Trading companies are specialised companies that cover all export and import operations and procedures. A trading company buys products in one country and sells them in different countries according to its own distribution network.
Indonesia is full of natural resources such as:
This fact, as well as the constant and stable growth of the Indonesian economy driven by the efforts of the country’s government to reduce the barriers to the conducting of business activities in the country, attracts many investors from around the world to start a trading company in Indonesia.
However, starting a trading company in Indonesia is not as easy as one might think. Those who have an interest in doing so need to obtain a trading license (SUIP) to perform trade activities in Indonesia.
Types of Indonesia Trading License (SUIP)
The first step in starting up a trading company in Indonesia is that of receiving a trading license (SUIP). There are four types of trading companies available in Indonesia. Each requires a different SUIP. They are as follows:
A Micro SUIP or SUIP Micro is a license for micro-sized businesses with a net worth of less than 50 million rupiah (US$3,560), excluding land and buildings. It must also be a sole proprietorship or partnership and have its business activities managed and maintained by its owners or family members or close relatives.
A Small SUIP or SUIP Kecil is a license for small businesses with a net worth of more than 50 million rupiah (US$3,560) but not more than 500 million rupiah (US$35,606), excluding land and buildings.
A Medium SUIP or SUIP Menengah is a license for medium-sized businesses with a net worth of more than 500 million rupiah (US$35,606) but not more than 10 billion rupiah (US$712,125), excluding buildings and land.
A Large SUIP or SUIP Besar is a license for large sized businesses with a net worth of more than 10 billion rupiah (US$712,125), excluding land and buildings.
Indonesia Trading License Application Form
Once the SUIP to be obtained has been determined, a prospective business owner must then submit an application to the Indonesian government for a trading license by filling up the trading license application form. Different types of trading license application forms are used for different varieties of business entities. The following are the details of each form:
Trading Companies in Indonesia Which Do Not Require an SUIP
Not every trading company which has been set up in Indonesia requires an SUIP before it may begin conducting its trading activities. If a trading company conducts non-trading business activities on top of its activities within the trading sector, the company will not be required to receive an SUIP before its setup is completed.
Branch offices of trading companies are also not mandated to have an SUIP. This is due to the fact that Indonesian company laws define these companies as units of the parent company. They may even be assigned by the parent company to perform business activities which are completely unrelated to trading.
Representative offices of trading companies are also exempt from the SUIP requirement. This is because they are officially defined as companies which act on behalf of their corporate headquarters. Thus, it is also possible that representative offices are not carrying out any trading activities. This means that representative offices of trading companies are not required to obtain an SUIP.
Important Information for Those Starting a Trading Company in Indonesia
Positive Investment List
All owners of trading companies in Indonesia must comply with the Positive Investment List of Indonesia. The Positive Investment List was created by the Indonesian government as a method by which Indonesian business interests are to be protected. This list mentions the businesses which ban foreign investments.
For further information on this matter, consult our local Indonesian corporate specialists of Paul Hype Page & Co who are well-versed and experienced when dealing with such matters.
Customs Identification Number
In accordance with the Directorate General of Customs and Excise (DGCE), any trading companies must have customs identification numbers issued by the DGCE to be in compliance with the customs regulations of Indonesia. This customs identification number is valid if the company has been actively performing its usual business activities over the last 12 months.
Business Activities Per License
A trading company license that was provided by the government can only be used for one type of business activity. To begin undertaking other business activities, the owner of the trading company must apply for and receive more licenses.
Hi how much to incorporate a company? And the timeline
The cost of incorporation will depend on the company which you plan to incorporate. We have three different packages which cater to anyone who plans to incorporate any of three different company types in Indonesia. We charge US$1,200 for our representative office incorporation package, US$3,700 for our PMA incorporation package, and US$8,900 for our PT incorporation package.
On average, it takes approximately 23 working days for the entire incorporation process in Indonesia to be completed.
For further information about incorporation in Indonesia, please contact us.
Thank you for your question.