When setting up a company in any country, it is always vital to be mindful of the laws and regulations which exist in that country. Such is also the case for anyone who plans to set up a company in Indonesia. Just as is the case anywhere else in the world, those who have not been compliant with the country’s business laws as well as those who have not fulfilled certain criteria will not be allowed to start a company in Indonesia.

Those Who Do Not Have the Required License

Certain business activities to be conducted in Indonesia require a license before the business owner may commence with the undertaking of such activities. Business license provide these business activities with legality as well as official recognition from the authorities. Among the business licenses which may be required by a company which is based in Indonesia include ordinary business licenses, industrial business licenses, and construction business licenses. The business license which is to be selected will depend on the nature and business activities of the business in question. In Indonesia, business licenses are issued by authoritative bodies such as the Indonesian Investment Coordinating Board (BKPM) and the Head of Region Investment Coordinating Board (BKPMD). Licenses may only be received after an application and all supporting documents have received approval from the authorities. The expected duration for the completion of business license approval in Indonesia is 14 working days, and business licenses in Indonesia are typically valid for up to 30 years.

Those Who Attempt to Conduct Illegal Business Activities

There are certain business activities which the government of Indonesia has prohibited any business in the country from conducting due to various reasons which the government deems important. An example of this can be seen in local retail e-commerce companies. Anyone who plans to start such a company while also involving foreign direct investment will be barred from doing so. Foreigners who attempt to start an e-commerce business in Indonesia may not do so if they plan to be the sole owner of a business related to content publishing websites, marketplace websites which allow sellers on that website to advertise the services and products which have been placed on offer, and websites which allow a certain company to distribute its services via online methods.

Starting from 2020, another example of illegal business activities in Indonesia will become evident as exports of nickel and nickel ore will be banned. This ban was put in place by the government in order to increase the level of mineral processing done within Indonesia. Therefore, anyone who plans to start a business which is to be involved in the export of nickel, nickel ore, or nickel products will not be allowed to do so.

There are other business activities which are prohibited by the government; those interested in starting a business in Indonesia should learn more about which business activities are banned before attempting to start a business.


Those Legally Prohibited from Starting a Business

Those who have committed certain grievous offenses in the past may sometimes be barred from starting a business in Indonesia through legal means. A decision made by government authorities, a court, or any other authoritative body may remove the right to start a business in Indonesia from any individual.

Of course, if you have never set up a company in Indonesia before, you will certainly not be barred from doing so. For the purposes of company setup in Indonesia, contact us at Paul Hype Page & Co for assistance. The incorporation services which we provide have aided many a prospective company owner in Indonesia. By using our services, you can be sure that you will never be barred from starting a company in Indonesia.