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Permanent Business License in Indonesia

Permanent Business License in Indonesia

Permanent Business License in Indonesia – Licensing is not only done in the establishment of a business, but many consequences of the business that also require licensing. For example, permit crowd for restaurant business, permission plug and other names. Underlying the rule is Presidential Instruction No. 5 of 1984 dated April 11, 1984 on Guidelines on the Implementation and Control of Licensing in the Field of Business.

Business permit rules are established so that the implementation in any business establishment can take place properly, structured with applicable legal procedures, and accountable for its legality. The operating company must have a permanent business license in Indonesia.

Important business licenses are needed to support the running of a business, whether individual, small and medium enterprise “SME” or large-scale business. Having a business license is the same as having the identity of your business, so that the business being mobilized is legal or legitimate because it obtains a license or permit from an authorized government agency. One such business license is a permanent business license.

Authority of permit by BKPM when viewed from the context of Law number 22/1999 and Law number 32/2004, which became the regional authority. Article 13 and Article 14 of Law no. 32 implies, the administrative service of capital investment is a provincial mandatory affair for the provincial scale, and is a mandatory district or city affair for the district or city scale. With the Presidential Decree, BKPM is the spearhead for Indonesian investment licensing, so there is a recentralization of investment licensing from the region to BKPM.

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Permanent Business License “IUT” is a license issued by the Capital Investment Coordinating Board “BKPM’ for a company, business entity of PT, established with the intent of Foreign Investment “PMA” or Domestic Investment “PMDN”.

This permit shall be an operating license for all businesses engaged in commercial activities of services and or goods and industries. The company’s legality in carrying out business related to the capital of the wider community has a binding provision. IUT must be taken care of when the business has been in production and has exceeded the specified limit of three years.

Authority of permit by BKPM when viewed from the context of Law number 22/1999 and Law number 32/2004, which became the regional authority. The procedures, terms and regulations for permanent business license in Indonesia must also have a legal basis. Article 13 and Article 14 of Law no. 32 implies, the administrative service of capital investment is a provincial mandatory affair for the provincial scale, and is a mandatory districts or municipal affairs for the district or city scale.

1. Licensing of Investment

BKPM became the spearhead for Indonesia’s investment licensing in the presence of the Presidential Decree, so that there was a recentralization of investment licensing from the region to BKPM. In the implementation of licensing of investment as stipulated in the guidelines of investment procedures issued by BKPM there are types of permits to be administered, namely:

  • Permanent Business License.
  • The plan for the use of foreign workers.
  • permission of limited importer identification number.
  • Exemption or exemption of import duty on the import of goods.
  • Capital, or raw or auxiliary materials and other fiscal facilities.
  • Visa Recommendation for the use of foreign workers.
  • Extension of permits to employ foreign workers working in more than one province.
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2. Licensing of Provincial Government

Permits issued by the Provincial Government in accordance with their respective powers, consist of:

  • Extension of permits to employ foreign workers working in districts or municipalities within a province.
  • Licensing issued by the City or Regency Government, namely:
  1. Location permit
  2. Certificate of land rights
  3. Building permit “IMB”
  4. Nuisance Act permit “HO”
  • Permanent Business License as an operating license to conduct commercial business activities in the field of Trade in Goods or Services or in the field of Industry as the implementation of Permit of Foreign Investment “PMA” or Domestic Investment “PMDN” previously obtained by investment companies. The Regulation explaining about Investment is stated in RI Law number 25/2007.

3. The categorization of a Foreign Investment or Domestic Investment Business permit

  • Companies running in the field of General Trading, Other Goods or Services are granted Permanent Business licenses as operational permits.
  • Companies running in Industry or Manufacturing outside of oil, gas and geothermal mining, obtain Industrial Business license as operational permit.
  • Provisions of Permanent Business License, to maintain a permanent business license in Indonesia may be a Permanent Business License that is enforced if the company has been in production and has exceeded the three-year time limit.

Terms to create a Permanent Business license

  1. Photocopy of Notary and Amendment Deed.
  2. Copy of Company Registration Certificate “TDP”.
  3. Photocopy of Building Permit “IMB”.
  4. Photocopy of Justice and Change Decree.
  5. Photocopy of domicile.
  6. Photocopy of Tax ID Number “NPWP”.
  7. Photocopy of SP BKPM, Letter of Approval from Investment Coordinating Board.
  8. Rent an office.
  9. Photocopy of the Nuisance Act “HO”
  10. Investment Activity Report “LKPM”.
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4. Procedures

The IUT Management Process is issued by the Capital Investment Coordinating Board “BKPM” or the Regional Investment Coordinating Board “BMKD”. To take care of it please come to BKPM or BKPMD located in the contact section. Valid Period of Permanent Business License “IUT” for Foreign Investment “PMA” shall be valid for thirty years. Permanent Business License for Domestic Investment “PMDN” is valid as long as the company operates or produces.

5. Term

The Permanent Business License for Domestic Investment is valid for as long as the company operates or produces. “IUT” Permanent Business License for Foreign Investment shall be valid for thirty years of this permanent Business License as a permanent business license in Indonesia.

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