Electronic Administration System of Legal Status (SABH), name checking, and PNBP are counted separately.

    1 day IDR 4,020,000 (notary fee)

    Obtain a certificate of company domicile from the Village Office

    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. The application form for domicile certificate should be completed with the number and date of the deed of establishment and the name of the notary, the type of business, and a declaration mentioning the company has informed its neighbors. A copy of the signed deed of establishment should also be attached.

    There is no official fee to obtain this certificate in Bandung. Instead, a “voluntary social contribution” for the development of the community can be made.

    2 days No cost

    Pay the State Treasury for the non-tax state revenue (PNBP) fees for legal services at a bank

    This payment is for name clearances and company approval.

    Because the new computerized system for non-tax state revenue payments (PNBP)—which has been implemented by the Ministry of Law and Human Rights—may be accessed only by a notary public, payment for registering or establishing a company is normally done through a notary.

    The requirement to pay the non-tax state revenue (PNBP) fee for legal services in relation to the establishment of a small company (Perseroan Terbatas- PT) is based on Government Regulation No. 38 of 2009 concerning types and tariffs on non-tax state revenues replacing the previous regulation which is regulation No. 19 of 2007.

    1 day No cost

    Apply to the Ministry of Law and Human Rights for approval of the deed of establishment

    Based on Articles 9, 10, 29 and 30 of the Indonesian Company Law No. 40/ 2007, the public notary preparing the company deed of establishment must electronically file the required documents with the Ministry of Law and Human Rights. The process will take place as follows:
    1. The application should be filled no later than 60 days since the date of the deed;
    2. In 30 days since the notice of “no objection” from the Ministry of Law and Human Rights, the original application and supporting documents should be submitted;
    3. Seven days after the fulfillment of above requirements, the Ministry of Law and Human Rights will issue the legalization of the establishment of the company;
    4. The company data (name, location, object and purpose, capital) will be inserted in the Company Registry;
    5. The Ministry of Law and Human Rights will announce the establishment of the company in the Supplement State Gazette (TBNRI) within 14 days of the Ministry's Approval Letter.

    By virtue of Government Regulation 38/ 2009 (enacted on May 28, 2009 and entered into force on June 3, 2009) regarding the Non Tax State Revenue for the Ministry of Law and Human Rights, a new schedule of official fees was enforced for the establishment of a domestic limited liability company (PT).

    Delays depend on the workload of the Ministry and on the approved courier service used by the Ministry to deliver its approval to the notary. The process usually takes 7 days for processing and approximately 7 days for courier service. There is improvement in quality of courier service, by using Pos or TIKI express services now the process to deliver the documents is faster within 4-7 days.

    14 days IDR 1,580,000 (IDR 1,000,000 for validation of company as legal entity + IDR 30,000 for publication in the State Gazette, BNRI + IDR 550,000 for publication in the Supplement to the State Gazette, TBNRI)

    Obtain a taxpayer registration number (NPWP) and a Value Added Tax (VAT) collector number (NPPKP) from the local Tax Office

    Maximum one month from the start of business operations, the company must register with the Tax Office. The company must also obtain a VAT collector number (NPPKP) if it anticipates annual revenue of more than IDR 600 million from the sales of goods and services. The company domicile certificate, articles of association, and identity cards of the directors must be submitted to obtain the tax numbers. NPWP and NPPKP can be arranged simultaneously in one package. The applicant submits the required documents to the Tax Office and gets the receipt of application. The Tax Officer will inform the applicant when the NPWP and NPPKP cards are ready for pick up.

    The NPWP application can also be arranged on-line but the applicant still needs to provide hard copies of documents and visit the Tax Office to pick up the NPWP Card. Most applicants visit the Tax Office in person.

    3 days No cost

    Apply for the nuisance permit (Hinder Ordinantie- HO/SITU), the permanent business trading license (Surat Izin Usaha Perdagangan- SIUP), and the registration certificate (Tanda Daftar Perusahaan- TDP) at the Bandung One Stop Shop (BPPT)

    The applications for HO/SITU, SIUP and TDP can be submitted at the same time, at the same window, with the same Officer at Bandung One Stop Shop (BPPT). The detail process will take place as follows:
    1. The applicant submits the complete documents to BPPT and gets the registration number;
    2. BPPT will verify the documents;
    3. A technical team will conduct the field survey to check the business location and the type of business (the applicant doesn’t need to be present);
    4. Based on the technical team report, the application can be approved or not;
    5. If the application has been approved, BPPT will issue the license.

    HO will be processed first because HO is prerequisite for SIUP. By the time HO has been approved, SIUP & TDP will start to be processed. The process is usually completed within 5 days.

    The following documents should be attached to apply for HO, SIUP & TDP:
    1. Application form;
    2. Copy of the deed establishment legalized by the ministry of Law and Human Rights (Kemenhukham);
    3. An attestation of location and address of the company’s offices;
    4. Copy of NPWP;
    5. Copy of ID card;
    7. Agreement/aproval letter with the land/building owner and/or leasing agreement between land/building owner and the applicant;
    9. Domicile letter (prerequisite for HO);
    10. Letter of no objection from the Head of neighborhood;
    11. Letter of ability to meet the environmental preservation (prerequisite for HO);
    12. Pass photo 4x6 2 pcs.

    According to Regulation of Ministry of Trade No. 46/2009, and Mayor regulation of Bandung, SIUP is free of charge. Based on local regulation No. 12/2002, fee for TDP is IDR 420,000. Based on local regulation No. 27 of 2002 concerning nuisance permit (HO), the formula cost to calculate fee for HO is:
    = Business area x location index x nuisance index x tariff
    = 100 m2 x 3 (alteri primer) x 2 x 510 = IDR 306,000

    Although the application process can be done electronically (www.boss.or.id), the applicant still has to visit the office to submit the original documents.

    5 days IDR 726,000 (IDR 306,000 for SITU/HO + IDR 420,000 for TDP)
    * 8

    Register with the Ministry of Manpower at the local Manpower Office

    According to Law No. 13/2003, 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 compulsory report with the local office of the Ministry of Manpower. The applicant gets a receipt of document submission. The Manpower office conducts a verification process and issues an official copy of the registration to the applicant. For a company with less than 50 employees, the verification process can be done on the spot.

    Although there is no official fee, an unofficial administrative fee may be charged, which usually starts at IDR 150,000.

    1 day No cost
    * 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 to apply for the Workers Social Security Program (Jamsostek). This social security program covers occupational accidents, death, old age, and health security. It is arranged after the company starts to recruit workers.

    Arranging for Jamsostek is the same for all Indonesian locations:
    1. Fill-in the form, which can be downloaded from the website jamsostek.go.id or obtained from Jamsostek Branch Offices;
    2. Visit the Jamsostek Office to submit the filled-in form;
    3. Jamsostek official conducts data input to Jamsostek data base;
    4. The applicant receives the company membership certificate.

    From submitting the application form until obtaining the membership certificate it usually takes between 1 and 3 days. In practice, if the company doesn't pick up the certificate, the local Jamsostek Office will mail it to the applicant no later than 7 days from the date of the application. In 30 days, the company should pay the first insurance premium. Having received the first payment, the Jamsostek Office will issue membership certificates for each employee.

    A company is not obliged to enroll its employees in the Jamsostek social security program if it offers an independent social security program to its employees, with comparable or better benefits 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).

    1 day No cost

    * Takes place simultaneously with previous procedure.