How to Apply for the Correct Business Licenses in Indonesia
Many Indonesians and foreigners would love the chance to do business in Indonesia because the potential for profit is substantial. However, you have to select the correct business license, depending on the kind of business you are putting up. Your line of business in the country will determine what particular business licenses in Indonesia you should apply for.
The Most Basic of the Different Business Licenses in Indonesia
There are three basic kinds of companies that can apply for their business licenses in Indonesia.
- Businesses that do not need infrastructure for their business activities
- Businesses which do need infrastructure for their business activities but lack such infrastructure at the time of application. (You will first have to apply for a water permit, a location permit and an environmental license).
- Businesses that do need infrastructure for their business activities and already own such infrastructure.
This kind of classification is specified in the law known as Regulation 24/2018.
Benefits of Having a Business Permit
Once you are granted a business license, you may freely engage in business unless contradicted by regulations or laws passed. If you close your business, that will also affect your business license status.
Some business activities that you may conduct in Indonesia are:
- Amend your land area, and even buy more land, if necessary
- Initiate activities for production and commissioning
- Invest in human resources
- Invest in better infrastructure
- Improve facilities
- Business permits also help you to invest in and then operate buildings
Three Additional Types of Licenses in Indonesia
You should also know the three other types of business licenses in Indonesia. These are:
General business license: This is given to companies that are just doing general business activities. If your company is a supplier of goods and services, then you need this type of license to operate.
Industrial business license: This is granted to manufacturers, excluding those who are involved in oil, gas and geothermal activities.
Construction business license: Companies whose activities revolve around construction need this type of license.
It is important to take note that these are the most common of the Indonesian business licenses. So, you will probably encounter them frequently as you go about doing business in the country.
Why You Need To Apply for a Business License
You need to inform the government about your legal business activities.
- To assure the public that your business activities are safe and follow accepted laws in Indonesia.
- You also need to assure the government and others that you and your company can be trusted, and follow pertinent laws.
- You need to inform everyone about the kind of business activities your company engages in, in Indonesia.
- Companies have to go through the necessary procedures and paperwork to organize the business situation within Indonesia. This helps avoid chaos in the country, particularly in the business sector.
Conclusion
It may be confusing for some people to understand the process of getting business licenses in Indonesia. That’s not surprising because honestly, the process is not straightforward. Moreover, you may have to apply for various licenses, depending on your line of business. Well, you can clear up much of this confusion by consulting us at 3E Accounting services about your business license application in Indonesia. You may also contact us for our services in other competency areas such as accounting, auditing and taxation, among many others.
