Starting a Business in

Pekanbaru - 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 4,520,000 (notary fee)

    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.

    Although there is no official fee, an unofficial administrative fee of IDR 50,000 might apply.

    2 days No cost

    Obtain a local taxpayer registration number (NPWPD) and pay local/fiscal charges at the Local Revenue Office

    The applicant brings a proof of payment of the land and building taxes (PBB) for the last 2 years and pays the billboard tax. This procedure is governed by a local regulation which mandates that every company must have a billboard complete with the company address. The documents needed to apply are:
    1. Copy of ID card;
    2. The deed of company establishment;
    3. Proof of payment of land and building tax;
    4. Copy of lease of the building.

    1 day IDR 77,000

    Obtain a location permit (SITU) from the Integrated Service Agency (BPT)

    As per Local Regulation 7/2000 concerning location permit (Surat Izin Tempat Usaha-SITU), and according to Instruction of Mayor No. 503 of 2002, the applicant should submit, along with the official application form, the following documents:
    1. Location map;
    2. Land Certificate;
    3. Agreement/approval letter of the land/building owner and/or leasing agreement between land/building owner and the applicant (if the land/building doesn't belong to the applicant);
    4. Proof of payment of tax on land and building (if the company leases the premises, proof of payment by the owner would be required);
    5. Letter issued by the local Fire Department office;
    6. Commercial tax on billboards (local fiscal charges), which is mandatory for all companies;
    7. Copy of deed of company establishment;
    8. Copy of ID card;
    9. Pass photo size 3x4 2 pcs.

    As per new regulation from May 2009, the statutory time limit to obtain SITU is 5 days, but practically it can be done within 2-3 days. An inspection of the premises, following the application, is mandatory for all new buildings. The entrepreneur does not have to be present during the inspection since this is only for address verification. The inspection done as randomly, especially for the company which is not includes the complete address.

    The payment for SITU is done at a bank counter located at the Integrated Service Agency. The formula to calculate the cost is specified in article 11 (2), point b, as follows: (business area) x (tariff) x (location index).
    1. Business area:
    a. For a business area of 1 to 100 square meters, the official fee is IDR 7,500;
    b. For a business area of 101to 200 square meters, the official fee is IDR 10,000;
    c. For a business area above 200 square meters, the official fee is IDR 20,000;
    d. Any additional square meter costs IDR 200.
    2. Location index:
    a. For a road width of 6 meters, the location index is 1;
    b. For a road width of 6 to 12 meters, the location index is 1.5;
    c. For a road width above 12 meters, the location index is 2.

    For a company with a business space of 100 square meters, the cost for SITU is 100 x IDR 7,500 x 1 = IDR 750,000 .

    2 days IDR 750,000 (see comments)

    Apply for the permanent business trading license (Surat Izin Usaha Perdagangan, SIUP) and the registration certificate (Tanda Daftar Perusahaan, TDP) at the Integrated Service Agency (BPT)

    SIUP and TDP can be arranged as a package, at the same time, with the same Officer at the Integrated Service Agency (BPT). The applicant submits two different application forms, along with the required documentation, gets a confirmation receipt, and pays the official user charges. After verification, the licenses are issued. Payment for SIUP and TDP is done at the bank counter located inside the BPT office.

    1. 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:
    a. The articles of association;
    b. An attestation of location and address of the company’s offices (location permit- SITU);
    c. The tax registration number;
    d. The identity card of the company president or director;
    e. The ministerial decree on the legalization of the business entity.

    According to the Law No. 28 of 2009, since January 2011, in Pekanbaru, SIUP & TDP are issued free of charge. This new policy was determined during a coordinating meeting of all related agencies in Pekanbaru. There is no local regulation governing this new policy, the annulment of the previous regulation is still under way.

    4 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 50,000 and IDR 500,000. The fee can depend on the number of pages in the Working Contract (KK) and in the Standard of Procedures (SOP) of the company.

    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. 76 /2007).

    1 day No cost

    * Takes place simultaneously with previous procedure.