What to Know When Applying Business Licenses for Agricultural Sector
Indonesia has been exerting efforts in order to make it’s business climate suitable and friendly to all investors.
Just last year, the Indonesian Minister of Agriculture released a regulation pushing for the ease of doing agricultural businesses in the country. The new mandate, to put it simply, is aimed at simplifying and streamlining the processes to acquire business licenses for the agricultural sector.
At the same time, the initiative is seen attracting more investments—both local and foreign—for the agriculture industry.
Such a move was only expected from the Indonesian government given that its country has the capacity to produce different agricultural products, thanks to its fertile soils. The agriculture sector has been a major source of livelihood for many households for a long time now.
Ease of Doing Business
Regulation 5/2019, which tackles the procedures for acquiring business licenses for the agricultural sector, was recently enacted by the Indonesian government.
This simplifies and streamlines the application process with the help of an online platform called Online Single Submission (OSS). Therefore, it effectively eliminates unnecessary waiting time as well.
The online application covers business licensing classification, business licensing requirements, application fees, and supervision.
Remember that you can only proceed with your license application once you have secured your business identification number.
Types of Agricultural Licenses
According to the Indonesian Minister of Agriculture’s Regulation Number 40/2019, there are six categories of commercial or operational licenses a firm can apply for and each depends on the scope of the business. Refer to the list below:
- Business license – plantation, food crops, horticulture, livestock, and veterinary medicines.
- Entry license – biological agents.
- Entry and exit licenses – plant seeds, genetic resources, feed ingredients of animal and plant origins, feeds, veterinary medicines, and pets.
- Recommendation licenses – animal breeds, animal products, ruminants, pigs, horticultural products, tobacco and certain rice.
- Certification license – veterinary medicine manufacturing.
- Registration license – fresh food of plant origin, agricultural tools and machinery, feeds, veterinary medicines, plant varieties, pesticides and fertilizers.
Other Permits and Documentation
Applying business licenses for the agricultural sector is not enough. in short, additional permits and documentary requirements are needed depending on the nature of your business.
Companies secure plantation business licenses for cultivation, processing agricultural products, and seed provisions, among others. These require the submission of the following:
- location permit
- environmental permit
- permit for the release of forest area
- a work plan on estate development
- statement of customary law community agreement for customary land used
- information of beneficial ownership
Food crops business license, meanwhile, covers crop production processes, postharvest management, and seed provisions. The following are required in relation to this:
- location permit
- work plan
- report on environmental impact analysis and environmental monitoring
- statement of implementing quality assurance on food crop products
- biological safety recommendations
For horticulture business license, it includes cultivation and seed provision for medium to large scale companies and individual entities. This also demands:
- feasibility study
- the work plan of businesses
- report on environmental impact analysis and environmental monitoring
- letter of cultivation rights
Medium to large companies, meanwhile, are usually the ones applying for livestock business licenses. Should you seek to secure this license, you also need to prepare the following:
- location map permit
- work plan outlining the development of livestock business
- statement of implementing good breeding practices, farming practices, and partnership
Why You Should Invest in Indonesia’s Agricultural Industry
While you need to know how to secure business licenses for the agricultural sector, it is also important to be aware of the reasons why Indonesia is the perfect spot for your investment.
As mentioned earlier, the country is considered a major producer of agricultural products. Among these are palm oil, rubber, coffee, cassava, cocoa, tea, tropical spices, and rice.
The country also improved its agricultural production with the help of better technology to produce high-yielding rice varieties. Such innovative technology also granted more access to fertilizers and additional rural infrastructure, among others, in the past four decades.
Indeed, Indonesia’s agricultural offerings and friendly business environment are making it very attractive for investors to put in their money to the industry.
Do you need help acquiring your Indonesian business license? We have got your covered. Contact us, 3E Accounting Indonesia, and our dedicated team will gladly assist you.
