Ease of Doing Business - Starting A Business in Indonesia PDF

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Wednesday, November 27, 2019 | Issue Number : 638
Ease of Doing Business: Starting a Business

in Indonesia
Overview
Within the pages of the World Bank’s Doing Business 2020 report (“2020 DB Report”)[1], which was of cially published on
24 October 2019,[2] Indonesia’s ranking on the 2020 Ease of Doing Business (“EoDB”) index remained stagnant at 73rd
position out of a total of 190 countries.[3] Indeed, this position actually represented a decline of one place from 72nd to 73rd
in the wake of the regular improvements which were posted between 2014 and 2018.[4] Nevertheless, President Joko
Widodo recently set an ambitious target of elevating the country’s ranking to between 40th and 50th position on the 2021
EoDB index.[5]
Generally speaking, the EoDB index is drawn up by the World Bank in order to rank the ease of doing business across
many different countries.[6] This ranking is determined based on the following 10 EoDB indicators: 1) Starting a business;
2) Dealing with construction permits; 3) Obtaining an electricity supply; 4) Registering property; 5) Obtaining credit; 6)
Protections for minority investors; 7) Payment of taxes; 8) Cross-border trade; 9) Enforcing contracts; and 10) Resolving
insolvencies.[7]
A higher EoDB ranking is often associated with a greater in ow of foreign direct investment, which in turn is believed to
create jobs, bring in new technologies and also result in a number of other bene cial collateral effects within the real
economy.[8] As a result, since his rst inauguration back in 2014, President Joko Widodo has taken a keen interest in
increasing Indonesia’s EoDB ranking in the hope of attracting a greater number of investors to the country and ultimately
boosting the national economy.
In support of the president’s stated objective of increasing Indonesia’s EoDB ranking, this edition of Indonesian Legal
Digest (“ILD”) will hopefully be able to increase awareness of the various EoDB indicators and speci cally the “Starting a
Business” indicator. This indicator has a vital role to play in terms of boosting a country’s EoDB ranking.[9] The discussion
set out in this edition of ILD has been broken down into several sections, as follows:
I. The “Starting a Business” Indicator: In a Nutshell;

II. Starting a Business in Indonesia;
A. Recent Developments in Indonesia in Relation to the “Starting a Business” Indicator;

B. Starting a Business in Indonesia: The Current State of Play;
III. Comparison with Other Jurisdictions;
A. Singapore;
B. Thailand
I. The “Starting a Business” Indicator: In a Nutshell
As the name implies, the “Starting a Business” indicator measures the ease of establishing a business within a given
country. This measurement addresses the entire company establishment process, which generally comprises the
following three stages:[10]
1. The pre-registration stage includes the following procedures: checking the availability of names, drafting and
notarization of a company’s status, depositing of minimum paid-up capital in a bank account and obtaining a
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spouse’s approval;
2. The registration stage includes the following procedures: application for incorporation, payment of registration
fees and other procedures which are set out under the commercial registry mandate; and
3. The post-registration stage includes the following procedures: registering with tax authorities, obtaining
business licenses, enrolling employees in social security programs, buying and/or legalizing company books
and obtaining a company seal.
In terms of the above, the “Starting a Business” indicator is based on components of time, cost, minimum paid-up
capital and number of procedures which have to be followed in order to get a local limited liability company up and
running. Details of each of these components are elaborated upon in the table below:[11]
Component Remarks
Procedures A procedure is any interaction that takes place between a company’s founders and any
external parties (e.g. government agencies, lawyers, auditors and/or notaries).
Procedures exclude any interactions that take place between a company’s founders or
between company of cers and their employees.
Only procedures which are required to be followed by all businesses are included in the
scope of procedures, whereas any industry-speci c procedures are excluded. For
example, procedures that relate to compliance with environmental regulations are
included only when they apply to all businesses which are looking to engage in general
commercial or industrial activities. Moreover, any procedures which a company must
follow in order to obtain supplies of electricity, water and gas, as well as waste disposal
services, are not included in the starting a business indicator.
It should also be noted that shortcuts are counted only if they ful ll four criteria: they
must be legal, they must be available to the general public, they must be used by the
majority of companies and avoiding them must lead to delays.
Time Time is recorded in calendar days. This measure captures the median duration that
incorporation lawyers or notaries indicate is necessary in order to complete a procedure
with minimum follow-up through government agencies and with no unof cial
payments being made.
The time span for each procedure starts with the rst ling of an application or request
and ends once a company has received the relevant nal document, such as a
company registration certi cate or tax number.[12] Any time spent preparing and
gathering information in order to complete forms is not measured.
Costs Costs are recorded as a percentage of the economy’s income per capita. Costs include
all of cial fees and fees which are paid in relation to the obtaining of legal or
professional services if such services are required by law or are commonly used in
practice. However, in spite of the fact that value-added-tax registrations can be counted
as a separate procedure, value-added tax is not included in any incorporation costs.
The relevant company law, commercial code, speci c regulations and fee schedules are
to be used as sources for the calculation of costs. In the absence of any of cial fee list, a
government of cer’s estimate is to be taken as an of cial source. In the absence of a
government of cer’s estimate, estimates which are made by incorporation experts are
to be used. If several incorporation experts provide different estimates, then the median
reported value is applied. In all cases, costs must exclude bribes.
Minimum paid-up capital The minimum paid-up capital requirement reï¬‚ects the amount of capital that needs
to be deposited in a bank or with a third-party (e.g. a notary) prior to registration or up
to three months after incorporation and is recorded as a percentage of an economy’s
per capita income. The amount is usually speciï¬ed under the relevant company law.
II. Starting a Business in Indonesia
Indonesia has been included in the Doing Business study since its inception back in 2004.[13] As part of the study,
the measurement of the “Starting a Business” indicator in Indonesia uses the same main components which were
outlined in the previous section.
In general, these components are to be measured within the largest city of business within a given country.
However, for countries with populations of over 100 million, measurements will also include a study of a country’s
second-largest business city.[14]
Therefore, as speci ed under the Doing Business 2020 – Economy Pro le of Indonesia (“2020 DB Economy Pro le of
Indonesia”),[15] the measurement of the “Starting a Business” indicator in Indonesia refers to studies undertaken in
both Jakarta and Surabaya.[16]
A. Recent Developments in Indonesia in Relation to the “Starting a Business” Indicator
As mentioned above, Indonesia has been included in the Doing Business study since 2004. However, it
generally ranked in the lower portions of the EoDB index until the country started to experience rapid
development under the administration of President Joko Widodo back in 2014.
In order to illustrate the development that has taken place in terms of Indonesia’s “Starting a Business”
indicator, the table below elaborates upon and compares study results for the four main components of this
indicator for each year since 2014:
Costs (Percentage
Number of Time (in Minimum Paid-up “Starting a
Year of per Capita
Procedures Days) Capital (in IDR) Business” Ranking
Income)
2014[17] 10 procedures 48.0 20.5% IDR 12.5 million 175
2017[20] 11.2 procedures 24.9 19.4% IDR 0 151
2018[21] 11 procedures 22 10.9 % IDR 0 144
2019[22] 10 procedures 20 6.1% IDR 0 134
2020[23] 11 procedures 10 5.7% IDR 0 140
Based on the above table, it is clear that Indonesia has made signi cant improvements in terms of its “Starting
a Business” indicator in recent years through reductions in the number of procedures, times and costs involved
in the establishment of limited liability companies. The improvements which have been made by the
government over the last few years include the following:[24]
1. Introduction of the Online Single Submission (“OSS”) system as an online platform for business licensing,
as well as the replacement of hard copies with electronic certi cates, in accordance with Regulation of the
Government No. 24 of 2018 on Electronically Integrated Business Licensing Services (“Regulation 24/2018”);
2. Combining of different social security registrations and reduction of notarization fees;
3. Reduction of start-up fees for limited liability companies;
4. Abolition of the minimum capital requirement for small- and medium-scale enterprises;[25]
5. Promotion of the use of an online system in order to reserve company names;
6. Reduction of the time required in order to register with the Ministry of Manpower; and
7. Allowing the Ministry of Law and Human Rights (“MoLHR”) to issue online approval letters for deeds of
establishment, as permitted through the issuance of Regulation of the MOLHR No. 1 of 2016 on the Fourth
Amendment to Regulation of the Minister No. 4 of 2014 on Procedures for the Submission of Applications
for the Validation of Legal Entities and Approvals and Noti cations for the Amendment of Limited Liability
Companies’ Constitutions and Information (“Regulation 1/2016”).
B. Starting a Business in Indonesia: The Current State of Play
The 2020 DB Report features the most recently updated set of overall procedures for starting a business in
Indonesia. The overall procedures which apply in Jakarta are as elaborated upon in the table below:[26]
No. Procedure Details Completion Time Associated Costs
1 Obtaining clearance for and reserving a company name with > One day (online) IDR 100,000
the assistance of a public notary and through the payment of a
clearance fee via an online platform.
2 Submission of the relevant reserved name to the MoLHR > One day (online) Included in
through the Legal Entity Administration System by lling out a procedure (3)
company name application form.[27]
It should be noted that a proposed name must not, among

other stipulations, be the same as or resemble the name of any
other company.[28]
The approval of a company name will be delivered

electronically to the relevant applicant.
3 Payment of non-tax state revenue fees for the relevant legal > One day (online) IDR 500,000
services via an online platform. (validation of a
company as a legal
entity) + IDR 430,000
(publication in the
State Gazette and the
Supplement to the
State Gazette)[29]
4 Arranging for a notary to obtain the standard form of the One day See procedure details
company deed and to notarize company documents (i.e. deed

of establishment, articles of association).
Notary fees for the preparation and notarization of company

documents are categorized based on the relevant company’s
capital, speci cally:[30]
IDR 500,000, for capital of up to IDR 25 million;

IDR 2 million, for capital of up to IDR 500 million; and
IDR 4 million, for capital of up to IDR 1 billion.
5 Creation of a company seal in order to stamp all applications. One day IDR 30,000
Institutions will neither receive nor approve any documents
which do not bear a company stamp.
6 Application made to the MoLHR for the approval of the deed of > One day (online) -
establishment. Such approval applications should be led
electronically through the attaching of bank account
certi cates and copies of bank transmittal advice[31]
7 Application for a certi cate of domicile which should be made Two days No charge
to the head of the village (lurah) in which the company is
located or by the building management (if the relevant of ce
space is being leased).
8 Application for a Single Business Number (Nomor Induk One day No charge
Berusaha – “NIB”) as a replacement for a permanent business
trading license and company registration certi cate.[32]
NIB applications should be undertaken via the OSS system.
9 Submission of a manpower report to the Ministry of Manpower One day No charge

(“MoM”) within 30 days of the relevant company’s
establishment.
This report must at least contain the following information: 1)

Company’s identi cation; 2) Manpower relations; 3) Manpower
protection; and 4) Employment opportunities.[33]
10 Registration of company employees under the Worker Social One day No charge
Security Program (BPJS Ketenagakerjaan) and the Health
Security Program (BPJS Kesehatan).
Joint applications for the abovementioned programs can be

submitted online via: www.bpjs.go.id.
11 Registration with the tax authorities and application for a One day No charge
Taxable Entrepreneur Registration Number (Nomor Pokok
Pengusaha Kena Pajak) and a Taxpayer Identi cation
Number (Nomor Pokok Wajib Pajak).
Applications may be submitted online or via the relevant tax

of ce in the area in which the company is located, along with
the following documents:
1. Deed of establishment;
2. Identity card of one active director;
3. Statement letter which addresses con rmation of the
relevant place of business.
It is important to note that EoDB indicators are intended to assess whether a given country’s regulations are
investment-friendly and also whether said regulations are effectively enforced.[34] In this context, President
Joko Widodo has constantly pushed for deregulation throughout his administration, as well as for the
implementation of various debureaucratization strategies, with his recently stated and ultimate goal being
improving Indonesia’s EoDB ranking to the 40 to 50 range. Consequently, the further trimming of procedures
and investment licensing processes is to be expected in the near future.[35]
However, it should be noted that this is not the rst time that the president has issued such instructions. In fact,
since the rst year of his administration, President Widodo has made several attempts to deregulate the
prevailing frameworks and to support regulatory reform. However, these efforts are generally perceived to have
been lacking in terms of in-the- eld implementation, and indeed, the decline and stagnation of Indonesia’s
EoDB ranking over the last two years would seem to con rm this.[36]
III. Comparison with Other Jurisdictions
Continuing the discussion of the previous section, it will be useful for this edition of ILD to set out some kind of
comparison regarding the overall procedures for starting a business which apply within two neighboring
jurisdictions, both of which currently rank further up the Doing Business Report, speci cally: 1) Singapore; and 2)
Thailand.
A. Singapore
Based on the Doing Business 2020 - Economy Pro le of Singapore (“2020 DB Economy Pro le of Singapore”)
report,[37] the overall procedures which have to be followed in order to establish a company in Singapore break
down as follows:[38]
No Procedure Completion Time Associated Costs
1 Online registration via the Accounting and Corporate Regulatory > One day (online) SGD 15 (company
Authority (“ACRA”), which is the national regulator for business, name fee) + SGD
public accountants and corporate service providers in Singapore. 300 (registration
fee)

The process starts with an application for a new company name. This
application for the approval and reservation of a company name is
submitted online. Once an application has been submitted, the
applicant can opt to either pay the fee and continue with the
incorporation later or to immediately proceed to the incorporation
application.
The applicant must then continue by lling out the relevant

incorporation forms, submitting all of the necessary documents and
information required and paying the incorporation fees. Upon
successful submission, the ACRA will issue a notice of incorporation
via email and provide the business with a free copy of its of cial
Business Pro le. The processing time should take about 15 minutes.
All of the abovementioned processes take place through an online

platform known as Biz le+.
2 Signing up for employee compensation insurance via the insurance One day No charge
agency. All employers are obliged to be insured and to maintain
insurance under one or more approved policies with an insurer
against all liabilities.[39]
The Workman Injury Compensation Insurance has been

incorporated into ACRA’s online registration process and business
owners can apply immediately after completing the online
registration process.
Times and costs may vary dependent on the arrangement between

the relevant company and the insurance agency.
Although recently overtaken by New Zealand, which has now claimed top ranking on the EODB index,
Singapore still maintains its status as one of the easiest countries in the world to invest in, particularly within the
Southeast Asia region. With only two procedures that have to be ful lled and costs of only SGD 315
(approximately IDR 3.2 million), a party should be able to establish a company in less than two days. This is far
cry from starting a business in Indonesia, which currently requires the ful llment of 11 procedures.
Similar to Singapore with its Biz le+, Indonesia has now established the OSS system, which offers a number of
similar services. While this is undoubtedly a step in the right direction, numerous improvements and
optimizations will be required in order for the OSS to be able to perform at anything like its full potential.
Furthermore, Singapore centralizes the procedure involved in the establishment of companies within the
ACRA. Indonesia, in contrast, currently still involves multiple institutions in the establishment of companies,
which undoubtedly complicates the process.
B. Thailand
Based on the Doing Business 2020 - Economy Pro le of Thailand (“2020 DB Economy Pro le of Thailand”)
report,[40] the overall procedures which have to be followed in order to establish a company in Thailand break
down as follows:[41]
No Procedure Completion Time Associated Costs
1 Searching for and reserving a company name via the Department of Two days No Charge
Business Development’s website. Applicants may submit three
names for approval and name reservations will remain valid for 30
days.
2 Once a company gains approval for its memorandum and articles of One day No Charge
association, it must hold a statutory meeting during which the
promoters will hand over the business to the relevant directors. The
directors will then take control from the promoters and subscribe to
pay in at least 25% of the registered capital.
3 At the Single Point Service Center, the business may complete the One day See procedure
following: details
Register a memorandum of association;

Apply and pay to register the company as a legal entity ( nal
registration);
Obtain a Tax Identi cation Number; and
Register for social security and the workmen’s compensation
fund.
All of the documents required for the abovementioned activities are

to be submitted and received at a single window within one day.
The costs associated with services which are provided via the Single
Point Service Center include the following:
Registration of a memorandum of association: THB 500

Registration of a company: THB 5000
Stamp duty, to be af xed to the memorandum of association:
THB 200
Stamp duty, to be af xed to the articles of association: THB 200
Certi cate of registration fee: THB 100
Af davit fee: THB 200
Certi cation document fee: THB 50 per page.
4 Registration for Value Added Tax (VAT) purposes, which is mandatory One day No charge
for all companies with annual revenues that exceed a threshold of
THB 1.8 million. If a company’s revenue is less than 1.8 million THB,
then the company should submit a Por.Por.01-1 form.
The applicant should submit their application to the Bangkok Area

Revenue Of ce where the company of ce is located. However, the
Revenue Department has recently introduced the possibility of VAT
registration via an online system.
5 An employer and all employees must be registered as insured One day No charge
persons with the Social Security Of ce (“SSO”). The employer should
pick up an application form from the SSO where the company is
located and submit a registration form to the Zone Of ce for Social
Security.
Thailand has always ranked towards the top of the EODB index, averaging around 20th position. The overall
process of company establishment in Thailand encompasses ve procedures and an overall cost of
approximately THB 6,200 (approximately IDR 2.9 million).
The main difference between the processes involved in the establishment of a company in both Thailand and
Indonesia is the fact that Thailand utilizes a Single Point Service Center as the main hub for the approval of
company documents, the obtaining of tax identi cation numbers and the registration of social security
memberships. In contrast, Indonesia still requires applicants to make applications through several agencies
and does not yet have such a centralized system in place. Furthermore, Indonesia also requires a number of
additional procedures to be completed which are not applicable in Thailand, such as applications for
certi cates of company domicile and the submission of reports to the MoM.
Conclusion
It is clear that Indonesia’s EODB score and ranking, for better or worse, is now having a substantial impact on the levels of
investment that the country is able to attract, as well as on the levels of trust in the country’s government. This has
become increasingly apparent under the administration of President Joko Widodo, who recently stated his aim that
Indonesia should rank within the 40 to 50 range on the EoDB index in the hope that more investors will be attracted to
the country, in turn, boosting the overall national economic outlook.
If it is to meet this ambitious this target, it will be vital for the country to improve its performance in terms of the following
key EoDB indicators: 1) Starting a business; 2) Dealing with construction permits; 3) Obtaining an electricity supply; 4)
Registering property; 5) Obtaining credit; 6) Protections for minority investors; 7) Payment of taxes; 8) Cross-border trade;
9) Enforcing contracts; and 10) Resolving insolvencies. One of the main indicators that the country needs to focus on is the
“Starting a Business” indicator, which has an important role to play in terms of increasing a country’s EoDB ranking.
Based on the above discussion, it seems clear that the Indonesian Government has been striving to improve the various
metrics which are assessed under the “Starting a Business” indicator. These metrics encompass the number of required
procedures, time, costs and minimum paid-up capital. In order to address these issues, the government is continuing to
eliminate regulations that are generally perceived to be too burdensome and to prolong the business establishment
processes. The Indonesian Government has also been developing various means to realize a business establishment
process which is more ef cient and effective in terms of both costs and time.
However, the recent decline and stagnation in Indonesia’s EoDB ranking have revealed that the many attempts which
have been made in order to improve this indicator are still not being optimally implemented. As a result, the president
recently called for a process of structural reform aimed at ensuring that deregulation and debureaucratization strategies
are well implemented at both the central and regional levels. At the end of the day, the EoDB indicators, including the
“Starting a Business” indicator, are measures of a country’s regulatory environment and ultimately whether said country is
investment-friendly and has an effective bureaucracy. SS
[1] This report can be accessed here.
[2] World Bank, “Doing Business 2020 – Sustaining the pace of reforms,” as accessed through
https://www.worldbank.org/en/news/feature/2019/10/24/doing-business-2020-sustaining-the-pace-of-reforms on 25
November 2019.
[3] 2020 DB Report, p.4.

[4] Badan Koordinasi Penanaman Modal, “Ease of Doing Business” as accessed through
https://www.investindonesia.go.id/en/why-invest/ease-of-doing-business on 25 November 2019.
[5] Hukumonline, “Inginkan Peringkat EoDB Naik ke 50, Reformasi Regulasi Harus Dilakukan,” as accessed through
https://www.hukumonline.com/berita/baca/lt5dd65f4dc5570/inginkan-peringkat-eodb-naik-ke-50--reformasi-regulasi-
harus-dilakukan/ on 25 November 2019.
[6] Badan Koordinasi Penanaman Modal, “Ease of Doing Business” as accessed through
https://www.investindonesia.go.id/en/why-invest/ease-of-doing-business on 25 November 2019.
[7] 2020 DB Report, p.17.
[8] Doing Business 2013 Report, p.47. The report can be accessed here.
[9] Hukumonline, “Peringkat EoDB Stagnan, Deregulasi Investasi Masih Tumpul,” as accessed through
https://www.hukumonline.com/berita/baca/lt5db3ec3c75f1c/peringkat-eodb-stagnan--deregulasi-investasi-masih-
tumpul/ on 26 November 2019.
[10] Frederic Meunier, “Doing Business 2019 Training for Reform – Starting a Business”, as accessed through
https://olc.worldbank.org/system/ les/DB19%20SB%20Presentation_OLC_EN.pdf on 26 November 2019.
[11] Doingbusiness.org, “Starting a Business Methodology”, as accessed through the

https://www.doingbusiness.org/en/methodology/starting-a-business, on 26 November 2019.
[12] Doingbusiness.org, “Starting a Business Questionnaire”, p.5, as accessed through the

https://www.doingbusiness.org/content/dam/doingBusiness/pdf/db2020/DB20-Starting-a-Business-Questionnaire.pdf, on
22 November 2019.
[13] Doingbusiness.org, “Doing Business in 2004, Understanding Regulation”, as accessed through

https://www.doingbusiness.org/content/dam/doingBusiness/media/Annual-Reports/English/DB04-FullReport.pdf, on 22
November 2019.
[14] 2020 DB Report, p.21.
[15] The pro le can be accessed here.
[16] 2020 DB Economy Pro le of Indonesia, p.4
[17] Doing Business 2014 - Economy Pro le of Indonesia, pp.15, 16 and 20.
[18] Doing Business 2015, Economy Pro le of Indonesia, pp.17-19.
[23] Doing Business 2020, p.6.
[24] DB Economy Pro le, 2020, p.124-125.
[25] The minimum authorized capital for a limited liability company was set at IDR 50 million under Law No. 40 of 2007 on
Limited Liability Companies (“Company Law”). However, since the enforcement of Regulation of the Government No. 29 of
2016 on the Amendment to the Authorized Capital of Limited Liabilities Companies, no minimum authorized capital
amount has subsequently applied since such capital is now subject to agreement between the parties establishing
limited liability companies. It should be noted that issued and paid-up capital is still subject to the threshold which is set
under the Company Law, speci cally 25% of the relevant authorized capital.
[26] 2020 DB Economy Pro le, pp. 8-10.
[27] Art. 4, Regulation of the MoLHR No. 4 of 2014.
[28] For other requirements relating to the use of company names, see Article 5, Regulation of the Government No. 43 of
2011.
[29] As speci ed under Schedule 1, Regulation of the Government No. 45 of 2016 on the Second Amendment to
Regulation of the Government No. 45 of 2014 on the Types and Tariffs of Non-Tax State Revenue Applicable at the Ministry
of Law and Human Rights.
[30] Art. 2, Regulation of the MoLHR No. 8 of 2018 on Legal Service Fees for the Establishment of Limited-Liability
Companies by Micro-, Small- and Medium-Scale Enterprises.
[31] Arts. 9, 10, 29 and 39, Company Law.
[32] Arts. 24-26, Regulation 24/2018.
[33] Art. 6, Law No. 7 of 1981 on Mandatory Labor Affairs Reports.
[34] 2020 DB Report, p.2-3.
[35] Hukumonline, “Inginkan Peringkat EoDB Naik ke 50, Reformasi Regulasi Harus Dilakukan,” as accessed through
https://www.hukumonline.com/berita/baca/lt5dd65f4dc5570/inginkan-peringkat-eodb-naik-ke-50--reformasi-regulasi-
harus-dilakukan/ on 25 November 2019.
[36] Hukumonline, “Peringkat EoDB Stagnan, Deregulasi Investasi Masih Tumpul,” as accessed through
https://www.hukumonline.com/berita/baca/lt5db3ec3c75f1c/peringkat-eodb-stagnan--deregulasi-investasi-masih-
tumpul/ on 26 November 2019.
[37] This report can be accessed here.
[38] 2020 DB Economy Pro le of Singapore, p.8.
[39] Section 23 (1), Chapter 354, Work Injury Compensation Act of Singapore.
[40] The report can be accessed here.
[41] 2020 DB Economy Pro le of Thailand, p.8-9.

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4/15/2020 Ease of Doing Business: Starting a Business in Indonesia - Hukumonline.

Wednesday, November 27, 2019 | Issue Number : 638

Ease of Doing Business: Starting a Business

I. The “Starting a Business” Indicator: In a Nutshell;

A. Recent Developments in Indonesia in Relation to the “Starting a Business” Indicator;

III. Comparison with Other Jurisdictions;

I. The “Starting a Business” Indicator: In a Nutshell

II. Starting a Business in Indonesia

A. Recent Developments in Indonesia in Relation to the “Starting a Business” Indicator

2014[17] 10 procedures 48.0 20.5% IDR 12.5 million 175

2015[18] 10 procedures 52.5 21.1% IDR 12.5 million 155

2016[19] 13 procedures 47.80 19.9% IDR 12.5 million 173

2017[20] 11.2 procedures 24.9 19.4% IDR 0 151

2018[21] 11 procedures 22 10.9 % IDR 0 144

2019[22] 10 procedures 20 6.1% IDR 0 134

2020[23] 11 procedures 10 5.7% IDR 0 140

B. Starting a Business in Indonesia: The Current State of Play

No. Procedure Details Completion Time Associated Costs

It should be noted that a proposed name must not, among

The approval of a company name will be delivered

Notary fees for the preparation and notarization of company

IDR 500,000, for capital of up to IDR 25 million;

NIB applications should be undertaken via the OSS system.

9 Submission of a manpower report to the Ministry of Manpower One day No charge

This report must at least contain the following information: 1)

Joint applications for the abovementioned programs can be

Applications may be submitted online or via the relevant tax

III. Comparison with Other Jurisdictions

No Procedure Completion Time Associated Costs

The applicant must then continue by lling out the relevant

All of the abovementioned processes take place through an online

The Workman Injury Compensation Insurance has been

Times and costs may vary dependent on the arrangement between

No Procedure Completion Time Associated Costs

Register a memorandum of association;

All of the documents required for the abovementioned activities are

Registration of a memorandum of association: THB 500

The applicant should submit their application to the Bangkok Area

[1] This report can be accessed here.

[3] 2020 DB Report, p.4.

[7] 2020 DB Report, p.17.

[11] Doingbusiness.org, “Starting a Business Methodology”, as accessed through the

[12] Doingbusiness.org, “Starting a Business Questionnaire”, p.5, as accessed through the

[13] Doingbusiness.org, “Doing Business in 2004, Understanding Regulation”, as accessed through

[14] 2020 DB Report, p.21.

[15] The pro le can be accessed here.

[16] 2020 DB Economy Pro le of Indonesia, p.4

[18] Doing Business 2015, Economy Pro le of Indonesia, pp.17-19.

[19] Doing Business 2016, Economy Pro le of Indonesia, pp.17-19.

[20] Doing Business 2017, Economy Pro le of Indonesia, pp.19-21.

[21] Doing Business 2018, Economy Pro le of Indonesia, pp.4-6.

[22] Doing Business 2019, Economy Pro le of Indonesia, pp.4-6.

[23] Doing Business 2020, p.6.

[24] DB Economy Pro le, 2020, p.124-125.

[26] 2020 DB Economy Pro le, pp. 8-10.

[27] Art. 4, Regulation of the MoLHR No. 4 of 2014.

[31] Arts. 9, 10, 29 and 39, Company Law.

[32] Arts. 24-26, Regulation 24/2018.

[33] Art. 6, Law No. 7 of 1981 on Mandatory Labor Affairs Reports.

[34] 2020 DB Report, p.2-3.

[37] This report can be accessed here.

[38] 2020 DB Economy Pro le of Singapore, p.8.

[40] The report can be accessed here.