Running a Company in Indonesia involves obtaining a number of legal documents. Precise knowledge regarding the right documents for your business entity in Indonesia is very important. Depending upon its Line of Business and type of Investor a company must obtain various kind of documents and permits from different Government organizations, but the basic and prior needs are similar for every company. The brief description of basic company documents is as follows:
1. Investment Permit (PPM -Pendaftaran Penanaman Modal):- Investment Permit (PPM) is a preliminary approval for company’s investment plans from BKPM (Indonesia Investment Coordinating Board). This permit consist of details of proposed capital by company, details of Line of Business, Directors, commissioners, Shareholders, Business Location and Important Licenses needed for further registration of company.
2. Article of Association (Akta Pendirian Perusahaan):- Article of Association specifies the regulations for a company’s operations. It defines the company’s purpose and lays out how tasks are to be accomplished within the organization, including the process for appointing directors and how financial records will be handled.
3. Tax ID Card (NPWP- Nomor Pokok Wajib Pajak):- The Indonesian tax office (Direktorat Jenderal Pajak) requires all taxpayers, individuals and business entities to have their own Tax ID Card (NPWP). NPWP is used to maintain order in payment of taxes and tax administration oversight.
4. Domicile Certificate (SKDU- Surat Keterangan Domisili Usaha):- Domicile Certificate (SKDU) is an essential document which must be obtained by every company residing in Indonesia. This certificate is issued by the Head of District (Kepala Kelurahan) of the area in which company is located. The address mentioned in the Domicile Certificate will be the official address of the company in case of any communication from all government institutions including Indonesian Tax Office, Immigration or Manpower Department.
5. Deed of Establishment (SK Menteri Kehakiman):- To obtain the status of Legal Entity in Indonesia every company must have Deed of Establishment (SK Menteri Kehakiman) from the Minister of Law and Human Rights. Deed of Establishment consist of Article of Association of company, Identity of founders of the company, the composition of Board of Directors and the Board of Commissioners of company and the identity of shareholders of the company.
6. Company Registration Certificate (TDP- Tanda Daftar Perusahaan):- Company Registration Certificate (TDP) is the proof that the company or business entity has been registered under Law No. 3 Year 1982 (UU No. 3 Tahun 1982) regarding Mandatory Registration of Company (WDP- Wajib Daftar Perusahaan). This registration is compulsory for every Foreign Invested Entity (PT-PMA), Local Invested Entity (PT, CV etc.) and Cooperative Entities.
7. Permanent Business License (IUT- Izin Usaha Tetap):- Permanent Business License (IUT- Izin Usaha Tetap) is a permit issued by Indonesia Investment Coordinating Board (BKPM) to Companies or Business Entities which are established in the framework of Foreign Direct Investment (PMA- Penanaman Modal Asing) or Domestic Investment (PMDN- Penanaman Modal Dalam Negeri). Permanent Business License (IUT) is issued as an operating permit to conduct commercial business activities in the field of sales of goods/services or in the field of industry. It is important to obtain Permanent Business License to acquire following facilities:
- To get import license
- Plan to hire the foreigner workers
- Visa recommendation for the use to foreign workers
- Duty exemption on import of goods