How to Establish a Company in Indonesia

When you are going to set up a company. There are stages of establish a company in Indonesia:

1. Choose the form of business organization
2. Choose name of company
3. Making Authentic Deed
4. Published to the court
5. For Limited Liability Company or Perseroan Terbatas (Indonesian name), must get legality of Law Ministry
6. Get Business License / SIUP (Surat Izin Usaha Perdagangan)
7. Get sign of Company Registration / TDP (Tanda Daftar Perusahaan)
8. Brand registration / Intellectual Property Registration (NOT MANDATORY)
9. Get Tax ID Number / NPWP (Nomor Pokok Wajib Pajak).

Below I will explain all of them.

1. FORM OF BUSINESS ORGANIZATIONS

You have to choose one from 6 of business organization. There are 6 form of business organizations:

1. Sole Proprietorship;
2. General Partnership, in Indonesia called as Firma;
3. Limited Partnership, in Indonesia called as CV (Commanditaire Vennotschap);
4. Limited Liability Partnership;
5. Corporation;
6. Limited Liability Company, in Indonesia called as Perseroan Terbatas

About explanation of busines organization, I already explained at this website but in the other article, you could search in column of “What are you looking for” in this website.

2. NAME OF COMPANY

The company name is an identity that is used by the company to run its business. The company name attached to the company, the company name can not be separated from the company. If the company disappears, then the company name also disappeared.

How to give company name:

• Based on the personal name of the enterpreneur;
• Based on the type of business;
• Based on the aim of the establishment.

In case the name of the company, are prohibited from using the company name that already exists and is used first, although there is little difference.

In Indonesia there is no legislation governing the company’s name; Anyone who violates the rights to the name of the company that has been owned and used by other employers threatened with legal sanctions for committing fraud or violating the rights of others;
Eradication can be done by Article 1365 of the Civil Code (unlawful act) and Article 393 Penal Code (fraudulent).

3. PUBLISHED TO THE COURT

• Ratification of the company name starts since he made the deed in front of a notary;
• Published in Berita Negara

4. For Limited Liability Company or Perseroan Terbatas (Indonesian name), must get legality of Law Ministry.

—–> no need explanation

5. GET BUSINESS LICENSE / SIUP (Surat Izin Usaha Perdagangan)

SIUP / Business License is the identity used by the company or companies to conduct their business legally.

Regulated by:

• Permendag Number. 36/M-Dag/PER/9/2007
• Permendag Number. 46/M-DAG/PER/9/2009
• Permendag Number 39/M-DAG/PER/12/2011
• Permendag Number. 77/M-DAG/PER/12/2013

There are 4 kind of Business License: MIKRO SIUP, SMALL SIUP, MIDDLE SIUP and BIG SIUP. Below the differences between them:

NO	DIFFERENTIATOR	MIKRO SIUP	SMALL SIUP	MIDDLE SIUP	BIG SIUP
1	Capital	Under 50juta	50million-500million	500million-10billion	Above 10 Billion
2	Form Colour	Green	White	Blue	Yellow
3	Submitted to	Suku Dinas Perindustrian & Perdagangan	Suku Dinas Perindustrian & Perdagangan	Suku Dinas Perindustrian & Perdagangan	Dinas Perindustrian & Perdagangan
4	Place of Submitted	District/City	District/City	District/City	Province
5	the official signature	Regent / Mayor	Regent / Mayor	Regent / Mayor	Governor

PROCEDURES FOR SUBMITTING BUSINESS LICENSE (SIUP):

• The applicant must fill out and sign an application for a license by attaching documents;
• A copy of the deed of incorporation of a business entity and a copy of the attestation dariDepartemen of Justice for a business entity with legal status;
• A copy of the deed of effort made in front of a notary who has been registered in the District Court for the enterprise in the form of the partnership;
• Copies of the location permit from the local government where the business entity is established
• A copy of the identity card owner / responsible entity are asking permission;
• Photo of owner / responsible entity are asking permission
• A copy of the proof of payment of the guarantee and the administrative costs of business entities

6. GET SIGN OF COMPANY REGISTRATION / TDP (TANDA DAFTAR PERUSAHAAN)

List is a list of official record is held by or under this Act or its implementing regulations, and contains things that are required to be registered by every company and approved by the competent authorities of the registration office of the company;

List of ingredients aimed to record information accurately and correctly made of an enterprise and is a source of official information for all interested parties about the identity, data, and other information on companies listed in the Company Register in order to ensure business certainty.

Company Registration (TDP) is proof that a company or business entity has been doing his duty to register the company in the Register of Companies. The obligation to register in the Register of Companies regulated in Law No. 3 1982 On Mandatory List of Companies, particularly Article 5. According to the article, “Every company shall be registered in the Company”. Registration must be done by the owner or director of the company, or may be delegated to another person with power of attorney. TDP acquired Integrated Licensing Service Agency.

7.BRAND REGISTRATION / INTELLECTUAL PROPERTY RIGHTS REGISTRATION (NOT MANDATORY)

žBrand is one of Intellectual Property Rights (IPR) on the side of Copyright, Patent, Industrial Design, Layout Design of Integrated Circuits. IPR is the right to enjoy the results of human intellectual creativity economically. Therefore, the objects are set in IPR is the work arising or born of human intellectual abilities.

There are 7 kind of Intellectual property Rights:

• Copyright;
• Patent;
• Trademark;
• Industry Design;
• Trade secret;
• Integrated Circuit Layout Design;
• Protection of Plant Varieties.

COPYRIGHTS is Exclusive rights for the creator or the right to publish or multiply the creation (in the field of science, art, literature) or give permission for it with not reduce  according to law.

PATENT is The exclusive rights granted by the state to an inventor for his invention in the field of technology.

INDUSTRY DESIGN is the creation of shapes, configurations. Composition, color composition of lines or a combination of all things mentioned above that 3 or 2 dimensional shape which gives aesthetic impression. Duration of protection: 10 yrs)

INTEGRATED CIRCUIT LAYOUT DESIGN is Exclusive rights given code designer for his creation in the form of three-dimensional layout design of various elements, at least one of elemen2 is active as well as part or all of the interconnections in integrated circuits and the laying of three dimensions is intended for preparation of integrated circuit manufacturing.

TRADE SECRET is Information which is not known by the public in the field of technology / or business and have economic value. Duration: as long as the secret yet open.

PROTECTION OF PLANT VARIETIES  that produced by the plant breeder through plant breeding activities include new plant variety / unique. The term of protection of 20 until 25 yrs.

TRADEMARK is  the sign in the form of images, names, words, letters, numbers, color composition or a combination of these elements that have a distinguishing element that can be used to trade goods or services (Article 1 paragraph 1 of Law number 15 of 2001. There are 3 kind of trademark:

• Trademark of goods is a brand used on goods traded by a person or how many people together or a legal entity to differentiate with other similar items.
• Trademark of services is a brand that is used for services traded by a person or persons jointly or a legal entity to differentiate with other similar services.
• Collective Brands is a brand that is used on the goods and / or services with the same characteristics that are traded by a person or persons jointly or a legal entity to distinguish with goods and / or other similar services.

And there are 4 form of trademark:

• Image Brand;

• Words Brand;

• Number/Letter Brand

• Combination Brand

Brands that can not be registered / to be rejected:

• Contrary to morality or public order;
• No distinguishing features;
• Has become public property;
• Have similarity in principle or in its entirety with other brands already registered or famous For goods / services are similar;
• Imitation or resembles the name or abbreviation of a name, sign, seal, official seal, flag, emblem or symbol / appendage state or national or international entities;

Terms and procedures for trademark application:

• žRequest; submitted in writing in Indonesian to the Director General of Intellectual Property Rights by the applicant or the power to attach proof of payment of registration fee brand.
• žExamination; examination of requirements for registration will be conducted by the Director General.
• žAnnouncement; at the request of the Director General, the application will be announced in the Official Gazette of Marks.

Where is place for trademark registration:

National scope: Direktorat Jenderal Hak atas Kekayaan Intellektual. Indonesia.

International scope: World Intellectual Property Organization (WIPO), Geneva, Swiss.

8. GET TAX ID NUMBER / NPWP (NOMOR POKOK WAJIB PAJAK)

Tax is the transition of wealth from the private sector to the public sector under laws which can be enforced by not obtaining the benefits are directly intended to finance public expenditure and are used as a means of driving, obstacle or deterrent to achieve goals that are outside the field state finances (Rochmat Soemitro).

Tax laws also called fiscal law are: the whole of the regulations covering government authority to take a man’s wealth and hand it back to the community through the state treasury, so he is part of the public law governing the legal relations between the state and people persons or entities (legal) who is liable to pay the tax (taxpayer)

NPWP is a number given to the taxpayer as a means of identification or identity for each taxpayer in exercising its rights and obligation. NPWP function is as a means of tax administration, the identity of the taxpayer, and the requirements for a number of public services.

Requirement of making NPWP:

For Oriented Enterprises Profit (Profit-Oriented)

For the taxpayer, including a permanent establishment and the contractor and / or operators in the field of upstream oil and gas oriented to profit (profit), NPWP registration requirements are:

• Photocopy of the deed or document of establishment and the changes to the corporate taxpayer in the country, or a letter of appointment from the central office to the permanent establishment.
• Tax ID Card Copy one of the administrators, or a photocopy of the passport and certificate of residence of Local Government Officials minimal Lurah or Kepala Desa if the person in charge of foreign citizens.
• Photocopies of documents business license and / or activity issued by the competent authority or a certificate of business activities of Local Government Officials minimal Lurah or Kepala Desa or proof of payment of electricity.