Starting an industrial business in Indonesia? You will need an Industrial Business License (IUI). It is a legal must-have for any company involved in manufacturing or processing.
You also need key permits like the Building Approval (PBG) and Environmental Permits (AMDAL, UKL-UPL, or SPPL) to get the IUI. This guide explains what you need, why it matters, and how to stay compliant.
Why obtaining an Industrial Business License (IUI) is important
Getting an IUI is more than a legal requirement; it opens the door for growth and credibility. Here is why securing this license is essential:
Legal Compliance
The IUI ensures that your industrial operations comply with Indonesian law. Operating without it can result in penalties, forced shutdowns, or legal action, significantly disrupting your business operations and credibility.
Business Expansion
An industrial business license allows you to scale up operations, increase capacity, and apply for export licenses, supporting long-term growth.
Tax & Customs Benefits
Registered companies with an IUI may qualify for tax breaks, import duty exemptions, and other fiscal incentives from the government.
Access to Government Support
You can access government programs tailored to support industrial development with a valid business license.
Higher Business Credibility
The IUI boosts your business’s credibility, making attracting investors, partners, and financial institutions easier.
Read more: How to seamlessly obtain an Industrial Business License (IUI) in Indonesia
Key requirements for the IUI application
Before applying for an industrial business license, companies must prepare several documents, including:
- Company Legal Documents: Include your Deed of Establishment, latest amendments, and Business Identification Number (NIB).
- Location Permit: Required if your factory is outside an industrial estate.
- Proof of Building Ownership or Lease: Show your business premises’ legal ownership or lease agreement.
- Industrial Activity Plan: Provide details on your production process, machinery, materials, output, and workforce.
- Building Approval (PBG): Confirms your factory building complies with local regulations and zoning laws.
- Environmental Permits: Submit AMDAL, UKL-UPL, or SPPL based on your business’s environmental impact.
Industrial businesses need to obtain PBG and environmental permits before applying for IUI. These documents will act as foundational approvals that support your IUI application.
Building Approval (PBG)
PBG (Persetujuan Bangunan Gedung) is a license granted to building owners, replacing Indonesia’s previous IMB (Building Permit). The PBG serves several key functions, such as:
Ensures the legal status of building construction so that it operates safely per local spatial plans and zoning laws.
Ensures the construction meets standard safety, comfort, health, and user convenience.
Supports future expansions, modifications, or licensing renewals.
Key Differences between PBG and IMB
Although both PBG and IMB serve as a required license to oversee building development, they have distinct purposes:
Read more: How to establish a construction company in Indonesia
Environmental permits (AMDAL, UKL-UPL, SPPL)
An environmental permit ensures your industrial business does not harm the environment. It proves your business operations are planned with ecological management and monitoring.
The type of permit you need depends on the scale and risk of your operations:
AMDAL (Analisis Mengenai Dampak Lingkungan)
Needed for large-scale industries or those with high environmental risks, including a complete environmental impact study, expert assessments, and public involvement.
UKL-UPL (Upaya Pengelolaan dan Pemantauan Lingkungan
Required for medium-sized industries with moderate environmental impact. It focuses on how your business will manage and monitor environmental aspects like waste, emissions, and resources.
SPPL (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan)
SPPL is required for small-scale industries with low environmental impact. It is a simple declaration of commitment to follow environmental regulations.
Start your industrial businesses with InCorp
Navigating the licensing system in Indonesia can be challenging and time-consuming, especially when dealing with industrial permits. That’s where InCorp Indonesia (an Ascentium Company) comes in. We have years of experience and offer end-to-end support to help your business stay compliant, from understanding the requirements to obtaining the necessary permits.
With years of experience, InCorp offers end-to-end support to help your business stay compliant. This provides you with the reassurance and confidence you need to navigate the complex licensing system in Indonesia.
- Business License: We care for IUI and PBG, ensuring all documents are complete and submitted correctly.
- Environmental Permits: Our experts will guide you to the proper permits and handle the paperwork, whether AMDAL, UKL-UPL, or SPPL.
Contact us today and trust us to provide a fast, reliable, and fully compliant licensing process. Do not let the licensing process keep you.
Frequently Asked Questions
Why is obtaining an Industrial Business License (IUI) important?
An IUI ensures your industrial operations comply with Indonesian law, supports expansion, and boosts your company’s credibility.
What benefits come with having an IUI in Indonesia?
It allows business growth, access to tax and customs incentives, government support, and increased trust from investors and partners.
What is a PBG, and how is it different from IMB?
PBG (Building Approval) replaces IMB and applies before, during, and after construction, requiring detailed technical and safety compliance.
Why are environmental permits like AMDAL, UKL-UPL, and SPPL required?
They ensure your industrial activities are environmentally responsible and follow Indonesia’s ecological regulations.
How do I know which environmental permit my business needs?
Large-scale industries need AMDAL, medium ones require UKL-UPL, and small businesses with minimal impact must submit an SPPL.
Get in touch with us.
What you'll get
A prompt response to your inquiry
Knowledge for doing business from local experts
Ongoing support for your business
Disclaimer
The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.
We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.
Verified by
Ales Cina
Consulting Manager at InCorp Indonesia
Aleš manages solution delivery at InCorp Indonesia, optimizing incorporation processes and client relationships. His experience in internal auditing, retail, and sales offers valuable global insights. Aleš, with a degree in Economics and Finance from the Czech Republic, helps clients navigate cross-border business challenges, focusing on cultural and legal insights.
