As an entrepreneur, you might have heard of the term Ijin Usaha Penanaman Modal (IUPM) or Business License for Capital Investment. It is a permit required for businesses that want to invest in Indonesia. In this article, we will discuss what IUPM is, how to apply for it, and everything else you need to know about it.
What is Ijin Usaha Penanaman Modal (IUPM)?
IUPM is a legal document issued by the government of Indonesia that permits foreign and domestic investors to establish and operate businesses in the country. This permit is regulated by the Investment Coordinating Board (BKPM) and is required for all businesses that intend to invest in Indonesia.
IUPM is also known as a Business License for Capital Investment (BLKI) and is categorized into three types:
- IUPM for Micro and Small Businesses
- IUPM for Medium-Sized Businesses
- IUPM for Large-Scale Businesses
The type of IUPM you need to obtain depends on the size and nature of your business. For instance, if you plan to invest in a small business, you will need to apply for an IUPM for Micro and Small Businesses.
Why is Ijin Usaha Penanaman Modal (IUPM) Important?
Obtaining an IUPM is important for investors who want to establish businesses in Indonesia for several reasons:
- Legal Protection: An IUPM provides legal protection to investors and their businesses. It serves as a legal document that proves the legitimacy of the business and its operations.
- Access to Benefits: IUPM holders are entitled to several benefits, such as tax incentives, import duty exemptions, and access to various government programs and facilities.
- Foreign Investment: For foreign investors, an IUPM is required to secure a business visa and work permit in Indonesia.
How to Apply for Ijin Usaha Penanaman Modal (IUPM)
The process of obtaining an IUPM involves several steps:
Step 1: Determine the Type of IUPM You Need
Determine the type of IUPM you need based on the size and nature of your business. You can consult with BKPM or visit their website to learn more about the different types of IUPM.
Step 2: Prepare the Required Documents
Prepare the required documents for your IUPM application, which may include:
- Business plan
- Articles of association
- Investment plan
- Feasibility study
- Company profile
- Proof of capital
- Land certificate or lease agreement
Make sure that all your documents are complete and accurate to avoid any delays in the application process.
Step 3: Submit Your Application
Submit your application to BKPM either online or in person. You will be required to pay a fee for your application. The fee varies depending on the type of IUPM you are applying for.
Step 4: Wait for the Approval
After you submit your application, BKPM will review your documents and conduct an evaluation of your business plan and investment plan. The evaluation process may take up to 20 working days for Micro and Small Businesses IUPM and up to 30 working days for Medium-Sized Businesses and Large-Scale Businesses IUPM.
If your application is approved, you will receive an IUPM certificate that is valid for 3 to 5 years. You will need to renew your IUPM before it expires to continue operating your business in Indonesia.
The Bottom Line
Ijin Usaha Penanaman Modal (IUPM) is a crucial permit for businesses that want to invest in Indonesia. Obtaining an IUPM provides legal protection, access to benefits, and is required for foreign investors to secure a business visa and work permit in Indonesia. Follow the steps outlined above to apply for an IUPM and start growing your business in Indonesia.
