Starting a business in Indonesia means we need to understand various regulations, including the KBLI (Klasifikasi Baku Lapangan Usaha Indonesia). It acts as our business’s fingerprint, categorizing the activities and influencing everything from permits to legal operations. Obtaining the correct KBLI code ensures compliance and unlocks a smoother path to success. This article will guide you to know the KBLI system better before you start the application process.
The Importance of KBLI for Business
KBLI stands for Klasifikasi Baku Lapangan Usaha Indonesia, or in English, Indonesia Standard Industrial Classification. It’s a business classification system for economic activities in the form of a numerical code. This 5-digit code is mandatory for a company after the business obtains its NIB (Nomor Induk Berusaha or business identification number) to legally operate. Besides legal reasons, there are several other points why obtaining KBLI code is important for a business in Indonesia. Among others are
— Streamlined licensing process: As your business expands and offers new services, you might need additional permits. KBLI code simplifies interactions with government agencies where you apply for other business licenses. The code helps identify your business category and streamlines processes related to permits, licenses, and tax filings.
— Transparency and Clarity: KBLI code clearly communicates the nature of your business activity to relevant stakeholders. This can be beneficial when dealing with banks, investors, or other businesses for partnerships or transactions.
— Access to Resources: Government programs or incentives might be targeted towards specific business categories based on KBLI codes. Having the right code ensures you’re eligible for any relevant benefits or support programs.
Essential Details in KBLI Code
The 5-digit KBLI code provides detailed information about a specific business activity in Indonesia. It goes beyond just categorizing the business; it also includes essential details that are crucial for various legal and regulatory procedures. Here’s a breakdown of the information included in the 5-digit KBLI:
— Business scale: This indicates the size of the business, typically based on factors like number of employees, annual revenue, or asset value.
— Land area: The size of the land area required for the business operation is specified here.
— Risk level: The level of risk associated with the business activity, which can impact various factors like insurance requirements and regulatory oversight.
— Business permits that must be fulfilled: This section outlines the specific permits and licenses you must apply to operate the business legally.
— Permit application period: The timeframe within which the business must apply for the necessary permits is specified.
— Business permit validity period: The duration for which the business permits are valid is indicated.
— The government agencies that are authorized to manage the business permit.
KBLI also put some certain parameters that are set as additional points that may apply to the business activity. For example, environmental requirements or health and safety standards. By providing that comprehensive information, the 5-digit KBLI code plays a crucial role in ensuring businesses operate in compliance with regulations and facilitating efficient government processes.
Overcome the Challenges of KBLI
Due to structural bureaucracy in government agencies, investors or business owners might face some potential challenges or obstacles during application of KBLI. Especially if you are foreign nationals operating in Indonesia. The technical system and language barrier can create challenges in understanding KBLI classifications and going through the application process, especially if official resources are available in Bahasa Indonesia.
Anticipate the issues by consulting professionals that are familiar with KBLI classifications. Seven Stones Indonesia can help you interpret the codes, identify the right one for your business, and potentially assist with the application process. Wise man says, our success depends upon previous preparation. So don’t hesitate to contact our office to learn more about KBLI in detail. Seven Stones Indonesia is ready to help you take the proactive steps to address your business needs to get the KBLI. Â
