How to Get NIB and Business Permits on OSS Indonesia for Foreigners

Foreigners can obtain a Business Identification Number (NIB) and permits in Indonesia by establishing a PT PMA (foreign-owned company) and registering through the OSS-RBA system at oss.go.id. Key steps include obtaining a passport/local tax number (NPWP), setting up the company, selecting the correct KBLI code, and submitting data to secure the NIB and risk-based licenses.

OSS (Online Single Submission)

OSS (Online Single Submission) is the gateway for all companies applying for business permits in Indonesia, whether local companies (PT PMDN) or foreign investment companies (PT PMA). Companies involved in sectors such as finance, mining, oil and gas are also included.

Since OSS is now the sole gateway, the process is handled by a specific government agency. According to Article 1, Point 11 of Government Regulation Number 24 of 2018 (PP 24/2018) on Integrated Business Licensing Services, OSS is a government institution that coordinates investment matters.

As stated in the same regulation, OSS issues business permits electronically on behalf of ministers, heads of agencies, governors, or mayors.

To obtain a business license via OSS, you first need to register for a Business Identification Number (NIB), which serves as your company’s unique identifier.

The NIB is a major breakthrough in business licensing in Indonesia, as it functions not only as an identification number but also as the Company Registration Certificate (TDP), Importer Identification Number (API), and customs access.

Key information included in the NIB:

• Company Name
• Company Address
• Taxpayer Identification Number (NPWP)
• Telephone Number
• Fax Number
• Email
• KBLI Name (Indonesian Business Classification)
• KBLI Code
• API Type
• API Code
• Investment Status

To get an NIB, foreign investors must register on the OSS platform. After logging in, you will be required to provide the necessary data. For individuals, the required information includes:

• Name and National ID
• Residential Address
• Business Sector
• Investment Location
• Planned Investment Size
• Labor Usage Plan
• Contact Number
• Tax Facilities and Other Facility Requests
• Personal NPWP

For non-individual entities (companies), the required information includes:

• Company’s name and/or establishment registration number
• Business Sector
• Type of Investment
• Country of Origin of Investment (if foreign investment)
• Investment Location
• Planned Investment Size
• Labor Usage Plan
• Business Contact Number
• Tax and Other Facility Requests
• Non-individual NPWP
• Responsible Person’s National ID

After obtaining the NIB, the next step is to acquire your business and operational permits, including fulfilling any commercial license requirements.

Steps to Get NIB and Business Permits (OSS-RBA)

1. Establish a Foreign Company (PT PMA)

Foreign investors cannot operate as individuals in Indonesia. They must establish a PT PMA (Foreign-Owned Limited Liability Company) to legally engage in business activities. This company structure allows full foreign ownership in specific sectors, subject to government regulations.

2. Prepare Documentation

Before registering, gather all necessary documents, including:

• Passport of the foreign investor
• NPWP (Taxpayer Identification Number) of the business
• Deed of Establishment for your company, prepared by a notary

3. Register on OSS-RBA System

Create an account on the OSS-RBA website (oss.go.id) using your passport number. This is where you will submit all company data and complete your registration.

4. Enter Company Details

Provide essential company details, such as:

• Business address
• Capital structure
• Shareholder details

5. Select the KBLI Code

Choose the KBLI (Indonesian Standard Classification of Business Fields) code that best describes your business activities.

The choice of KBLI code will determine the risk category and associated requirements for your business. It’s crucial to select the most accurate and updated KBLI code to ensure compliance.

Understanding Risk-Based Licensing

In line with the Cipta Kerja Law and PP 5/2021, the OSS-RBA system uses a risk-based approach to categorize businesses based on their activities’ potential environmental, economic, and social risks. The risk classification influences the type of permits required.

• Low Risk: Businesses only need to obtain an NIB.
• Medium-Low Risk: Requires an NIB and a Standard Certificate, which confirms compliance with basic standards.
• Medium-High Risk: Requires an NIB and a Standard Certificate issued by the central or regional government.
• High Risk: Requires an NIB, relevant permits, and a Standard Certificate if necessary.

Risk Levels Based on Business Scale

The system also categorizes businesses based on their scale:

• Micro Enterprises: Maximum capital of IDR 1 billion or annual sales up to IDR 2 billion.
• Small Enterprises: Capital between IDR 1 billion and IDR 5 billion, or annual sales between IDR 2 billion and IDR 5 billion.
• Medium Enterprises: Capital between IDR 5 billion and IDR 10 billion, or annual sales between IDR 5 billion and IDR 50 billion.
• Large Enterprises: Capital exceeding IDR 10 billion or annual sales above IDR 50 billion.

These classifications are essential when applying for business permits, as the OSS system determines which permits are necessary based on the risk category associated with your KBLI code.

Tips for Smooth Registration

To ensure a smooth registration process, consider the following:

1. Ensure Validity of the Data

• ID Number and KSWP (Tax Status Confirmation) must be valid. If there are discrepancies in your personal information (e.g., mismatch between KTP (ID card) and NPWP (Tax Number)), your registration will be delayed.
• KSWP: Ensure your tax status is up-to-date. If it’s invalid, you must update your tax records.

2. Use the Latest KBLI Code

The KBLI code determines the risk level for your business. It’s vital to use the most up-to-date KBLI, as incorrect or outdated codes may delay the process. The latest KBLI 2020 is crucial for categorizing your business field accurately.

3. Verify Your Business Location

The location of your business must comply with the Rencana Detail Tata Ruang (RDTR) or Spatial Planning regulations of the region. For example, in Bali, certain areas are designated for specific business activities. If your location doesn’t match the RDTR zone, your registration will be delayed.

4. Email Address for Verification

Ensure that your company email address is active and accessible, as it will be used to verify your business registration.

Additional Requirements for Specific Business Activities

When establishing a business in Indonesia, depending on the type of business and its location, additional regulatory requirements may need to be met to ensure compliance with environmental and zoning laws.

These additional requirements aim to minimize any negative impacts on the environment and ensure that businesses are operating in appropriate zones according to local regulations. Below is a more detailed explanation of the key requirements:

1. Environmental Impact Assessments (AMDAL)

An AMDAL (Analisis Mengenai Dampak Lingkungan) or Environmental Impact Assessment (EIA) is a detailed study and assessment process used to evaluate the potential environmental impacts of a project or business operation.

It is typically required for businesses with activities that could have a significant impact on the environment, such as large-scale industrial operations, construction projects, mining, or projects that involve large amounts of waste or emissions.

When is an AMDAL Required?

• For businesses with significant environmental risks, such as factories, mining operations, and large-scale development projects (e.g., large resorts or real estate projects).
• AMDAL is required if the proposed business involves activities such as water pollution, air pollution, and deforestation, or if it will significantly affect natural habitats and ecosystems.

Key Elements of AMDAL:

• Environmental Scoping: A preliminary review to determine the level of impact a project might have.
• Environmental Impact Assessment (EIA): A comprehensive report detailing potential negative effects, mitigation plans, and proposed measures to reduce impact.
• Environmental Management and Monitoring Plans: Strategies for reducing negative effects and monitoring environmental health over time.

If your business is expected to have substantial environmental impacts, the AMDAL process will be a legal requirement before the business can operate.

2. Environmental Management and Monitoring (UKL-UPL)

The UKL-UPL (Upaya Pengelolaan Lingkungan – Upaya Pemantauan Lingkungan) is a more basic form of environmental assessment used for businesses with a lower level of environmental impact compared to those that require an AMDAL.

The UKL-UPL is designed for smaller-scale projects or activities that do not significantly affect the environment but still require monitoring and management to prevent potential harm.

When is UKL-UPL Required?

• For businesses with a moderate environmental impact, such as small manufacturing units, retail businesses, and other operations with a potential but limited environmental footprint.
• Activities like small-scale construction, hotel developments, and restaurant operations may require UKL-UPL, particularly if they are located in areas where environmental protection is a concern.

Key Elements of UKL-UPL:

• Environmental Management: A plan for handling and mitigating any potential environmental impacts from the business operations.
• Environmental Monitoring: A system to regularly monitor environmental conditions to ensure the business stays within the limits of acceptable environmental impact.

For example, businesses like restaurants or retail outlets in specific areas may not require a full AMDAL but instead would need to implement environmental management practices that address waste disposal, energy consumption, and noise pollution.

3. Location Permits (IMB)

An IMB (Izin Mendirikan Bangunan) or Building Permit is required for businesses involved in construction or renovation of buildings.

The IMB is necessary to ensure that the construction complies with local zoning and safety regulations, including the design, size, and purpose of the building.

When is an IMB Required?

• Construction of new buildings (e.g., offices, factories, or retail spaces).
• Renovations or expansions that significantly change the structure or use of a building.
• Change of building function (e.g., from residential to commercial).

The IMB must be obtained before beginning any construction or renovation work to avoid legal issues and ensure the project complies with local regulations (including fire safety, structural integrity, and building accessibility).

4. Environmental Permits

Certain businesses may also require specific environmental permits that are tailored to their operational activities. These permits are needed if the business is likely to have direct environmental impacts (such as waste generation, emissions, or pollution).

When are Environmental Permits Required?

• For businesses in industries such as mining, chemical manufacturing, and heavy industry.
• Waste disposal permits for companies involved in handling hazardous materials or waste.
• Air quality permits for businesses emitting pollutants.
• Water use permits for industries using large volumes of water.

5. SPPL (Surat Pernyataan Kesanggupan Pengelolaan Lingkungan)

A SPPL (Environmental Management Commitment Letter) is a declaration made by businesses that do not require an AMDAL or UKL-UPL but still commit to managing their environmental impact.

This document is used by businesses that may have a minimal environmental impact, such as small retail businesses, and it ensures that the business adheres to basic environmental management standards.

When is SPPL Required?

• Small businesses in sectors like retail, restaurants, or services that do not require more detailed environmental assessments (AMDAL or UKL-UPL).
• In certain areas, particularly in Jakarta, where the local regulations may require even small businesses like restaurants or cafes to submit an SPPL for proper waste and environmental management.

Local Regulations and Compliance

In Indonesia, environmental and zoning regulations can vary by region, so businesses must consult with local authorities (especially in major cities like Jakarta or Bali) to determine if additional permits are required.

For example, while a small café may need only an SPPL in Jakarta, in other regions, a more detailed UKL-UPL or AMDAL may be required based on the location’s environmental sensitivity.

Final Thoughts

Obtaining an NIB and business permits in Indonesia can be a complex process, but the OSS-RBA system has streamlined it considerably.

By following the steps outlined above and ensuring compliance with the latest regulations, foreign investors can set up their businesses with ease.

If you’re unsure about the process or need assistance, Visa BaliEasy can help guide you through the PT PMA setup, NIB registration, assistance with applying for Investor KITAS, and any business permits you may need.

With our 24/7 support, clear pricing, and local expertise, we can make your business setup in Indonesia smooth and hassle-free.

Ready to start your business? Contact Visa BaliEasy today for personalized support!