If you are planning to start a business in Indonesia, you might have heard about the importance of getting a Principal License BPKM. This license is a requirement for all foreign investors who want to establish a company or invest in a business in Indonesia.
What is Principal License BPKM?
The Principal License BPKM, or Izin Prinsip in Indonesian, is a permit issued by the Investment Coordinating Board of Indonesia (BKPM) to foreign investors who intend to establish a company or invest in a business in Indonesia. This license is a pre-requisite to obtain other licenses required to run a business in Indonesia.
The Principal License BPKM is valid for 1 year and can be extended up to 2 years. The license allows the investor to conduct a feasibility study, finalize the investment plan and secure the necessary licenses to start the business.
Why is Principal License BPKM important?
The Principal License BPKM is an important step in the process of establishing a business in Indonesia. It is a requirement for foreign investors to obtain the license before starting business activities in Indonesia. The license serves as an approval from the BKPM that the proposed business plan meets the legal requirements and regulations of Indonesia.
Without the Principal License BPKM, foreign investors cannot obtain other necessary licenses, such as the Business License (Izin Usaha) or the Company Registration Certificate (Tanda Daftar Perusahaan/TDP).
Requirements to Obtain Principal License BPKM
Foreign investors who wish to obtain Principal License BPKM must meet certain requirements set by the BKPM. These requirements include:
- Submit a business plan that complies with the regulations of Indonesia
- Investment plan and financial projections
- Minimum investment requirement of IDR 10 billion (approximately USD 700,000)
- Commitment to comply with the laws and regulations of Indonesia
Once the application is submitted, the BKPM will review the application and the proposed business plan. The BKPM may request additional information or documents before granting the Principal License BPKM.
How to Obtain Principal License BPKM
Foreign investors who wish to obtain Principal License BPKM can follow these steps:
- Establish a limited liability company (PT PMA) in Indonesia
- Submit the application for Principal License BPKM to the BKPM, along with the required documents and investment plan
- Wait for the approval from the BKPM. The process may take up to 3 months
Once the Principal License BPKM is granted, foreign investors can proceed to obtain other necessary licenses to start their business activities in Indonesia.
Conclusion
The Principal License BPKM is an important permit for foreign investors who wish to establish a business or invest in Indonesia. It serves as a pre-requisite to obtain other necessary licenses to run a business in Indonesia. Foreign investors must meet certain requirements set by the BKPM and follow the necessary procedures to obtain the Principal License BPKM.
If you have any questions or need assistance in obtaining Principal License BPKM, you can contact our team of experts who can guide you through the process.
