Understanding Small Enterprises in Indonesia

Small enterprises are a distinct category of private limited companies in Indonesia. To qualify as a small enterprise, a company must meet two of three specific criteria. Firstly, their annual turnover should not exceed IDR10 million. Secondly, their total assets should also be below IDR10 million. Thirdly, the staff count is typically limited to 50 individuals.

 

Benefits of Small Enterprise Classification

Being classified as a small enterprise comes with significant advantages. One key benefit is that these companies are exempt from mandatory audits, which can lead to substantial cost savings, especially in audit fees. However, it’s important to note that this exemption applies to the entire business group if the company is under corporate ownership.

Audit Requirement if Criteria Not Met

A company must undergo a mandatory audit if it does not meet at least two of the three stipulated criteria. This means that the exemption from audits is contingent on meeting the defined financial thresholds.

Opportunities and Challenges

The classification as a small enterprise in Indonesia presents both opportunities and challenges. While it offers cost-saving benefits through audit exemptions, companies must carefully consider and adhere to the qualifying criteria. This requires a strategic approach to leverage the advantages while complying with the rules.