Before an electronics company based in Indonesia can be incorporated, it is required to first obtain a principal license from the Investment Coordinating Board of Indonesia (BKPM). There are several important points stated on a principal license. One of these is the total investment planned. This is done via a breakdown by amount invested in land and buildings, machinery, other investments, and working capital. The location of the company’s head office and factory will also be mentioned. In most cases, this location will be listed as tentative. Products and annual output as well as the company’s detailed production flowchart are also to be stated.
After BKPM grants the principal license, the company will next be required to open a corporate bank account for its financial activities. Hiring of workers, who may be either locals or foreigners who have received due approval, must also be done. Work permits are to be issued to any eligible worker who requires one, should such be possible.
If you require any assistance with the incorporation of a company in Indonesia, we at Paul Hype Page & Co will be able to serve your needs. Our incorporation experts understand much about company incorporation in Indonesia. Therefore, by working with us, you can be certain that the incorporation of your new Indonesian company will be completed in the most suitable manner possible.
Construction of the Factory
The company is required to obtain land for the building of the factory. In cases in which the land will be rented, the rent agreement must be for at least three years.
The company must choose either an industrial or non-industrial area. In most cases, industrial areas are safer and more effective, but non-industrial areas can be considerably cheaper.
Application for API-P (Import Identification Number)
In many cases, a company will need to import machinery from abroad. Every manufacturing company based in Indonesia may apply for the import license known as the API-P which allows for the importing any products which are required by the company.
Licenses Related to Indonesian Electronics Companies
Obtaining a Business License
To obtain a business license, the business actor must first obtain a Business Identity Number (NIB) and submit all required certificates. These certificates may include a location permit, water location permit, environmental permit, and building establishment permit.
Once the required certificates have been submitted, the OSS system will automatically generate the business license for the applicant. Those who have received a business license may acquire land, amend the amount of land to be used by a company, build and operate buildings to be used by the company, procure equipment and facilities, hire employees; (f) complete certification or quality testing, effect commissioning, and produce goods or services.
Obtaining a Commercial or Operational License
For certain business activities and products, the owner of the business is required to obtain an operational or a commercial before selling products within the Indonesian market.
Permanent Business License
If a business owner plans to construct a factory, this process may start once the principal license has been issued. Once at least 80% of the machinery has been installed, but no later than three years after the issuance of the principal license, the company in question is required to apply for a permanent business license.
Obtaining any required business license in Indonesia is not necessarily a simple process. Fortunately for you, we at Paul Hype Page & Co are always willing to take you through this process. Through our assistance, we will see to it that your company obtains all necessary licenses lawfully and ethically. We will also contact any relevant authorities on your behalf if you need us to do so for you.