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Starting a Trading Company in Indonesia

Starting a Trading Company in ID

Trading companies are specialized 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 silver, coal, fertile soils, natural gas, petroleum, gold, bauxite, tin, copper, timber, and nickel. 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:  

 

Micro SUIP 

A Micro SUIP or SUIP Micro is a license for microsized businesses with a net worth of less than 50 million rupiah (US$3,560), excluding land and buildings. It must also be a a sole proprietorship or partnership and have its business activities managed and maintained by its owners or family members or close relatives.  

 

Small SUIP 

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. 

 

Medium SUIP  

A Medium SUIP or SUIP Menengah is a license for mediumsized 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. 

 

Large SUIP 

  • 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. 

 

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: 

Limited Liability Company 

  1. Decree regarding the legalization of the legal entity status of the company (Decree of Minister Law and Human Right) 
  2. Statement from the trading license applicant regarding the company’s business location 
  3. Domicile letter 
  4. Tax registration number (NPWP) 
  5. Copy of the deed of establishment (including any amendments of the Articles of Association, if any) 
  6. Two photos of the person in charge or director of the trading company 
  7. Copy of identity card (KTP) of the responsible person or director of the head office 

 

Cooperative Company 

  1. Statement from the trading license applicant regarding the cooperative’s business location 
  2. Domicile letter 
  3. Tax registration number (NPWP) 
  4. Copy of the deed of establishment of the cooperative which has been authorized by the competent government body 
  5. Two photos of the person in charge or manager of the cooperative 
  6. Copy of identity card (KTP) of the responsible person or manager of the cooperative 

 

CV/Firm 

  1. Statement from the trading license applicant regarding the company’s business location 
  2. Domicile letter 
  3. Tax registration number (NPWP) 
  4. Copy of the deed of establishment or deed that has been filed in the District Court 
  5. Two photos of the owner, manager, or responsible person of the company 
  6. Copy of identity card (KTP) of the owner, manager, or any other responsible person 

 

Individual Company 

  1. Statement from the trading license applicant regarding the company’s business location  
  2. Two photos of the owner or responsible person of the company 
  3. Copy of identity card (KTP) of the owner or responsible person 

 

Trading Companies 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. Therefore, branch offices of trading companies do not have to receive an SUIP. 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 

Negative Investment List 

All owners of trading companies in Indonesia must comply with theNegative Investment List of Indonesia. The Negative 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 activityTo begin undertaking other business activities, the owner of the trading company must apply for and receive more licenses.

 

Paul Hype Page & Co – OSS service provider and Asean Chartered Accountant.

Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia

Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.

 

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Step 1- Listen to your Business plan and Relocation needs.

Step 2- Analysis your Tax Planning

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Step 5- Assist as your company to hire staffs and handle all HR matters

Step 6- Every financial year end, we assist you with your yearly OSS Finanical and Tax Compliance

Step 7- Assist you to expand business to Malaysia, Indonesia, Vietnam and Thailand.

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Paul Hype Page

Website: https://www.paulhypepage.co.id

Posted on February 27, 2019 at 11:56 am
Categories: Business In Indonesia

Starting a Trading Company in Indonesia FAQs

Why is the Negative Investment List necessary?

The Indonesian government would like the country’s business scene to be less crowded and more open. An overabundance of foreign investment may cause the country’s business environment to become overcrowded and over saturated. Thus, the Negative Investment List was introduced to serve as a form of control against this overcrowding. 

Which are some of the most prominent trading companies in Indonesia?

Indonesia is home to many trading companies. Of these, some are more well-known than others. Among the most well-regarded trading companies in Indonesia are Starindo GemilangVanorie Jairo International, and Great Pacific. 

Do many foreign-owned trading companies exist in Indonesia?

The Indonesian trading company scene is one that has been experiencing much growth. Therefore, trading companies from many other countries have chosen to conduct business operations from Indonesia. These trading companies often originate from countries such as Thailand, Singapore, Australia, and the United Arab Emirates. 

 

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