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In Indonesia, business licenses play a crucial role in pursuing legal compliance and performing smooth business operations. More than being the legal right to conduct business, a license can protect companies from potential regulation risks. Receiving the proper license can be straightforward or less complex, depending on the industry involved and the size of the operation.
In this article, we look at the different kinds of business licenses available in Indonesia, covering some legal processes, regulation, and requirements pertinent to each.
Key Takeaways:
- More than being the legal right to conduct business, a license can protect companies from potential regulation risks.
- Receiving the proper license can be straightforward or less complex, depending on the industry involved and the size of the operation.
- In accordance with Article 1, Point 20 of Law No. 28 of 2014 concerning Copyright, license is defined as the written permit given by the Copyright Holder or Related Rights Owner to another Party with the purpose of exercising the economic rights over the work created or the related products produced under certain conditions.
Definition of Business License According to Indonesian Law

The term “license” carries various meanings under Indonesian legal frameworks, depending on the kind of intellectual property or business activities that it is regulating. These definitions are outlined in a number of key legislative texts.
In accordance with Article 1, Point 20 of Law No. 28 of 2014 concerning Copyright, license is defined as the written permit given by the Copyright Holder or Related Rights Owner to another Party with the purpose of exercising the economic rights over the work created or the related products produced under certain conditions.
Article 1, Point 11 of Law No. 13 of 2016 on Patents (UU Paten), which defines license as an authorization given by the Patent Holder, either exclusive or non-exclusive, through a written agreement to the licensee for the use of a protected patent within a certain period and under specific terms.
According to Law No. 20 of 2016 on Trademarks and Geographical Indications, licensing is defined as permission to use a registered trademark given by the registered owner of a trademark to another party through a written agreement according to statutory regulations.
Article 1, Point 5 of Law No. 30 of 2000 on Trade Secrets defines a license as the permit granted by the holder of Trade Secret Rights to another party through an agreement in writing to enjoy the economic benefits derived from a protected trade secret for a certain period and under specific conditions without transferring ownership rights.
Key Types of Business Licenses in Indonesia
Business licenses in Indonesia fall into various categories, all of which generally serve to regulate and ensure that the operation of companies falls within the legal framework. While some licenses apply to all businesses, some apply to certain industries, making sure the sector regulations are complied with.
Below are a few of the key licenses that you may need to obtain for your business, depending on the nature of your business.
Primary Business Licenses
Main business licenses represent basic licensure that shall be obtained for the conduction of businesses in different industries. Business licenses are necessary and, generally, come under three categories, depending on the industry the respective business operates within:
General Business License (Nomor Induk Berusaha or NIB)
General Business License, or Indonesian acronym NIB, stands for Nomor Induk Berusaha and is an important legal obligation for almost all businesses in Indonesia. It is a single business identifier that empowers a corporation to perform business activities such as trading, consultancy services, and other business enterprises. The NIB is a multipurpose license that enables the business to satisfy all kinds of regulatory needs, including tax registration and compliance with the workforce.
Industrial Business License
The IUI or Izin Usaha Industri, Industrial Business License, shall be required of all those entities engaged in manufacturing and production. Firms engaged in processing, assembly, and fabrication should obtain this license to ensure compliance with minimum safety, quality, and environmental standards. This is a must for businesses to prove that they are complying with government regulations concerning industrial practices.
License of the Business in Construction (Sertifikat Badan Usaha or SBU)
Businesses involved in the construction industry have to obtain a SBU. The license regulates companies operating their activities in infrastructure, building construction, and any other relevant areas. The SBU enforces the agencies of construction to follow standardized regulations competently enough for safety measures to enable them to maintain quality standards when executing the projects.
Secondary Licenses of Business
Secondary or non-primary licenses refer to the field-related permits that various business industries must have, which relate to public services or whose products are controlled. Such licenses are meant to verify safety, hygiene, as well as other standards relevant to the particular industry to which a business belongs.
Restaurant License
A Restaurant License is one of the important licenses restaurants have to deal with in the food and beverage industry. For such a license, the standards of food safety and hygiene to maintain the quality of service to the end consumers must be adhered to. The license is important to ensure customer health and allow prevailing health requirements.
Hotel License
An accommodation provider needs a Hotel License, which may be Hotels, Resorts, and other similar establishments. The license covers some of the most important requirements concerning the offered hospitality service: cleanliness, safety, and security rules. It is the official way of assuring that the business meets government-imposed standards for the conduct of a safe and comfortable experience for guests.
Transportation License
A Transportation License is required for companies engaged in the transport sector. This is a very crucial license for transport business service providers, as it regulates issues to do with safety in respect of the vehicle itself, maintenance standards that have to be observed, and adherence to transportation laws. It also greatly helps in trusted services by increasing the credibility of services rendered to the public.
Also read: Navigating Indonesia’s Trading License Requirements
Licensing Categories Based on Requirements

In Indonesia, business licenses are based on the commitment that has to be fulfilled for a particular group. Mainly, there exist two groups:
Business Licenses without Obligation Fulfilment
These are issued instantly by the OSS system without further obligations. Typical examples include consulting firms.
Business Licenses with Technical Requirements
These require additional technical documents to be submitted prior to issuance. The sectors that usually fall under this category include hotels and importers of medical devices.
Business License with Fee Requirements
Besides the technical requirements, this license requires the payment of certain fees.
Business License that Requires Both Technical and Fee Requirements
Licenses that require the submission of technical documentation and the payment of relevant fees. Examples for these sectors are the construction and financial services sector.
How to Get Business License in Indonesia
Starting a business in Indonesia will require just a few critical steps that will make your company legally registered and licensed. A breakdown in this regard is provided below:
Registration of Company
Your first step should be to register the company with the Ministry of Law and Human Rights through the submission of the Articles of Association, providing a structural overview of your company, stating its purpose of setup, and stating who the key members are. When this has been approved, it deems your company to be a legally recognized entity.
NIB Application
Next, you apply for your NIB after registering with MOLHR, also known as your Business Identification Number. You do this through the OSS, an integrated system providing access through the web to the permit processes for business and investment. The NIB will be your single identity number, while at the same time it legalizes your business.
Specific License Application
Whichever the case may be, depending on the type of your business, you will have to apply for further licenses concerning the particular industry you operate within. For instance, if you are into trading or manufacturing, you will also have to get all the required permits for trading and manufacturing, respectively. The OSS system will direct you concerning what licenses apply to your business category.
Submission of Documents
In the process, you are expected to provide a number of documents in support of your application. These commonly include:
- Your company’s Articles of Association
- Proof of domicile for the business, most of which is usually the office leasing or registration documents
- Identification documents for the directors and shareholders of the company
Inspection and Approval
After all documents are submitted, the OSS system will review your application. If there is nothing wrong, they might ask for complementary information. Once the conditions are met and the review process has been completed, your business license will be issued, and you can legally operate your business in Indonesia.
Business License Registration in Indonesia with Viettonkin
Such would be the conclusion, and it would also be observed that business licensing, as a process in Indonesia, may sound complicated, but once the right steps are followed, the process would go in an upbeat manner. Company registration to industry-based licenses-the steps will keep your business on track, operating within the legal and efficient boundaries.
If you are feeling overwhelmed or even unsure about how to work your way through the system, then Viettonkin Consulting is here to help you. Drawing from our experience of supporting businesses across a wide range of sectors, we are able to guide you through the legal and administrative requirements and ensure a smooth path to getting your business up and running in Indonesia.
Contact us today for expert advice and support. Follow this link to discover more about how we can serve your business.
Read More: Exploring the Challenges of Doing a Business in Indonesia