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Ease of Doing Business in

Palembang - 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 Palembang. 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 11 Yogyakarta
Dealing with Construction Permits 3 Balikpapan
Registering Property 3 Bandung
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Standardized Company
Legal form: Limited Liability Company - Perseroan Terbatas (PT)
City: Palembang
Indicator Palembang East Asia & Pacific OECD
Procedure (number) info_outline 10.0 7.0 4.8
Time (days) info_outline 34.0 23.9 8.3
Cost (% of income per capita) info_outline 19.0 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 3,020,000 (notary fee)
    3

    Obtain a certificate of company domicile from the local municipality

    This procedure is a pre-requisite for the location permit (SITU), the permanent business trading license (SIUP), and the registration certificate (TDP), which are arranged at the Licensing Office (Kantor Pelayanan Perijinan Terpadu-KPPT). According to Law No. 28 of 2009 and Mayor letter No. 1 of 2011 (enacted in January 2011), there is no longer a fee for this procedure.


    2 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) 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 a location permit (SITU) from the Licensing office (Kantor Pelayanan Perijinan Terpadu, KPPT)

    SITU is a pre-requisite for obtaining the permanent business trading license (Surat Izin Usaha Perdagangan, SIUP) and the registration certificate (Tanda Daftar Perusahaan, TDP).

    The following copies of documents should be attached to the application for SITU:
    1. Copy of ID card;
    2. Pas Photo size 3x4 2 pcs;
    3. Copy of the deed of establishment;
    4. Copy of the payment of the land and building tax;
    5. Recommendation letter from the Head of Subdistrict;
    6. Business location map.

    The list of fees for SITU for minor nuisance is:
    1. Type I 25 square meters: IDR 125,000;
    2. Type II 50 square meters: IDR 200,000;
    3. Type III 100 square meters: IDR 300,000;
    4. Type IV 200 square meters: IDR 400,000;
    5. Type n V 300 square meters: IDR 450,000;
    6. Type VI 400 square meters: IDR 500,000;
    7. Type VII >400 square meters: IDR 2,500,000.
    3 days IDR 300,000
    8

    Apply for the permanent business trading license (Surat Izin Usaha Perdagangan, SIUP) and the registration certificate (Tanda Daftar Perusahaan, TDP) at the Licensing office (Kantor Pelayanan Perijinan Terpadu, KPPT)

    The statutory time limit is 7 days, but usually SIUP and TDP can be obtained in less than 7 days.
    The following copies of documents should be attached to the application for SIUP and TDP:
    1. Application form;
    2. Copy of ID card;
    3. Original and copy of the deed of establishment;
    4. Copy of the approval from the Ministry of Law and Human Rights;
    5. Copy of a taxpayer registration number (NPWP) and SITU;
    6. The balance sheet of the company.

    According to the new Law No. 28 of 2009 and Mayor letter No. 188.342/002031, enacted in October 2010, there is no fee to aplly for SIUP or TDP.

    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.

    Although there is no official fee, an unofficial administrative fee may be charged, which is usually between 100,000 and 250,000.

    2 days 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.

    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).
    4 days No cost

    * Takes place simultaneously with previous procedure.