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29 June 2020 (closed)
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The issuance of an Industrial Business License was previously regulated in government regulation number 13 of 1995. Recently the Indonesian Government has set new provisions regarding the arrangement of an industry business license in Government Regulation number 107 of 2015 on Industrial Business Licenses (New Regulation). The New Regulation sets the guidelines and procedures for securing the business license for industry companies. In this column we discuss the main procedures regulated by the New Regulation.
Types of Industrial Business Licenses
An industrial business license is usually referred to as IUI (Izin Usaha Industri). Generally there are three types of IUI, namely:
- IUI for small businesses
- IUI for medium businesses
- IUI for large businesses
Securing an Industrial Business License
An IUI is generally granted to businesses that are located in industrial areas. There are however several exceptions to this general rule. The Government can decide to issue an IUI to businesses that do not have their business locations in industrial areas in case:
- The business location is in a region or city which does not have an industrial area
- The business location is in a region or city, in case the industrial area is already full
- The IUI for small or medium business does not harm the environment
- The business uses special materials or the business requires a special location
Once the company meets one of the above location requirements, it can apply for the Industry Business License. Such license is valid as long as the company conducts its business activities based on the license.
Expansion of Industrial Business License
In case industrial companies wish to expand their business license, they require to secure a expansion license. Moreover in case the expansion includes utilization of natural resources, the company needs to conduct an environmental audit in order to check the impact of the business activities on the environment.
This column is provided by PNB Law Firm Jakarta