27 March 2020 (closed)
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A Trading Company in most cases needs a Trading License (SIUP) to perform trading activities in Indonesia. The Trading Company must be permanent, continuous, established, working and domiciled in the territory of the Republic of Indonesia, for the purpose of making profit. Generally, activities in the trade sector can be described as a business activity related to the transaction of goods or services, such as sales and purchase and lease conducted with the aim of transfer of title to goods or services with accompanying rewards or compensation.
Trading Company Types in Indonesia Based on Trading License (SIUP)
There are four types of Trading Companies:
1. A micro Trading Company, which holds a Trading License for micro sized businesses (SIUP Micro) which fulfill the following requirements:
a) sole proprietorship or partnership;
b) the business activities are managed, operated, or maintained by its owner or family members/close relatives; and
c) a net worth of less than 50 million rupiah, excluding land and buildings.
2. A small Trading Company, which holds a Trading License for small sized businesses (SIUP Kecil) with a net worth of more than 50 million rupiah but not more than 500 million rupiah, excluding land and buildings.
3. A medium Trading Company, which holds a Trading License for medium sized businesses (SIUP Menengah) with a net worth of more than 500 million rupiah but not more than 10 billion rupiah, excluding land and buildings.
4. A big Trading Company, which holds a Trading License for large sized businesses (SIUP Besar) with a net worth of more than 10 billion rupiah, excluding land and buildings.
Based on article 2 of the Ministry of Trade Regulation number 36/M-DAG/PER/9/2007 regarding the Issuance of Trading Business License, as amended by Ministry of Trade Regulations number 46/M-DAG/PER/9/2009 and 39/M-DAG/PER/12/2011, a small, medium and large sized Trading Company must obtain a Trading License (SIUP). Only if requested by the related government body a micro sized trading company requires a Trading License.
A Trading License remains valid for as long the Trading Company keeps carrying on its business activities, and must be extended every five years.
Trading Company that does not Require a Trading License
The following companies do not require a Trading License:
1. Companies that perform activities outside the trading sector;
2. Branch offices, which are defined by the Trade Regulation as units of the parent company, which can be located in different places and can be independent or be assigned by the mother company to carry out certain tasks;
3. Representative offices, which are defined by the Trade Regulation as companies which are acting on behalf of their corporate headquarters to perform an activity and/or is managed in accordance with granted authority.
This column is provided by PNB Law Firm