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22 June 2017 (closed)
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Recently, the Ministry of Trade issued Regulation number 7/M-DAG/PER/2/2017 (Regulation 2017), which is the third amendment of Regulation number No. 36/M-DAG/PER/9/2007 on Trade Business Licenses (Regulation 2007). Regulation 2017 is another effort of the Trade Ministry to simplify licensing procedures, focusing in this regulation on Trade Business Licenses (surat izin usaha perdagangan or SIUP). In our previous column we discussed the simplified procedure of the Company Registration Certificate (tanda daftar perusahaan or TDP). In this column we discuss the repealed SIUP re-registration procedure based on the new regulation.
Companies Which Require a Trade Business Licenses
Any business in the trade sector can engage in trading activities after they have secured a SIUP. There are however exceptions to this general rule. Business do not require a trade business license in case:
- the companies are branch offices or representative offices. In the latter case, the representative office requires a specific trade representative office license; and/or
- the companies are holding maximum IDR 50 million of assets.
Validity Period of SIUP and Re-Registration Requirement
Prior to the issuance of Regulation 2017, a SIUP was valid for as long a business remained in operation. However, the business was required to re-register the SIUP every five years. The Regulation 2017 now removes this re-registration requirement. In line with this removal, the Regulation 2017 also removes related provisions, such as the sanctions provisions on non-compliance with the re-registration requirement.
The Regulation 2017, in combination with Ministry of Trade issued Regulation number 8/M-DAG/PER/2/2017 on the Arrangement of the Company Registration, will ease the burdens placed upon trading businesses. The simplified procedures for re-registration of Company Registration Certificate (TDP) and the repeal of the obligation for such businesses to re-register their SIUP is a promising step towards a more investor-friendly business climate.
The Regulation 2017 has been in force since February 22, 2017.
This column is provided by PNB Law Firm Jakarta