Business License in Indonesia: Requirements and How to Apply

For all Low-Risk KBLI, your NIB automatically serves as your Business License in Indonesia. However, depending on the risk classification, other companies will require further licenses before they can start their business operations in the country.

In this article, we will take a look at the essentials of securing a further Business License if your KBLI is not categorized in the Low Risk KBLI. 

Understanding the New Business License System in Indonesia

In recent years, the Indonesian government has made significant efforts to improve the ease of doing business in the country. One of these is the implementation of a risk-based business licensing system under the Government Regulation No. 5 of 2021.

As per GR 5-2021, business licenses (Perijinan Berusaha) are now issued based on the risk classification of the business activity or industry, as defined by the KBLI. 

This replaces the previous system of business licensing based on each business activity, making it easier for low and medium risk businesses to comply with business licensing regulations.

Following are the risk levels and types of business licenses required for carrying out business activities for each level in Indonesia:

1. Business License for Low-Risk KBLI Companies

For business activities classified as low-risk, companies only need to secure NIB to start their business operations. The NIB consolidates formerly separate permits such as import permits, customs registrations, and Permanent Business License (IUT) into one registration. It acts as your primary business license in Indonesia and is mandatory for all business entities operating in Indonesia.

Examples of low-risk KBLI classifications include sectors such as Wholesale Trade of Various Kinds of Goods (KBLI 46900) and Wholesale Trade in Machines, Equipment, and Other Supplies (KBLI 46599). 

However, keep in mind that having an NIB does not exempt your business from obtaining additional industry and product-specific licenses. These include but are not limited to BPOM Registration, Halal Certification, and others, depending on the nature of your business activities.

2. Business License for Medium-Low Risk KBLI Companies

If your planned business activities are classified as medium-low risk, you need to secure the NIB and provide a self-declared Standard Certificate (Statement Letter) stating the company’s commitment to comply with Indonesian business standards and regulations.

Examples of medium-low risk KBLI classifications include:

• companies operating in the Complementary Fertilizer Industry (KBLI 20127)
• Web Portal and/or Digital Platform with Commercial Purposes (KBLI 63122).

3. Business License for Medium-High Risk KBLI Companies

In addition to NIB, medium-high risk companies must obtain a verified Standard Certificate issued by the Central or Regional Government. During this process, authorities conduct a survey of the business premises to verify compliance with operational requirements.

Industries under the medium-high risk category include Data Processing (KBLI 63111) and Construction of Accommodation Services (KBLI 41017).

4. Business License for High-Risk KBLI Companies

High-risk businesses face the most stringent requirements, as their NIB must be supplemented with an Operating License (IZIN). These licenses are granted only after meeting specific criteria, such as land acquisition, facility setup, and workforce hiring. 

Examples of high-risk businesses include:

• Conventional Life Insurance (KBLI 65111)
• Overseas Worker Selection (KBLI 78102)

These businesses are often subject to oversight from the Financial Services Authority (OJK) and other regulatory bodies.

Emerhub’s local experts will handle necessary submissions and secure required licenses based on the risk-classification of your planned business activities.

How to Apply for a Business License (NIB) in Indonesia

Securing a Business Identification Number (NIB) is a critical first step before launching your business in Indonesia. The process involves meeting specific legal requirements and providing the necessary documentation to comply with Indonesian regulations. Below, we outline the essential steps and documentation needed to obtain your NIB.

Pre-Requisites for Obtaining a Business License (NIB) in Indonesia

Before you can apply for a business license, your business must be established as a legally recognized entity in Indonesia. For foreign investors, this typically means registering either a PT PMA (foreign-owned limited liability company), or Representative Office.

Once your legal entity is registered, you can apply for necessary licenses and permits.

Steps to Apply for a Business License in Indonesia

The process of applying for a Business Identification Number (NI) involves several key steps. Here’s what you need to do to secure your business license in Indonesia:

1. Register Your Legal Entity: To apply for a business license, the first step is to register a legal entity (PT PMA, representative office, etc) in Indonesia. Without a registered legal entity, you cannot secure NIB or additional business licenses.

2. NIB Application Submission: Once your legal entity is registered, the next step is to prepare mandatory documents and submit the NIB application to relevant authorities.

3. Secure Risk-Based Specific Licenses: Depending on the risk classification of your KBLI, you will need to submit separate applications for additional permits and licenses such as Standard Certificate or the Operating License (IZIN).

4. Ensure Post-Licensing Compliance: After obtaining your NIB and any sector-specific licenses, you must maintain compliance with Indonesia’s ongoing regulatory requirements. This includes regular tax filings, investment reporting, and ensuring that industry-specific licenses are renewed as needed. Depending on the industry, these licenses may require renewal every 1 to 5 years.

Secure Your Business License in Indonesia with Emerhub

Navigating the business license application process can be complex and requires you to fulfill several requirements, additional risk-based licensing, and post-compliance essentials. Delays in approval processes are common if documentation is incomplete, incorrect, or not properly translated. 

As part of Emerhub’s company incorporation services, our team of experts will handle every step of this process on your behalf to ensure timely approvals. Furthermore, we will provide crucial local insights to optimize your business setup, minimize potential delays, and help you avoid costly mistakes throughout your operations in Indonesia.

Ready to secure your business license in Indonesia? Fill out the form below to get in touch with one of our local experts!