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How to Open Company in Indonesia

How to Open Company in Indonesia?

How to Open Company in Indonesia – Everyone would want to set up a privately owned company that is a sole proprietorship. With this company a businessman has the authority to run an economic process in it.

They set up a sole proprietorship in order to meet their economic needs and earn profits to continue their lives. That’s why they are trying to establish a private company. But when you want to know how to open company in Indonesia, we must pay attention to the terms and procedures of the establishment of individual companies.

Terms of Establish Companies in Indonesia

You need to know first about the basic thing is the definition of company. The meaning of a company is any form of business that carries out any kind of business that has stable, fixed and long-term nature as well as a body established, working and domiciled in Indonesia’s beloved homeland for the purpose of searching for maximum profit.

In this article we will explore thoroughly to meet the necessary conditions in establishing individual companies and procedures of its establishment. First we will discuss about the terms how to open company in Indonesia; there are at least three important aspects that must be considered, among others:

  1. The first thing you must have as an entrepreneur is to find the human and natural resources that suits your business, the total amount of capital must be calculated properly and correctly. Capital can be obtained from personal pockets or savings, loans from relatives or relatives, loans from Bank and non-Bank financial institutions,
  2. Second is to compile and make a bookkeeping that contains about:
  • The state and amount of assets owned by the company.
  • Needs required by the company.
  • Working agreements that occur either with government or private parties.
  • Outflow of letters, documents, correspondence.
  • Company financial statements per period (month, year, quarter).
  • Archives of all letters, activities and more.
  1. Accuracy and compliance in paying taxes, there are several types of taxes to be paid, among others: income tax (PPH), Value Added Tax on goods and services, land and building tax and sales tax on luxury goods.
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Company Establishment Procedures

These are some of the conditions that entrepreneurs must consider before establishing a sole proprietor. Next we will discuss about the procedural of establishment of individual company.

  1. Things to consider before registering the place of business:
  • Place rental agreement

Most people who will open a private company rent a place as the location of the company. Of course there are some calculations before choosing a place such as environmental conditions, target markets, crowds and more. The lease process is usually done in the form of a written agreement or oral agreement between the landowner and the employer.

The legal basis for lease of premises in the case of business is Article 15544 and article 1560 of the Criminal Code. Where it is explained that a tenant can only use what is rented in accordance with the objectives and agreements that have been made and not allowed to damage or change the shape of the leased premises. In the event of a mistake the landowner can revoke the agreement.

  • Building permit

Establishing a building must have an accurate calculation and no other permission from the party concerned. Building permit must be through procedural that has been determined by the existing rules. One of the basic examples of laws governing building permits is Article 2 Kepgud 76/2000, whereby any activity that will build or establish a building must have or possess building permit from the surrounding government.

Submission of application for building permit can be submitted by letter written to the Governor through the Office for several buildings, among others: residential buildings, non-residential buildings, and other buildings.

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You need to know when the lease agreement and building permit building perms you get then you can report to the local village agr can immediately establish a building.

  1. Licensing of business activities

Business licensing is indispensable for the company because if there is no permit they will not get a protection from the existing legal entity. Licensing of business activities is encompassed with several important documents such as:

  • Certificate of Company Registration

In article 1 number 1 of Act No. 3 of 1982, the list of companies is a list of official records held in accordance with the provisions of law or regulations of implementation and in it contains the things that must be registered or registered each company and authorized by the competent authorities of the registration office the company.

  • Business license

Any company that performs a commercial activity is required to have a trading business license or often referred to as SIUP. In the Regulation of Minister of Trade Regulation No. 46 of 2009, article 4 paragraph 1, c is explained that there are several criteria of companies entitled to obtain this trade license or SIUP, among lian: individual or partnership business, has a net worth already deducted all forms of payment and a minimum deduction of Rp 50,000,000, excluding land and buildings.

Application or submission of trade license or SIUP may be submitted to the SIUP issuance official by submitting a letter of application signed by the owner or management of the company concerned on stamp duty, and other letters or documents in accordance with Minister of Trade Regulation no. 36 of 2007 in Attachment II.

  • Tax ID number

Each company must have NPWP or taxpayer principal number. NPWP is the number given to the taxpayer as a means in all matters concerning tax administration. This NPWP is used as a self-identification or identity of a company in exercising its rights and obligations related to taxation. The function of this principal number in addition to being an identifier is also able to maintain order in tax payment and in the supervision of tax administration.

  • License tampering
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Perhaps we are still wondering what is the permit for disturbance, in Article 1 number 3 of Permendagri no 27 of 2009 mentioned that the permit of disruption is the granting of business / economic activity permit for the individual and the group in a certain location which is of course the risk of disturbance, and places that have been determined by the central government as well as local government.

In Article 5 of Permendagri no 27 of 2009 also mentioned the completeness of documents that must be included in the permit of interference, among others: first is the registration form that contains the name of the company responsibility, company name, business address, business field, location or place of activity, companies and representatives who can be contacted can email or phone, completeness of facilities and technical infrastructure required in carrying out all activities, and the last is a statement of permission application about the inability to comply with the provisions of the legislation.

The second is a copy of the applicant’s ID card, a copy of the location or domicile certificate, a copy of the latest UN, a copy of the land title, a copy of the company’s deed, a copy of IMB / IPB / KRK and a copy of the NPWP. The third is a lease agreement if the entrepreneur does so. And the last is the approval letter from the local RT and RW.

Thus the explanation of the terms and procedures concerning the development and establishment of private companies, all of which have been arranged and packaged in a legal basis of Indonesia namely the law. Basically the procedures and terms in how to open company in Indonesia is not too difficult because the terms and documents that must be completed also easy.

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One Response to How to Open Company in Indonesia?
  1. Hi, I would like to make a company in Indonesia to export goods to my country, Mauritius.
    Could you please advise me who should I contact here in Jepara, Indonesia for the set-up.
    According to people I have spoken here, as a foreigner, I will need 3 billion Rupiah to be able to do the set-up.
    From the explanation I found on this website, it doesn’t look like the above is real.
    Still, as I don’t know where and who to turn to, I find myself in a difficult position.
    I would be most grateful to get the right way to follow to make this wish a reality.
    I thank you for your kind consideration and look forward to your reply.
    M. I. Husnoo


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