BUSINESS IDENTIFICATION NUMBER

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.

WHAT ARE BUSINESS IDENTIFICATION NUMBER (BIN) & OSS?

In this section, we will briefly discuss in detail what is Business Identification Number and what OSS is.

WHAT IS BIN?

Business Identification Number (BIN) is an obligatory unique identifier for all businesses that want to operate in Indonesia. Without Business Identification Number, all other business documents and permits cannot be issued. The possession of a Business Identification Number 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 Business Identification Number, 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.

WHAT IS OSS?

OSS is used to request and manage a business license request of a business license by business owners.

Business Identification Number 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:

  1. Facilitating the management of various business licenses, both prerequisites for doing business (permits related to location, environment, and buildings), business permits, and operational permits for business operations at the central or regional level with a mechanism for fulfilling the permit requirements commitments;
  2. Facilitating business owners to connect with all stakeholders and obtain permits safely, quickly, and in real-time;
  3. Facilitating business owners in reporting and solving licensing problems in one place;
  4. Facilitating business actors to store licensing data in one business identity (BIN).

BUSINESS IDENTIFICATION NUMBER IN INDONESIA

WHy do you need a bin?

The Business Identification Number 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 Business Identification Number?

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 Business Identification Number. Aside from that, the BIN has several other functions.

BIN at a time applies as:

  1. Company Registration Certificate (Tanda Daftar Perusahaan / TDP).
  2. Import Identification Number (Angka Pengenal Impor / API), if business actors intend to carry out import activities.
  3. Customs Access if business actors intend to carry out export and/or import activities.

Obtaining a Business Identification Number also guarantees registration as a participant in health social security and employment social security.

WHo needs a bin?

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 Business Identification Number 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:

  1. The entity or Individual NPWP, if the business actor does not have one.
  2. A Letter of Approval of Plans for Employment of Foreign Workers (RPTKA).
  3. A Proof of BPJS Employment and BPJS Health Participation Registration.
  4. A Notification of eligibility to obtain fiscal facilities.
  5. A Business Permits, for example, Business Permits in the Trade sector (Trade Business Permits (SIUP)).

WHICH LAW GOVERNS THE BUSINESS IDENTIFICATION NUMBER AND OSS IN INDONESIA?

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:

  • Provides technical guidance for the issuance of business licenses through the OSS System and serves as a legal basis for new features implemented in the newer OSS System;
  • Addressing the technical details of the requirements of the business licenses and other licenses, such as commercial or operational licenses;
  • Dividing business licenses and commercial or operational licenses into four categories, depending on the commitments the PT PMA must fulfill to activate the relevant license;
  • Changing the format of business licenses and commercial/operational licenses issued under the new regulation; and
  • Establishes the action that BKPM takes in the case of violations by PT PMA.

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.

LICENSES THAT CAN OR CAN NOT BE OBTAINED IN OSS

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:

  • Low-risk businesses;
  • Medium-risk businesses; and
  • High-risk businesses.

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:

  • Electricity sector;
  • Minerals and coal sector;
  • Oil and gas sector;
  • Public housing and public work sector;
  • Custom and taxation; and
  • Capital investment.

HOW TO GET A BUSINESS IDENTIFICATION NUMBER?

  1. Prerequisite Before Accessing OSS:

    One should have a National Identity Number (Nomor Induk Kependudukan / NIK) and input it in the process of creating a user-id. Especially for business actors in the form of business entities, the required population identity number is the ID of the person in charge of the business entity.

    Business entities in the form of PT, business entities established by foundations, cooperatives, CVs, firms, and civil partnerships should complete the process of ratifying business entities at the Ministry of Law and Human Rights through online AHU, before accessing OSS.

    Business owners of business entities in the form of Perum, Perumda, other legal entities owned by the state, public service agencies, or broadcasting institutions must prepare the legal basis for establishing a business entity.

  2. Procedure for Using OSS:

    • Create a user-id;
    • Log in to the OSS system by using user-id;
    • Fill in the data to obtain a business master number;
    • For new businesses: carry out the process to obtain basic permits, business licenses, and/or commercial or operational permits, along with the commitments; and
    • For businesses that have been established: continue the process of obtaining new business licenses (business and/or commercial licenses) that are not yet owned, extend existing business licenses, develop businesses, and change and/or update company data.

  3. OSS Account Creation and Activation:

    • For Business Entity:
      Register in the OSS system by entering the National Identity Number (NIK) of the person in charge of the business entity or the main director and some other information on the available registration form. The OSS system will send 2 (two) emails to the business entity for registration and verification of the OSS account. The verification email contains a temporary user-id and password that can be used to log in to the OSS system.

    • For Individuals:
      Individual business owners access the OSS by inputting the National Identity Number (NIK) and some other information on the available registration form. The OSS system will send two emails to individual business actors for the registration and verification of OSS accounts. The verification email contains a temporary user-id and password that can be used to log in to the OSS system.

  4. Steps to Obtain BIN:

    • Log in on the OSS system;
    • Fill in the required data, such as company data, shareholders, capital ownership, investment value, and planned use of manpower, including foreign workers. If the business owner makes use of foreign workers, the business owner agrees to the statement on the appointment of accompanying workers and will organize education and training or with the output of a statement letter;
    • Fill in the information on the business field following the 5-digit Indonesian Standard Classification of Business Fields (KBLI), in addition to the 2-digit KBLI information already available from AHU. Business actors must also include information in the description of the business field;
    • Provide a checklist as proof of approval of the statement regarding the truth and validity of the entered data (disclaimer); and
    • Once all the required information has been completed and the propriety has obtained an NPWP, the OSS Institution will issue the BIN.

HOW CAN WE HELP

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.

REFERENCES

FAQs

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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