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Requirements for Company Set Up in Indonesia 2017

Company set up in Indonesia – From time to time the government seeks to facilitate the process of establishing the company. More and more companies are established, if the business runs well it will have a positive impact on economic growth and job opening. Based on the Ease of Doing Business (EoDB) indicator issued by the World Bank, in 2017 Indonesia’s ranking rose from 106 to 91 from 190 countries. Some of the indicators used as a reference in the preparation of EoDB include the ease of starting a business or company set up in Indonesia, access to power grids, building permits, insolvency proceedings and others.

To raise the rankings since the beginning of 2017, the central government and local governments have spawned a number of new rules and policies. Some of the rules are directly related to the company’s establishment process, partly to simplify the existing licensing process. The following are some of the latest regulations relating to the process and requirements of the company set up in Indonesia;

  1. Rules Relating to the Selection of Code of Business or Field of Business

The rapid development of information technology has made business model and business process also developed in such a way. In order not to miss, the government anticipates by making adjustments to the Standard Classification Code of Business Field of Indonesia which is regulated through the Regulation of the Head of the Central Bureau of Statistics.

Some of the new KBLI codes in Regulation 19/2017 heads that were not previously available in Regulation 95/2015 heads are web portals and / or digital platforms with commercial purposes (code 63120) and web portals and / digital platforms without commercial purposes (6312).

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It is important for you to be able to define the right business line and determine the most fitting code. Therefore, the selected code will determine the permissions required for the business being run.

  1. Rules Concerning Business Domicile and Zoning

It is important for you to know the requirements of business domicile in the area that will serve as the domicile of business to establish the company. This is because there are often different requirements between one area to another. For example, there are areas that still allow the use of a house as a place of business and some are forbidding it.

  1. Rules on Nuisance Permits (HO)

Permission of harassment is one of the legacies of the Dutch colonial government legislation enacted since 1926. Believe it or not, for some licensing items especially relating to special permits, the rules on improper permits still apply. For example to establish a travel agency company, restaurant, or catering, requires permit disturbance or HO (Hinder Ordonantie).

However, recently the Minister of Home Affairs has issued the Regulation of the Minister of Home Affairs No.19 of 2017 on Revocation of Regulation of the Minister of Home Affairs No.27 of 2009 on Guidelines for Determination of Nuisance Permits in Regions as amended by Regulation of the Minister of Home Affairs No.22 Year 2016 on Amendment to Regulation of the Minister of Home Affairs No.27 of 2009 concerning Guidelines for Determination of Nuisance Permits in the Region. Since the promulgation of this Regulation of the Minister of Home Affairs on March 30, 2017, then there should be no item of permit disability permit to take care of licensing in all parts of Indonesia.

  1. Requirements of the Social Security Administrator for Health and the Social Security Administration for Employment to Establish a Company with a License for Large-Scale Business License
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Social Security Administrator is a government program that aims to provide social protection and welfare, especially for workers or workers. The rules on the S Social Security Administrator are mandated by Law no. 24 Year 2011 on the Social Security Administrator. Article 15 through Article 17 of the law stipulates that every employer shall register himself and workers gradually to the Social Security Administrator (business entity or individual) may be subject to administrative sanctions in the form of reprimands and even penalties by the Social Security Administrator and is not certain public services.

In Government Regulation No.45 of 2015 concerning the Implementation of Pension Guarantee Program, it is mentioned that employers other than the organizers shall register all their workers to the Employment Agency for Social Security Administrator of Employment.

  1. Rules Concerning Trading Business License and Company Registration License

To simplify the company set up in Indonesia, the government is also continuing to improve the rules on Trade License and Company Registration License. After last year the government made a breakthrough to conduct the business license and trade registration certificate online, so now the government issued Regulation of the Minister of Trade No. 7 of 2017 on the Third Amendment of the Minister of Trade Regulation No. 36 of 2007 on the Issuance of Trade License trade minister 7/2017). The new rule concerning this Trade Business License states that the validity period of the Trading Business License shall be as long as the company engages in business activities.

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So as long as the business runs well and no information about the company is changed, then you do not need to renew the Trading Business License. Another case if you decide to change the field of business, increase the capital so that the classification of the company’s trade license also changed, or moved the business domicile. If so then even though the Trading Business License has not expired, you must keep renewing it.

In addition, for renewal of the Company Registration Certificate is no longer subject to administrative fees as the provisions concerning the administrative costs of renewing the Company Registration Certificate have been eliminated through the Regulation of the Minister of Trade No. 8 of 2017 concerning the Second Amendment to the Regulation of the Minister of Trade No. 37 Year 2007 on the Implementation of Company Registration (” Minister of Trade Regulation 8/2017 “).

Of course the government’s efforts to simplify the process of company set up in Indonesia should be appreciated. Especially from the aspect of the making of new regulations and the abolition of rules and policies that were previously considered to hamper the establishment of the company. It’s just that the effort must be accompanied by the implementation in the field. Because, in fact there are still policies that are not synchronized and the application of different standards between government agencies in implementing new rules or policies or the abolition of existing regulations or policies. This is our next homework.

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