Indonesia

Starting a Business in

Batam - 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
1 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)
2 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 3,800,000 (notary fee)
3 Obtain a certificate of company domicile from the Village Office

The domicile letter is required as pre requisite for other procedures. There is no official fee for this procedure but in practice, the applicant usually pays IDR 300,000-IDR 600,000. The following copies of documents should be attached:
1. Copy of the deed establishment;
2. Copy of the ID card of the director;
3. Pass photo size 3x4 2pcs;
4. A recommendation letter from the Head of neighborhood;
5. Map of business location;
6. The proof of the leasing the business premises.

As of January 2011, based on Mayor instructions, the Head of the Subdistrict is prohibited to issue the Domicile Letter but in practice this procedure is still required by the notaries.

7 days No cost
4 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
5 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)
6 Obtain a taxpayer registration number (NPWP) from the local Tax Office

This procedure is required as a pre-requisite for SIUP. NPWP can be applied for online at: www.pajak.go.id. But, in practice, most applicants do not use the online system. Even if the service is available online, the applicant still has to visit the Tax Office in person to submit the original documents.

The following copies of documents should be attached:
1. Copy of deed of establishment;
2. Copy of ID card;
3. Copy of domicile letter from the Head of Village;
4. Receipt of payment of Land and Building Tax (PBB);
5. Proof of land ownership or the leases premises.

Time to complete this procedure is 2-7 days and there is no official cost. In practice, the applicant usually pays IDR 50,000-200,000.

In Batam, based on the circular letter of the General Director of Tax No. 37 of 2009, NPPKP is no longer needed.

3 days No cost
7 Apply for the permanent business trading license (Surat Izin Usaha Perdagangan, SIUP) and registration certificate (Tanda Daftar Perusahaan-TDP) at the One Stop Shop

Based on Mayor Decree No. 8 of 2001 and the standard procedure (SOP) in the integrated licensing services (http://www.bpbatam.go.id/ini/ aboutBida/pemko2.jsp), the requirements to obtain SIUP are:
1. Application form, including the phone number and the stamp of the company;
2. Copy of deed establishment;
3. Original and copy of the company approval from the Ministry of Law and Human Rights;
4. Copy of ID card;
5. Copy of NPWP PT;
6. Copy of the domicile letter from the Head of Village;
7. Proof of land ownership or lease of premises;
8. Map of business location;
9. The original balance sheet of the company;
10. Pass photo size 3x4 4 pcs.

The official time to complete this procedure is 3 days and it's implement also in practice.

3 days IDR 500,000 (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. The applicant returns to the office to pick up the official copy of the registration.

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

3 days 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).


7 days No cost
* Takes place simultaneously with another procedure.

Data snapshots