May 2021

  A joint venture Indonesia (JV) combines two or more businesses’ expertise and resources to reach particular goals or pursue specific projects. The joint venture is not only combining different resources but also shares its rewards and risks. Since it is a big decision, many considerations involve before entering into a joint venture Indonesia.   Things Need to Consider before Setting up a Joint Venture It is easier to start a new joint venture company in Indonesia than buying shares in an existing one. Other Things you need to consider while setting up a joint venture in Indonesia are as follow:   1. Determine the Business Sector First of all, it is vital to determine the business sector of Indonesian joint ventures. It is because not all sectors are open to foreign ownership.   2. Negative Investment List and Foreign Ownership Under the Negative Investment List (DNI), regulate the maximum percentage of foreign ownership. This list keeps updated from time to time.   3. Determine the Locations After determined the joint venture company’s business sector and foreign ownership, it is also necessary to decide where the JV will operate. This is because certain business sectors do not allow a joint venture to operate in certain Indonesian regions. Therefore, certain business sectors only allow a joint venture to operate in specific regions in Indonesia.   4. Taxation The major taxation matters for a joint venture company are the withholding and income tax payable. In most cases, foreign shareholders are responsible for 20% of the final withholding tax on dividends from an Indonesian joint venture company. Once JV is established, it is always advisable to outsource taxation matters to an expert to ensure compliance and seamless operations in Indonesia.   Types of Joint Venture in Indonesia Before setting up a JV, you need to know about the types of JV in Indonesia. There are two types of joint ventures in Indonesia: corporate JVs and contractual JVs.   Corporate JVs There are two kinds of Corporate JVs which are incorporated JVs and partnerships. An incorporated JV is a legal entity that has limited liability status, commonly referred to as a limited liability company (Perrseroan Terbatas or “PT”). PTs are organized under the Company Law. A partnership is a business entity that does not have limited liability status. Common forms of partnerships in Indonesia include: A firm (firma or venootschap onder firma); A komanditer partnership/association (commanditaire vennotschap or “CV”). The main difference between a firm and a CV lies in the contribution of the partners. In a CV, there are two types of partners, namely active partners, who manage the business of the CV, and passive partners, who merely make capital contributions to the CV. Above all, the liability of a CV’s passive partners is limited to the amount of their capital contribution. In contrast, there are no distinct categories of partners in a firm.   Contractual JVs A contractual JV does not require the establishment of a legal entity since it’s formed by agreement between the JV partners. The typical JV founding documents for a corporate JV are the: Deed of establishment, which contains the entity’s articles of association and a list of the members of the board of directors and board of commissioners, for a limited liability company (PT), or a list of the partners, for a partnership. JV/shareholders’ agreement entered into by the JV partners, which is a private agreement documenting the relationship between the JV partners. The deed of the establishment must be in the form of a notarial deed. A decree from the Ministry of Law and Human Rights (MOLHR) approving the establishment of the PT (MOLHR decree). Want to know more about Joint Venture in Indonesia? Please contact us  

  As the largest and fastest-growing digital economy in Southeast Asia, Indonesia is estimated the gross merchandise value of its digital economy that will grow US$100 billion by 2025. The growth expected is beyond the entire Southeast Asia region that has US$240 billion digital era economy growth in total. Also, There are 75 fintech payment startups and more than 150 fintech lending startups, with 2000 technology startups in total in Indonesia. Despite the COVID-19 pandemic, Indonesia’s digital era economy growth remains strong and has increased. It is increasing 11% to US$44 billion compared to US$40 billion in 2019.   Indonesia’s Rapid Economy Growth: How it can be? Indonesia’s population is the largest in Southeast Asia. Approximately 273.5 million as of 2020 is the reason for the rapid and exciting growth. The increase of mobile phone and internet penetration rate is along with Indonesia’s per capita income growth. Leveraging on this digital economy growth in Indonesia as the way to innovate to deal with the inefficiencies in Indonesia. Inefficiency elimination allows individuals to communicate, purchase, and sell things and perform financial transactions with the application of digital technology, further driving the already rapidly-growing digital sector.   Starting a Business in Indonesia: the Rising Digital Economy of Indonesia Two businesses are flourishing in this digital economy of Indonesia, Fintech, and health-tech. Compared to other sectors in the country, the fintech sector has a relatively high adoption rate. Indonesia has a great alternative to traditional banking in terms of flexibility and convenience through this sector.   Boost The Digital Economy Growth: How initiative? Regulations are not fully matured in this dynamic digital economy in Indonesia yet. Still, the Indonesian government is striving to develop several initiatives to promote the digital economy growth. In addition, these initiatives include creating clear and simplified licensing requirements for digital startups, setting policies for customer protection, establishing a fintech sandbox, and building a code of conduct through the Asosiasi Fintech Indonesia and Asosiasi Fintech Pendanaan Indonesia. The Indonesian government issued GR 71/2019, concerning customer protection and data privacy and customer protection on the implementation of electronic systems and transactions to replace GR 82/2012 on the implementation of electronic systems, electronic transactions, electronic agents, electronic certification, domain name management, and reliability certification institutions. Want to know more about starting a business in Indonesia? Please contact us. Lastly, you can read about how to set up a foreign company in Indonesia.

  Halal Industry Indonesia: What is Halal and Halal Certificate? Halal means there are no Haram ingredients in consumer goods such as food, drugs, and cosmetics. What is Haram, then? Haram is everything that contains pork, lard, animal blood, dead and poisonous animals, and non-haram animals slaughtered without Islamic-Law compliance. Furthermore, to convince customers that a product doesn’t contain any Haram ingredients also permissible to consume, we need a Halal Certificate to prove. As an instrument of the halal industry in Indonesia, Halal Certification declares that the products follow Islamic Law. Indonesian Halal Certificate Issuing Authority The National Body of Halal Assurance (BPJPH) is the highest authority to certify and issue a halal certificate in Indonesia. BPJPH works in coordination with the Indonesian Ulama Council (MUI). As one of the highest authorities on Indonesian Islamic affairs, MUI is in charge of setting up the halal compliance standard and issuing the Halal fatwa. The two major authorities (The Food, Drug, and Cosmetics Assessment Agency (LPPOM) and MUI Fatwa Committee) are responsible for halal assessment, audit, and declaration.   Important Notes on Halal Standard in Indonesia Meanwhile, the halal standard based on MUI’s Fatwa Indonesia is Sharia Law. There are some specific details that companies need to pay attention to: • Firstly, Under Sharia Law, a company cannot associate their brand/product name or insinuate with anything haram. • Also, MUI prohibit packaging, design, and nature of a product (i.e., sensory characteristics) that imitate anything haram.   Types of Halal Certificates in Indonesia Categories that can apply for the Halal Certificate are: Food and Beverages, Drugs, Cosmetics, Slaughterhouses, and Restaurants/ Catering/ Kitchens Furthermore, both manufacturers and importers/distributors can apply for the Halal certificate. That’s not true if one of the requirements to obtain a Halal Certificate must be your company’s management needs to be Muslims. As long as your company complies with the requirements, the religion of its management team is irrelevant. Want to know more about Halal Certification? Please contact us! Read about the under-name import service Indonesia!

  Law Number 6 of 2011 concerning Immigration regulates the definition of sponsor or guarantor. A guarantor is a person or corporation responsible for the presence and activities of foreigners while in the territory of Indonesia. Obtain a stay permit sponsorship in Indonesia is a vital thing to have. A foreigner can’t choose randomly for a person to be a stay permit sponsorship in Indonesia since the Government has some specific criteria.   How to choose a stay permit sponsorship in Indonesia? Based on the laws and regulations in Indonesia, three legal subjects can become sponsors for foreigners who want to stay in Indonesia. The guarantor and sponsor have a crucial position in the visa process. Spouse of foreign citizens who will come to Indonesia, in the case of mixed marriages. Foreign nationals who are married to Indonesian citizens can obtain guarantees from their spouses who are Indonesian citizens. Spouses of Indonesian citizens can be the person in charge of regular visas. Every Indonesian citizen can also become a guarantor or sponsor of a visa for foreign citizens. Visas that can be sponsored by ordinary Indonesian citizens are Visa on Arrival and Repatriation Visa. Repatriates are foreign ex-Indonesian citizens who wish to live in the Indonesian Territory. Indonesian companies can also become sponsors or guarantors for Foreign Workers (Foreign Citizens who come to Indonesia to work). However, not all Indonesian companies can become sponsors or guarantors for their employees. Only Indonesian companies that have a minimum paid-up capital of IDR 1 billion can become guarantors.   Responsibilities as a Stay Permit Sponsorship Meanwhile, the guarantor or sponsor has various responsibilities after the guarantee for the foreign worker has obtained a visa. These responsibilities are: firstly, be responsible for the existence and behavior of foreign nationals or foreign workers during their existence in Indonesia; next, report any changes in civil status, immigration status, and changes in the address of the foreigner who is their responsibility; lastly, pay costs arising from the return or return of foreign nationals or foreign workers who are under guarantee by him if The residence permit for the foreign citizen or foreign worker in question has expired; the subject of immigration action in the form of deportation. Read The new regulation about stay permit in Indonesia during covid-19. Do you need a sponsor to apply for a stay permit in Indonesia? Please contact us! Need further information about KITAP in Indonesia? Click here

  Have a plan to import goods and products to Indonesia? If yes, some things need to prepare for the permit because Indonesia’s bureaucratic procedures are quite complex for trading compliance. Securing an Import License through OSS is not enough. Setting up a company in Indonesia is a must, which can take more than five months, even longer. Using under name import service in Indonesia will be more effective in cutting timeline, energy, and expenses.  This article will help give information regarding alternative methods to import goods using the under-name service in Indonesia.   What Is an Under Name Import Service? Username importer, known as the importer of record (IOR), is a legal entity registered in Indonesia responsible for all the documents and entry requirements for importing goods to the country. The under name import provider has official licenses and permits to carry out import activities registered under the Directorate General of Customs and Excise  an IOR will provide all entry documents needed for clearance through customs, payments for any levies, duties or fines, product certification, and classification, and other responsibilities, fall to the importer in Indonesia.   Benefits You Gain  Using this service can bring benefits for both companies and manufacturers related to import in Indonesia. The very first thing is there will be no issues with taxes and legal points since IOR is included as one of IOR’s responsibilities, so they will make sure everything is related to it. Next, importers or manufacturers who do not have the required documents and import approval from the authorities don’t need to bear custom risks of shipment delays and penalties. Lastly, benefits provided not limited to: The shipment clearance process becomes simpler. A transparent process that is fully in compliance with all export and import regulations It no necessary to establish an import legal entity in Indonesia just for importing purposes Lastly, Have a plan to set up a company in Indonesia? Please check this article first. Want to know more about the under-name import service in Indonesia? Please contact us.  

  Import is one of the trade activities legally transporting goods or commodities from one country to our country. The number of imported goods generally requires interference from customs in sending and receiving countries. Import license in Indonesia needed to import goods to the Indonesian market. It’s only for the particular industry and has restrictions on importing goods that are not related to some sectors of businesses. Therefore, you have to know in advance what business import license suits your business field and how you apply for it. To get through the customs clearance, you need to hold an import license no matter how small or how big your shipments are. This article will let you know everything you need to know about and apply for an import business license in Indonesia. What is Import License in Indonesia? Basically, import license in Indonesia is a non-tariff barrier that is used to control the import allowance and items to Indonesia. It is also protecting local producers by restricting the fields of goods imported.    Type of Import License in Indonesia There are 3 types of Import License in Indonesia:   1. API-U (General Import License)  This license is for fully-made products to be sold or distributed later in Indonesia. It is for the import of finished products or to trade goods with a third party.  2. API-P (Producer Import License)  Imported fowl raw materials or manufacture support goods for the manufacturing process in Indonesia need this license, but it’s restricted to re-selling/re-distribute the goods. In other words, the goods imported are only can use for the production/manufacturing process. 3. A Limited Import License (API-T) API-T is limited importer identification with the Indonesian Investment Coordinating Board (BKPM) as the issuer. The goods imported are subject to a reduced withholding tax of 2.5 % compared to the normal rate of 7.5 % under this license. However, since the entry into force of the OSS system, all licensing and licensing processes will be under OSS, including processing API and NIK permits as import permits. Through this OSS system, each company will get a NIB (Business Identification Number) which also applies as an Importer Identification Number (for import permits) and Customs Identification Number (if the company is processing import permits). The validity period of the NIB is as long as the company continues to operate. So nowadays, entrepreneurs engaged in import and export no longer need to take care of API and NIK. However, entrepreneurs still have to ensure whether they still need to meet the technical requirements in the field of the relevant authorities in carrying out import and export activities in the field. Thus, import companies or companies engaged in export activities do not need to go through obtaining API and NIK anymore. However, importers must ensure that they still meet the technical import requirements with the relevant authorities.   Important notes A regulation issued by the Ministry of Trade regulated about the same company does not allow for API-U and API-P license. Therefore, you need to set up 2 Companies to simultaneously able to conduct your business activities.   Documents Required to Apply for Import License in Indonesia Photocopy of Deed of Establishment from Notary Public and its amendments (if any). A copy of Ministry of Law and Human Rights Decree and amendments thereof (if any). Photocopy of Company Domicile Certificate (SKDP). A copy of NPWP and SKT Agency. Information related to the classification of business fields changed/included in the NIB. Photocopy of ID card of the shareholders. Photocopy of NPWP of the shareholders.   Want to know more about Import License in Indonesia? Please contact us We suggest you read about related Types of companies in Indonesia.  

  Indonesia is one of the most beautiful countries to lives in when the people, environment, and culture will never disappoint us. Furthermore, Indonesia is also known as a low living expenses country. So, having a plan to spend the retirement phase in Indonesia is absolutely a great choice that will never go wrong. Retirement Visa is a must-own stay permit to be a retiree in Indonesia. Retirement Visa is one kind of KITAS that is only given to pensioners over 55 years old who have no intention to work in Indonesia, valid for one year, and can be extended five times.   Requirements You Need to Fulfill to Get a Retirement Visa Applicant must be a Pensioner No working intention in Indonesia Over 55 years old Have a pension fund with a minimum of USD 1500/month However, hire Indonesian assistants and/or drivers is a must Have an Indonesian Sponsor   Documents You Should Prepare to Get a Retirement Visa Photocopy of all passport pages Eight passport photographs measuring 3 × 4, with a red background 12 photos measuring 6 × 4, with a red background curriculum vitae A married applicant must attach a marriage certificate The statement letter has a pension fund of at least $ 1,500 per month with a state bank origin and Indonesia Proof of having health insurance or life insurance Statement letter for accommodation in Indonesia A statement letter that will employ domestic assistants and drivers Indonesian citizenship Pay immigration fees Letter of support from the appointed travel agency A statement letter state will not work or do business in Indonesia   Procedure to Obtain a Retirement Visa Firstly, prepare all documents needed Secondly, upload all documents to the online immigration system Then, upon arrival in Indonesia, I need to do biometric After that, KITAS will be issued and given in 3 days work Lastly, register KITAS to Civil Departments to get SKSKPS & STM   Benefits Provide Allowed to live in Indonesia for many years Enter and exit the country as many times as you want to Permitted to open a local bank account Lease a land In addition, obtaining Retirement Visa only is not enough. A KITAP is mandatory to obtain. Above all, during this new normal era, The Ministry of Law and Human Rights applied new regulations related to visa and stay permits.  

  Have any business related to Indonesia in the relatively long term? If yes, a stay permit is needed to obtain. Therefore, knowing the differences among the kind of stay permits in Indonesia is very important to match the need. There are three types of stay permit in Indonesia:   Visit Stay Permit in Indonesia (ITK) ITK is given for a short-term visit (30-60 days) for those, such as: Firstly, Foreigners who enter Indonesian territory with a visit visa, Meanwhile, a child born in Indonesia’s territory and at the time of birth, the father and or mother was the holder of a Visit Stay Permit also eligible to hold ITK. Then, foreigners from countries exempted from the obligation to have a visa by statutory provisions. After that, a foreigner assigned as a child is a means of transportation anchored or in the territory of Indonesia under the statutory provisions. Also. foreigners who enter Indonesian territory in a state of emergency, and Lastly, foreigners who enter the territory of Indonesia with a Visit Visa on Arrival. Know more about Business Visa Indonesia.   Limited Stay Permit in Indonesia (ITAS) ITAS is a permit for foreigners that enter the territory of Indonesia with a limited stay visa or foreigners that eligible for status transfer from an ITK, which covers: Foreigners in the context of investment; Work as an expert; Performing duties as clergy; Attending education and training; Carry out scientific research; Joining a husband or wife who holds a limited stay permit; a father and or mother for children of foreign Nationality who have a family law relationship with the father and or mother of an Indonesian citizen, even the father and or mother holding a limited stay permit or permanent residence permit for children who are under 18 (eighteen) years of age and have not yet married; Foreigners ex Indonesian citizens; and Foreign elderly tourists. Children who at the time of birth in the Indonesian territory the father and or mother hold a limited stay permit; Foreign captains, crew, or foreign experts onboard ships, floating devices, or installations operating in the territorial waters and jurisdiction of Indonesia under the provisions of laws and regulations; Foreigners that legally married to Indonesian citizens; or Children of foreigners that legally married Indonesian citizens. Foreigner to do short-term work. Furthermore, an ITAS Valid from 90 days up to 2 years.   Permanent Stay Permit (ITAP) Above all stay permits in Indonesia, ITAP is the most wanted permit in Indonesia due to the advantages. An ITAP is given to certain foreigners to live and settle in Indonesia’s territory as a resident of Indonesia. The permit eligible in the case of: Firstly, Foreigners who hold limited stay permits as clergy, workers, investors, and older people, also family due to mixed marriage; Then, Husband, wife, and or children of foreigners who hold permanent residence permits; Lastly, Foreigner, ex-Indonesian citizen, and ex-child subject to the dual citizenship of the Republic of Indonesia. In addition, it is mandatory to hold ITAS that already been extended for 5 (five) years after that can be transformed into ITAP. However, during this COVID-19 situation, special regulation of stay permit applied by the Government of Indonesia. Please check it here. Do you find any difficulties in applying for a stay permit? Please contact us