Permits, Licenses, and Taxes: Important Organizations for Businesses in Indonesia

Are you planning to do business in Indonesia? First, get to know these government agencies.

Indonesia’s bureaucracy can seem overwhelming with its many ministries and other forms of government agencies. However, it’ll be easier to understand if you focus on the organizations that are most relevant to you as a businessperson in Indonesia.


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So, here are four organizations that new businesses in Indonesia should know.

1. Indonesian Investment Coordinating Board (BKPM)

The BKPM headquarters in Senayan, South Jakarta.
The BKPM headquarters in Senayan, South Jakarta.

In Indonesia, the Indonesian Investment Coordinating Board is known as Badan Koordinasi Penanaman Modal or BKPM. They are the Indonesian government’s primary agency for managing both domestic and foreign investment coming into the country.

Specifically, BKPM is in charge of coordinating investment policies and services according to Indonesia’s regulations. Their goal is to promote and boost domestic and foreign direct investment by creating an attractive and comfortable investment climate.

So, if you’re a foreign investor planning to enter Indonesia, BKPM will be one of the essential institutions you should know. You’ll be interacting with them a lot as a point of contact in Indonesia, especially during your incorporation phase.

You’ll need them for:

2. Ministry of Law and Human Rights (Kemenkumham)

The Ministry of Law and Human Rights complex in Kuningan, South Jakarta.
The Ministry of Law and Human Rights complex in Kuningan, South Jakarta. Source: Patroon.

In Bahasa Indonesia, the Ministry of Law and Human Rights is known as Kementerian Hukum dan Hak Asasi Manusia (Kemenkumham). Specifically, they’re in charge of executing and overseeing legal policies on behalf of the Indonesian government.

Businesses – especially foreign companies – will probably interact most often with two divisions of this ministry:

  • The Directorate General of General Legal Administration (AHU), and
  • The Directorate General of Immigration (Imigrasi).

Directorate General of General Legal Administration (Ditjen AHU)

In Indonesia, this division of the Ministry of Law and Human Rights is known as Direktorat Jenderal Administrasi Hukum Umum (Ditjen AHU). They’re in charge of documenting Indonesia’s companies, notaries, political parties, and other legal entities.

Moreover, they will be your primary point of contact for incorporating a legal entity for your company in Indonesia. But most of the time, you’ll probably be doing your business with them through your notary.

You’ll need them for:

  • Submitting your company name,
  • Submitting your Articles of Association, and
  • Getting your Deed of Establishment.

Directorate General of Immigration (Ditjen Imigrasi)

In Indonesia, this division of the Ministry of Law and Human Rights is known as Direktorat Jenderal Imigrasi (Ditjen Imigrasi). As the name implies, they’re in charge of approving and documenting foreign tourists and expatriates in Indonesia.

You’ll need them for:

  • Getting KITAS or stay permits for your employees or their families,
  • Getting business visas for your partners or overseas employees who are visiting Indonesia.

3. Ministry of Manpower (Kemnaker)

The Ministry of Manpower headquarters in Gatot Subroto, South Jakarta.
The Ministry of Manpower headquarters in Gatot Subroto, South Jakarta.

In Bahasa Indonesia, the Ministry of Manpower is known as Kementerian Ketenagakerjaan (Kemnaker). They’re in charge of documenting and executing policies related to domestic and foreign employment.

So, if you plan to hire foreign employees, you’ll also need to report and get approval from this agency.

You’ll need them for:

  • Getting approval for your Foreign Manpower Utilization Plan (RPTKA).

4. Directorate General of Taxes (Ditjen Pajak)

The Directorate General of Taxes headquarters in Gatot Subroto, South Jakarta.
The Directorate General of Taxes headquarters in Gatot Subroto, South Jakarta.

In Indonesia, this institution is known as Direktorat Jenderal Pajak or Ditjen Pajak. It’s a division of Indonesia’s Ministry of Finance, which – as the name implies – is the government’s primary authority for financial and tax policies.

Because business entities in Indonesia have to pay taxes – whether foreign or domestic – most of them will be interacting with this institution relatively often.

You’ll need them for:

  • Getting a Tax ID (Nomor Pokok Wajib Pajak or NPWP),
  • Submitting your employee income taxes, sales taxes, and other taxes, and
  • Filing your annual tax reports.

5. National Agency of Drug and Food Control (BPOM)

Facade of BPOM headquarters in Johar Baru, Central Jakarta.
Facade of BPOM headquarters in Johar Baru, Central Jakarta. Source: Trubus.id.

In Indonesia, this institution is known as Badan Pengawas Obat dan Makanan or BPOM. This non-ministerial government agency is in charge of monitoring the safety of consumer drugs, food, and other products such as:

  • Therapeutic products,
  • Narcotics,
  • Psychotropics,
  • Addictive substances,
  • Traditional medicines,
  • Cosmetics,
  • Complementary products,
  • Processed food, and
  • Hazardous materials.

For reference, their function is roughly similar to the United States Food and Drug Administration (FDA) or the European Medicine Agency. Hence, they’re critical to know if you plan to make or distribute consumer goods.

You’ll need them for:

  • Testing and registering your drug and food products,
  • Getting distribution permits, and
  • Getting information about drug and food safety.

How to contact them?

The problem is, your business might need to go to all of these organizations to get different things at different times. So, it can be challenging to keep track of all of them, especially if you’re a new business without much time or resources.

In cases like this, it would be best to have a representative on the ground who can help communicate with local organizations and help you get everything you need.


Greenhouse offers an online platform that allows you to book business incorporation services and connect with market entry consultants in your target markets.

We’ll connect you with experienced consultants on the ground who can help answer your questions about doing business in Indonesia.


 

 

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