Establishing a company in Indonesia is a significant milestone for any entrepreneur or foreign investor. However, completing the company registration process is just the beginning. To operate legally and smoothly, companies must also obtain a range of business licenses and permits specific to their industry and operational scope. This article will guide you through the essential licenses you need after registering a company in Indonesia.
Understanding Business Licensing in Indonesia
Indonesia has made substantial improvements in streamlining its licensing procedures through the Online Single Submission (OSS) system. Introduced by the Indonesian government, OSS aims to simplify the licensing process for businesses by creating a centralized platform. Despite these improvements, businesses must still understand and comply with licensing requirements that vary based on industry, location, and company size.
Key Licenses Required After Company Registration
1. Business Identification Number (NIB)
The Business Identification Number or Nomor Induk Berusaha (NIB) is one of the first documents you receive post-registration through the OSS system. It serves as a unique identity for your business and replaces several previous documents, such as Import Identification Number (API), and Customs Access Rights (HAKC). NIB is essential for legal business operations in Indonesia.
2. Business License (Izin Usaha)
After obtaining the NIB, your company must apply for a specific business license depending on the sector. The type of license you need is determined by the Indonesian Standard Business Classification Code (KBLI). For example:
- Industrial Business License (IUI) for manufacturing companies
- Tourism Business License for businesses in the tourism sector
These licenses are now part of the OSS system and are typically issued electronically.
3. Location Permit (Izin Lokasi)
The Location Permit confirms that the company’s business premises align with local zoning and spatial planning regulations. Although this has also been integrated into the OSS system, in some cases, additional approval from local government authorities may be required, especially if the business is located in a sensitive or strategic area.
4. Environmental License (Izin Lingkungan)
If your business activities have the potential to impact the environment, you must obtain an environmental license. This could be in the form of:
- Environmental Impact Analysis (AMDAL)
- Environmental Management Efforts and Environmental Monitoring Efforts (UKL-UPL)
The requirement for these documents depends on the scale and type of your business operations.
5. Operational and Commercial License (Izin Operasional dan Komersial)
Some industries require additional permits to begin actual business operations. These licenses often relate to product standards, safety, and operational procedures. For instance:
- Food and beverage companies must obtain a distribution permit (Izin Edar) from the National Agency of Drug and Food Control (BPOM).
- Construction businesses require a Construction Services Business License (IUJK).
6. Manpower Report and Company Regulations
All companies that employ staff in Indonesia are required to submit a Manpower Report (Wajib Lapor Ketenagakerjaan) to the Ministry of Manpower. In addition, companies with more than 10 employees must prepare and register company regulations (Peraturan Perusahaan) with the local manpower office.
7. Tax Registration (NPWP & PKP)
While obtaining a Taxpayer Identification Number (NPWP) is part of the company registration process, additional tax-related permits may be necessary. For example, if your company’s revenue surpasses a certain threshold, you must register as a taxable entrepreneur (Pengusaha Kena Pajak/PKP) for VAT purposes.
8. Sector-Specific Licenses
Certain industries have more stringent licensing requirements. Here are a few examples:
Financial Sector
Companies in the financial sector, such as fintech, lending platforms, or insurance, must obtain licenses from the Financial Services Authority (OJK).
Health Sector
Health clinics, pharmaceutical companies, and similar businesses must secure licenses from the Ministry of Health and/or BPOM.
Education Sector
Educational institutions must receive operating licenses from the Ministry of Education, Culture, Research, and Technology.
Common Challenges in Obtaining Licenses
Navigating the licensing landscape in Indonesia can be complex due to:
- Changing regulations
- Varied requirements across regions
- Language barriers
- Bureaucratic procedures
To mitigate these challenges, many companies choose to partner with professional service providers who are experienced in local compliance and documentation processes.
Conclusion
Acquiring the necessary licenses after company registration is a critical step toward ensuring legal compliance and business sustainability in Indonesia. Each type of license serves a specific function and protects your business from legal complications, penalties, or operational shutdowns. While the OSS system has made progress in simplifying the process, expert guidance remains valuable, particularly for foreign investors or companies operating in heavily regulated industries.
Get Expert Help from CPT Corporate
At CPT Corporate, we specialize in guiding local and foreign businesses through every stage of the company registration process—including securing all the necessary post-registration licenses. Our experienced team ensures your business complies with Indonesian regulations, saving you time and avoiding unnecessary complications. Whether you’re starting a small trading company or launching a large-scale operation, CPT Corporate is here to support your business journey in Indonesia.
Contact us today to learn how we can assist with your company registration and licensing needs
