Business License (Izin Usaha)

Under the Investment Coordinating Board (Badan Koordinasi Penanaman Modal BKPM)
Regulation No. 5 of 2013 as amended with BKPM Regulation No. 12 of 2013 on Guidelines and
Procedures for Licensing and Non-licensing concerning Capital Investment (hereinafter referred to as
BKPM Regulation No. 5), Foreign Capital Investment (Penanaman Modal Asing PMA) or
Domestic Capital Investment (Penanaman Modal Dalam Negeri PMDN) companies which has
already obtained a Principle License (Izin Prinsip) and is ready to start its business operation are
required to obtain a Business License respective to its sector of line of business.1
Business Licenses shall be valid so long as the company is still in operation, unless otherwise
regulated by other regulations.2
Documents required to be attached to the application of a Business License3:
1. Copy of Principle License;
2. Copy of Deed of Establishment;
3. Copy of legal documents relevant to the companys project location and/or companys
address;
4. Copy of regional licenses and/or permits;
5. Copy of environmental licenses and/or permits;
6. As applicable, field report for certain line of businesses;
7. Receipt note of Investment Activity Report submission and the latest of such report;
8. As applicable, recommendation from relevant institution;
Approval/Rejection shall be issued no later than 7 workdays after the application is submitted, with
the relevant nomenclature4 of such license in respect with the sectoral institution.

Business License Changes and Expansions

a. Business Expansion5
PMA/PMDN companies that are planning to conduct business expansion are required to obtain a
Principle License for Expansion. The expansion itself is regulated specifically in BKPM Regulation
No. 5, as follows:
1. For industrial companies6: The increase of production capacity which exceeds 30% from the
allowed production capacity limit of a similar product, and is being conducted in the same
project location.
2. For non-industrial companies7: the addition of line of business or the increase of production
capacity which exceeds the production capacity limit, regardless it is being done in the same
location or in a different location from the previous project location.
1

Article 31 (1), (2) BKPM Regulation No. 5

Article 31 (11) BKPM Regulation No. 5
3
Article 32 BKPM Regulation No. 5
4
Article 33 BKPM Regulation No. 5
5
Article 38 BKPM Regulation No. 5
6
Article 1 paragraph 13 BKPM Regulation No. 5
2

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In the event that a PMA/PMDN company has already obtained Principle License for Expansion and
are ready to start the realization of the expansion operation, it will be required to obtain a Business
License for Expansion.8
Such license shall be valid so long as the company is still in operation.
The documents required to be attached to the application and the procedure thereof, are similar to the
requirements as stated above for the application of Business License, however, the document
requirement of a copy of the Principle License is not applicable, rather, the Principle License for
Expansion is applicable for such application.

b. Business License of Change9

PMA/PMDN Companies which are intending to make a change to its business operation as initially
contained in its Business License or Business License for Expansion, which are as follows:
1. Change of the project location;
2. Changes to the business activity, which are: (i) product diversification without addition of
machine/investment and is still in the same line of business based on the Standard
Classification of Business Field (Klasifikasi Baku Lapangan Usaha Indonesia KBLI)
code scope; or (ii) incongruity between the production capacity stated in the companys
license and the production capacity realization; and/or (iii) marketing and export value per
year;
3. The validity period of the Business License.
PMA/PMDN Companies that has already obtained a Principle License of Change which intended to
change the companys project location are required to file an application for the Business License of
Change in relation with the change of project location within 1 year after obtaining such principle
license.
However, if the company has already completed the requirements to file an application to change the
project location, it may directly file the application for Business License of Change without having to
file an application for the Principle License of Change.

Business License for Merger

In the event that 2 PMA/PMDN companies are intending to conduct a merger, the surviving company
must obtain the Business License for Merger.

Article 1 paragraph 14 BKPM Regulation No. 5

Article 43 BKPM Regulation No. 5
9
Article 46 BKPM Regulation No. 5
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