irsan muharam and partners

Business Establishment and Licensing

The government is intensively improving Indonesia’s economy, which is growing slowly due to this pandemic, by making it easier to start a business. One reason is the rising unemployment rate, due to a wave of layoffs. With this convenience, people can start their business smoothly.

In the past, one of the difficulties for starting a business was access to obtaining permits. a long bureaucracy with piles of documents as requirements is an annoying scourge for novice business actors. However, now the government has simplified the licensing system, one of which is by building an OSS.

Business establishment is a procedure or stages that must be passed to establish a business entity. The goal is to get as much profit or profit as possible. Then, this institution will use it to develop the business.

Legal basis

The government has established standard rules regarding the establishment of individual businesses in the form of PT, CV, cooperatives, or others. The aim is to protect business entities, as well as the interests of the people who are indirectly involved in the process. 

The legal basis for establishing a business is regulated by law through the following rules:

  1. Civil Code or Criminal Code
  2. Law No 40/2007 regarding Limited Liability Company (PT)
  3. Law No. 20/2008 regarding MSME business activities (Micro, Small and Medium Enterprises) 
  4. The most recent regulation is Law Number 11/202 concerning Job Creation
  5. PP No. 29/2016 which regulates the provisions for the amount of Changes in the Authorized Capital of the Company (PT)
  6. Regulation of the Minister of Law and Human Rights No. 3.2017 which regulates the amount of Notary Legal Service Fees for the establishment of PT for MSMEs.

Trading Business Establishment Permit

One of the principles of economics when running a business is to make as much profit as possible with as little capital as possible. Basically, every business has the same goal. This is no different when business people intend to set up a trading business in 2021.

It is no different from the process of establishing a business and obtaining other business permits. Business actors, whether in MSMEs or others, still have to carry out their main obligations first, namely taking care of legality. The document requirements are not much different, so it will make it easier for those who are going to open a business other than the existing one.

The first step is, of course, to register the trading business with the relevant agency. You must complete all the requirements so that the submission process runs efficiently. The stages of submitting a permit for the establishment of a trading business are as follows:


To obtain a Trading Business License, it is enough to go to the Office of the Trade Service to pick up and complete the SIUP registration form. Sign the file with sufficient stamp duty. The owner or person in charge of the company can sign it. 

Proceed with paying the SIUP fee. Submit back the completed form along with the attached required documents. Wait some time, until the making of the SIUP is complete.

Certificate of Business Domicile (SKDU)

Business actors can apply for SKDU at the sub-district or sub-district office that is in accordance with the domicile of the business. Business people are required to have this document because it is a requirement to make other permits, such as corporate TIN, TDP and others.

Trade Business Permit 

Business actors are required to have this document as valid proof of the legality of trading businesses. Individual business people usually have a trading license by submitting an application to the Regional Office of the Ministry of Industry and Trade.

Tax ID number 

The next step is to take care of the NPWP or taxpayer identification number. This document is the identity of the taxpayer so that he can carry out his obligations to pay taxes in accordance with applicable regulations. Also applies as administrative completeness on other requirements.

Business Place Permit 

Another mandatory document is a business location permit. Both individuals, business entities, or companies must have it. The file is proof of licensing and the legality of the place of business. The permit must of course be in accordance with the regional spatial layout which will comply with the provisions of the investment scheme.

Business actors can obtain it by submitting an application to the local regional government according to the domicile of the place of business. This document is valid for 3 years and after that you can extend it again by completing the terms according to the provisions.

Industrial Business Permit

Entrepreneurs are required to have an Industrial Business License with the provisions of using a capital of 5 million to 200 million to carry out their productivity. The document is a statement of business legality that you submit to the relevant agency.

Business actors can obtain this permit by submitting an application to the Integrated Licensing Service Office for Level II Regions, Cities or Districts. This submission is in accordance with the domicile of the business. Furthermore, if your business has grown large, then the entrepreneur can carry out the application process in the province. The agency that handles it is the Level 1 Integrated Licensing Service Office or BKPM .

Principle Licensing

Business actors wishing to establish their business in an area can obtain this principle permit. The local government at your business domicile will issue it and use it as a source of regional investment.

Certificate of Company Registration

TDP is valid proof that the business has been officially registered. Entrepreneurs are required to have it, especially if the business entity is in the form of a PT , CV or firm. Thus businesses that are not included in the category of legal entities are not required to own one.

Industry Registration Certificate

You must have an Industrial Registration Certificate if your business is engaged in the industrial sector. Employers can obtain this document from the local Industry Office. In the small business category with an initial capital of IDR 5 million to IDR 200 million, excluding land and buildings.

Building permit

IMB is a permit to construct a building that will function according to the license. The government issues this building permit with the aim of maintaining order in land use. Also to ensure that its function is in accordance with city planning regulations that apply to the business sector.


BPOM is an institution that issues business licenses for the beverage, food and drug consumption product segments. By owning it, the public believes that the product has gone through various good fabrication processes and is in accordance with food safety. This document also acts as a permit if you are going to market the product.

HO or Nuisance Permit

This Nuisance Permit must be owned by entrepreneurs who have a place that is dangerous and at risk of causing public disturbance. Including disturbing the order and peace of the people who are in the surrounding environment.

Establishment of a business is one of the matters regulated in Law no. 13 of 2003, namely regarding employment. Therefore employers are required to consider the rights of employees in obtaining job protection by registering with the BPJS Ketenagakerjaan program. Thus the protection of health and work safety is guaranteed.

In order to establish a business, entrepreneurs are required to have all the permits required in order to obtain business legality. Apart from that, it guarantees the safety of its users. Because by having these various documents, the resulting product will be safe to use.