Work Permit for Entrepreneurs
Being an entrepreneur is quite interesting, especially for young people with various of ideas. There’s no denying that one of the best parts of being an entrepreneur is the complete freedom you have to do your own thing. You have no bosses to report to, or managers peering over your shoulder. Entrepreneurs have gone from the bottom all the way to the top. Therefore, you are your own boss. With all that extra responsibility, there comes flexibility. Many people are excited to work for themselves because it means they can work wherever and whenever they want. Entrepreneurship is also interesting for many people because the profits can slide right into their own pockets. This means each business success becomes your success. As your business grows, so does your potential income. That can be motivating for many new entrepreneurs on the path to success.
Not many entrepreneurs know how important it is to have business legality documents as a form of authenticity of their business entities. By having important company documents that show the legality of their business entity, the potential to be glimpsed by a wider market share is huge. Whether you want to start a side hustle, go freelance or launch your own business, you have to make sure that you understand the work permit of being entrepreneur in Indonesia. Here are some things that you need to know about:
1. Your company needs to legally registered: TDP
Every business entity is required to have a Certificate Company Registration or as well-known as Tanda Daftar Perusahaan (TDP), whether in the form of a legal entity, cooperative or individual. It is stated that every company in the form of a Limited Liability Company (PT), Cooperative, Limited Partnership (CV), Firm, Individual, and Other Business Forms includes Foreign Companies with the status of Head Office, Sole Office, Branch Office, Support Office, Subsidiary, Company Agent, and Company representatives domiciled and running their business in the territory of Republic of Indonesia are required to register their business in the company register. By registering a company, all activities of your company will be legally protected. TDP is also a supporting company document to help develop your business.
2. Make sure you have the license: SIUP
Entrepreneurship in Indonesia needs a special permit that’s called Surat Izin Usaha Perdagangan (SIUP). SIUP is one kind of a license to carry out trading business activities. Every company, cooperative, association or individual company that carries out trading business activities is obliged to obtain a SIUP issued based on the company’s domicile and is valid throughout the territory of the Republic of Indonesia. This Trading Business License serves as a means or proof of validation of the trading business you are doing.
Types of SIUP:
- SIUP MIKRO: given to Micro Trading Companies, with total capital and net worth not more than Rp. 50 million
- SIUP KECIL: for a Trading Company with total capital and net assets of Rp. 50 million to Rp. 500 million, excluding land and buildings for business premises
- SIUP MENENGAH: for a Trading Company with total capital and net assets of Rp. 500 million to Rp. 10 billion, not including land and buildings for business
- SIUP BESAR: for a Trading Company with total capital and net assets of more than Rp. 10 billion, not including land and buildings for business
SIUP is valid as long as the Trading Company carries out business activities. Starting early 2017, SIUP does not need to be re-registered anymore. You also need to remember that one SIUP can only be valid for one business. The government of Indonesia doesn’t allow you to use the same SIUP for two businesses. If you want to open two businesses, you should also apply for two SIUPs.
How to get the SIUP:
1. Take the registration form / application letter at the Trade Office
2. Fill in the Registration Form or Application Letter at the Trade Service Office
3. Paying the SIUP Preparation Rate
4. SIUP is ready approximately 2 weeks later. The officer will contact you when it’s ready!
3. Entrepreneurs need to pay the Entrepreneur tax
Nomor Pokok Wajib Pajak (NPWP)
Taxpayer Identification Number or Nomor Pokok Wajib Pajak (NPWP) is a series of serial numbers used by the tax office to identify taxpayers in Indonesia, both personal and corporate taxpayers. In order to be able to carry out all tax activities such as tax administration, taxpayer identity, and requirements for a number of public services, a NPWP is required. For those of you the business owners, you must register your business to get a NPWP if you are a taxpayer who has met the requirements in accordance with the provisions of laws and regulations in the field of taxation.
Pengusaha Kena Pajak (PKP)
Taxable Entrepreneur or Pengusaha Kena Pajak (PKP) is an entrepreneur who delivers taxable goods or Barang Kena Pajak (BKP) and taxable services or Jasa Kena Pajak (JKP). PKP can also be applied to small entrepreneurs who choose to be confirmed as taxable entrepreneurs. Entrepreneurs who have a yearly gross income or turnover of Rp. 4.8 Billion are required to apply to be confirmed as a Taxable Entrepreneur (PKP). The tax letter is issued by the Tax Service Office containing the identity and tax obligations of a Taxable Entrepreneur. One of the reasons entrepreneurs want to register for PKP is because entrepreneurs who have been confirmed as PKP can collect Value Added Tax or Pajak Pertambahan Nilai (PPN) on goods or services to consumers who consume the goods and services.
Small entrepreneurs are not required to register for PKP, but if small entrepreneurs wish to register for PKP, they are welcome. Most small entrepreneurs who have a Taxable Entrepreneur Confirmation Letter want the opportunity to compete in tender auction projects. This is because one of the general requirements for participating in a tender project is that the entrepreneur has the PKP. So, the opportunity to expand the business for entrepreneurs is wide open by having PKP documents.
So, those are some legal documents that you need to work on when you decide to be an entrepreneur in Indonesia. Some cases need more documents depending on each business type. If you are a foreigner, you also need working permit as foreigner, KITA. You can read more about KITA on this article!