Category: Business Establishment & Licenses
Written by Rivary Finan Hernawan on 10/05/2022
The author’s views are entirely their own and may not always reflect the views of Putranto Alliance.
Business Identification Number (BIN / Nomor Induk Berusaha / NIB) refers to a number uniquely assigned to businesses to identify them. It is issued by the OSS Institution.
While it seems unlikely, there is still a chance for two businesses having the same name, which will make recording and bookkeeping complicated. Therefore, an identification number is important, as those numbers are uniquely assigned to every business. Using that number as the differentiator, one business cannot be confused with the other.
With this service, we will help you to obtain your unique Business Identification Number in Indonesia.
In this section, we will briefly discuss in detail what is Business Identification Number and what OSS is.
Business Identification Number (BIN) is an obligatory unique identifier for all businesses that want to operate in Indonesia. Without BIN, all other business documents and permits cannot be issued. The possession of a BIN allows the IRS and other governmental agencies to regard our business as a legally organized business.
According to the Ministry of Investment/Indonesia Investment Coordinating Board (BKPM), a Business Identification Number or Nomor Induk Berusaha is a number required to start a business in Indonesia. It is issued by the OSS (Online Single Submission) system managed by the Ministry of Investment/Indonesia Investment Coordinating Board after businesses have completed their application through the OSS system. The process of issuing a Business Identification Number is regulated under the Government Regulation No. 24 of 2018 concerning Electronically Integrated Business Licensing Services.
To obtain a BIN, business owners must first complete their registration by filling in all the required information. Once completed, a thirteen-digit random number that is secured and accompanied by an electronic signature will be given to them.
OSS is used to request and manage a business license request of a business license by business owners.
BIN is issued by the OSS Institution after the business owner registers their business. It must be owned by the business owner who wants to take care of business licensing through OSS, new businesses, and businesses that have been established before the operation of OSS.
The main function of the OSS system are as follows:
The BIN is very useful as it has many functions that are needed by a business. So, what are the functions, and why do we need a BIN?
The main function of an BIN is to act as identification for businesses, both individual and non-individual. Businesses can apply for a Business License and a Commercial or Operational Permit once they have a BIN. Aside from that, the BIN has several other functions.
Business Identification Number at a time applies as:
Obtaining a BIN also guarantees registration as a participant in health social security and employment social security.
BIN must be owned by the owner who intend to take care of business licensing via the OSS system, new businesses, or businesses that have been established pre-OSS system.
To start a business in Indonesia, business license must be acquired first. The reason is that we need to inform the government about our legal business activities. However, we need BIN in order to obtain a business license. Hence, BIN is compulsory for any company who want to start a business in Indonesia.
Business owners can obtain other registration documents during the registration of Business Identification Number, namely:
The implementation of Risk-Based Business Licensing through the Online Single Submission System (OSS) is the implementation of Law Number 11 of 2020 concerning Job Creation.
BKPM Regulation Number 1 of 2020 focuses on the following points:
Risk-Based OSS must be used by Business Owners, Ministries/Institutions, Regional Governments, Special Economic Zone Administrators (Kawasan Ekonomi Khusus / KEK), and Free Port Free Trade Areas (Kawasan Perdagangan Bebas dan Pelabuhan Bebas / KPBPB). Based on Government Regulation Number 5 of 2021 there are 1,702 business activities consisting of 1,349 Indonesian Standard Classification of Business Fields (Klasifikasi Baku Lapangan Usaha Indonesia / KBLI) which have been implemented in the Risk-Based OSS System.
Through law Number 11 of 2020 concerning job creation (UU Cipta Kerja), the government encouraged investment through easy business licensing for investors. So far, overlapping issues in business licensing between central and regional authorities and ministries/agencies have made the licensing process difficult for investors. Not only does it take a long time, but potential investors also must go through a protracted process.
Based on the scale of the potential hazards a business might cause, the government categorized businesses into these three classifications, according to Government Regulation Number 5 of 2021 on Risk-Based Business Licensing:
While OSS provides easy access to obtain business licenses, some higher-risk sectors might still require business owners to obtain the corresponding sector’s license via conventional methods.
The sectors with licenses that cannot be secured through OSS include the following:
Putranto Alliance assists local and foreign entities to set up their business in Indonesia and obtain all necessary documents and permits to allow for immediate operation. Our knowledge of foreign investment restrictions and business classifications in Indonesia will help in ensuring a smooth process.
While they serve the same purpose based on functionality, some riskier business services, such as financial business, may strictly require a business license instead of a BIN. However, BIN itself is sufficient for lower-risk businesses, such as when you want to run a cafeteria.
Yes, BIN is issued for the head office. So, one company only needs one BIN.
With the enactment of PP 5/2021, SIUP has become part of the business licensing for the trade sector. If business activities in the trading sector are included in the low-risk level, the BIN becomes legality to carry out business activities without the need to have a SIUP. Thus, if the SIUP of a business actor has expired, what needs to be done is to apply for a business license following the level of risk of business activities.
If necessary, medium-risk business activities require product standardization and high-risk business activities require compliance with business activity standards and/or product standards. According to Article 200 paragraph 1 and Article 205 paragraph 1 PP 5/2021.
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putranto@putranto-alliance.com
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