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Starting a business in Indonesia: Guide

Staff Reporter | 10:08 PM |

Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Indonesia. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected from World Bank: Doing Business 
No.ProcedureTime to CompleteAssociated Costs
1Obtain the standard form of the company deed ; arrange for a notary electronically; obtain clearance for the Indonesian company's name at the Ministry of Law and Human Rights.4 daysincluded in procedure 4
2Notarize company documents before a notary public4 daysIDR 4,464,464
3Obtain a certificate of company domicile from the local municipality2 daysno charge
4Pay the State Treasury for the non-tax state revenue (PNBP) fees for legal services at a bank1 dayIDR 200,000 (name check) + IDR 1,580,000 non-tax state revenue (PNBP) fees for legal services
5Apply to the Ministry of Law and Human Rights for approval of the deed of establishment7 daysincluded in procedure 4
6Apply at the One Stop Service for the permanent business trading license (Surat Izin Usaha Perdagangan, SIUP) and the company registration certificate (Tanda Daftar Perusahaan/TDP)15 daysIDR 500,000 (TDP)
7Register with the Ministry of Manpower14 daysno charge
* 8Apply for the Workers Social Security Program (Jamsostek Program)7 days (simultaneous with previous procedure)no charge
* 9Obtain a taxpayer registration number (NPWP) and a VAT collector number (NPPKP)1 day (simultaneous with previous procedure)no charge
* Takes place simultaneously with another procedure.