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Ease of Doing Business in

Makassar - Indonesia

Region East Asia & Pacific
Income Category Lower middle income
Population 257,563,815
GNI Per Capita (US$) 3,440.00

This page summarizes Subnational Doing Business in Indonesia 2012 data for Makassar. The first table shows its rank among 20 cities/regions in Indonesia. The rest of the tables summarize the key indicators for each topic and benchmark against regional and high-income economy (OECD) averages.

Topic Rankings Rank among 20 cities in Indonesia Top city in Indonesia
Overall n.a. n.a.
Starting a Business 17 Yogyakarta
Dealing with Construction Permits 11 Balikpapan
Registering Property 9 Bandung
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Standardized Company
Legal form: Limited Liability Company - Perseroan Terbatas (PT)
City: Makassar
Indicator Makassar East Asia & Pacific OECD
Procedure (number) info_outline 10.0 7.0 4.8
Time (days) info_outline 35.0 23.9 8.3
Cost (% of income per capita) info_outline 22.0 19.0 3.1
Paid-in min. capital (% of income per capita) info_outline 46.6 12.3 9.2
  • 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 4,020,000 (notary fee)
    3

    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. A copy of the signed deed of establishment should also be attached.
    Although there is no official fee for this certificate, an unofficial administrative fee may be charged. The fee varies from IDR 100,000 to IDR 500,000, depending on the Village Office.
    1 day 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) 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
    7

    Obtain the nuisance permit (Hinder Ordinantie- HO) at the Licensing Office (Kantor Pelayanan Administrasi Perijinan-KPAP)

    The applicant is required to get a statement of non objection from the neighbors. An inspector will visit the company location the same day or one day after the application is made. The entrepreneur doesn’t have to be present to receive the inspection. The cost of the permit depends on the size of the business space and the location. It's stipulated in Local Regulation 6/2004 regarding HO levy. The cost formula is: size of location/office space x road index x nuisance index x IDR 500/square meter.

    The following copies of documents should be attached for the application for HO/SITU:
    1. A letter of information from the Head of Village (Domicile Letter from the Head of Village);
    2. Copy of ID card;
    3. Recommendation letter from related technical agency;
    4. Copy of the deed of establishment;
    5. Copy of Land and Building Tax;
    6. Copy of certificate of business location;
    7. Copy of Construction permit and Map of the Building;
    8. A statement letter from the applicant stating that the business does not produce a negative impact to the surrounding area;
    9. Pass Photo size 3 x 4 cm 4 pcs.

    The applicant will bring the documents to the Licensing office (Kantor Pelayanan Administrasi Perizinan-KPAP) and KPAP will verify the documents. The documents will be processed further in the Local Industry and Trade agency. The process takes place as follows:
    1. The applicant submits the application form to the Licensing agency (Kantor Pelayanan Administrasi Perizinan-KPAP);
    2. KPAP will verify the documents within 1 day;
    3. If the documents are complete, KPAP will bring the complete documents on the same day to the local Ministry of Industry and Trade office for further processing;
    4. The technical team from the Local Industry and Trade agency (Disperindag) will do the field survey, and the result will be written in the minutes of field observation (Berita Acara Peninjauan Lapangan, BAPL). This process takes usually 4-5 days;
    5. The field minutes (BAPL) will determine whether the application will be approved or not. If the application is approved, Disperindag will issue a recommendation letter containing the amount of fees to be paid;
    6. KPAP will inform the applicant by mail or telephone to pay the levy at the Bank which is located in the same area with KPAP;
    7. After the payment process, Disperindag will bring the recommendation letter to KPAP as a recommendation to issue the license;
    8. The applicant can pick up the license at KPAP on the same day with the payment process.









    6 days IDR 100,000 (100 square meters x 2 (road index) x 1 (nuisance index) x IDR 500/square meter)
    8

    Obtain the permanent business trading license (Surat Izin Usaha Perdagangan-SIUP) and the registration certificate (Tanda Daftar Perusahaan, TDP) at the Licensing office (Kantor Pelayanan Administrasi Perijinan-KPAP)

    As per Mayor Regulation 14/2005, the applications for the 2 licenses (SIUP and TDP) can be submitted at the same time. The applicant submits the documents to the licensing office (Kantor Pelayanan Administrasi Perizinan-KPAP), and then KPAP will do the verification of the documents. After the verification is done by KPAP (1 day), KPAP will bring the documents to the Local Industry and Trade Agency to be processed (3-4 days). After processing and internal communication between KPAP and the Local Industry and Trade Agency, the applicant can return to KPAP and obtain the licenses.

    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. The following copies of documents should be attached to the application for SIUP/TDP:
    1. Copy of the deed of establishment;
    2. Copy of ID card;
    3. Copy of the taxpayer registration number (NPWP);
    4. Copy of SITU/HO;
    5. Copy of balance sheet of the company;
    6. Duty stamp IDR 6,000 4 pcs;
    7. Pas Photo size 3x4 3 pcs;

    According to the National Law No.28 of 2009, implemented in January 2011 in Makassar, SIUP & TDP are free of charge.
    5 days No cost
    * 9

    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. 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 is usually between IDR 100,000 and IDR 200,000.
    1 day No cost
    * 10

    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).

    3 days No cost

    * Takes place simultaneously with previous procedure.