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Legal Updates | Indonesia Takes Steps to Ease Licensing Process for Trade Companies

The Indonesian Ministry of Trade (“MOT”) has issued two regulations with the goal of simplifying the licensing process for companies and reducing the amount of time they must spend on such matters.

MOT Regulation No. 7/M-DAG/PER/2/2017 regarding the Third Amendment to MOT Regulation No. 36/M-DAG/PER/9/2007 regarding the Issuance of Trade Business License (“MOT Reg. 7/2017”) repeals the obligation for companies to re-register their Trade Business License (Surat Izin Usaha Perdagangan or “SIUP”). And MOT Regulation No. 8/M-DAG/PER/2/2017 regarding Company Registration Implementation (“MOT Reg. 8/2017”) seeks to simplify the process for renewing a Company Registration Certificate (Tanda Daftar Perusahaan or “TDP”). Both regulations have been in effect since January 22, 2017, and apply to all existing business entities.

Removal of SIUP Re-Registration

A SIUP license allows a business entity to engage in the trading business, such as selling and purchasing goods or services, or any transaction involving the transfer of ownership over goods or services. Previously, a business entity had to re-register its SIUP every five years, a requirement removed by MOT Reg. 7/2017. Now, once a business entity obtains a SIUP, the license will remain valid as long as the business entity engages in trading activities. The new regulation also stipulates that no fees shall be charged to businesses applying for a new SIUP, amending an existing SIUP or replacing a lost or damaged SIUP.

Simplified TDP Renewal

Every business entity that is located and operates in Indonesia must register with the Company Registration Office and receive a TDP. A TDP is valid for five years and must be renewed at least three months before its expiration date.

MOT Reg. 8/2017 seeks to simplify the TDP renewal process by requiring that applicants just submit a notification letter attaching a copy of the previous TDP to the relevant Company Registration Office, either in electronic format or manually. Within three working days as of the submission, the Company Registration Office shall issue the new TDP. In the event the TDP is not issued within three working days, the previous TDP is deemed applicable and renewed.

MOT Reg. 8/2017 stipulates that TDP renewal is free of charge.

SSEK - 1st august 2017

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Indonesia Snapshot

Capital: Jakarta
Population: 259 million (2016)
Currency: Indonesian Rupiah
Nominal GDP: $936 billion USD (IMF, 2016)
GDP Per Capita: $3,620 USD at Current Prices (IMF, 2016)
GDP Growth: 5.0% (2016)
External Debt: 36.80% of GDP (BI, Q2 2016)
Ease of Doing Business: 91/190 (WB, 2017)
Corruption Index: 90/176 (TI, 2016)