After knowing the form and understanding the contents of a deed of establishment and the Business Identification Number (NIB) as an official identity of business actors issued by the Ministry of Investment / BKPM, there is an important matter in the NIB that must be paid attention to, namely the declaration of the Indonesian Standard Business Field Classification (KBLI) following the business field that business actors will carry out.
This article will discuss how to choose the right KBLI code according to the business you are running!
Definition
KBLI is a classification created by the Central Bureau of Statistics (BPS) in the form of a numeric line code that serves as a reference for business actors to classify their business activities in Indonesia. KBLI is officially recognized by every authorized agency (institution) related to each business activity.
Legal Basis and Full Appendix of KBLI
The KBLI currently prevailing is the 2020 KBLI, which has been in effect since the enactment of BPS Regulation No. 2 of 2020 concerning the Indonesian Standard Business Field Classification on 15 September 2020.
KBLI is important for business actors in the licensing process as the legality of their business activities. Therefore, selecting the KBLI code also determines the level of risk of business activities, licensing and obligations that apply to business actors following Law No. 11 of 2020 on Job Creation.
Read More: How to determine KBLI based on Risk-Based Analysis on the OSS?
Imposition of Administrative Sanctions
The company is subject to administrative sanctions if the KBLI code chosen by the business actor does not match the business activity carried out following Government Regulation Number 5 of 2021 concerning the Implementation of Risk-Based Business Licensing (PP 5/2021) in the form of:
- Warning;
- Temporary suspension of business activities;
- Revocation of business licenses;
- Imposition of administrative fines;
- Imposition of police coercion;
- Revocation of Licence/Certification/Approval.
How to Choose the Right KBLI Code for Your Business?
To avoid sanctions, business actors must choose the right KBLI for their business continuity. The following are the steps in selecting the right KBLI:
- Matching KBLI with Business Models
It is important for Business actors to understand the business model they are running since KBLI categorizes business activities based on the business model being run. Examples of business models are production/industrial, trade, and others.In general, the industrial business model is a business model in which the activities involve production/manufacturing in Indonesia, while the trading business model is a business model in which the activities involve the sale of goods involving export and import activities.For example, a principal company in Turkey intends to establish a company in Indonesia in which the activities are to market and sell goods produced by its principal company (no production activities in Indonesia). So, the right KBLI for the Company established in Indonesia is the Trade KBLI.
- Matching KBLI with the Type of Goods or Services Offered
After understanding the business model, the next step is to choose a KBLI code based on the type of goods or services being provided. For example, PT A intends to manufacture toothpaste in Indonesia, so the right KBLI code is 20232 for the Cosmetics Industry for humans, Including Toothpaste. - Matching KBLI with the Distribution Process (for Trading business model)
This matching is necessary because there are differences in the KBLI between Wholesale Trade and Retail Trade. Wholesale trade is a type of trade that goes through an indirect distribution process to end consumers. Large trade can be characterized by the export-import process. Meanwhile, retail trade employs a direct-distribution process to end consumers.NB: Please note that these two types of KBLI cannot be used in one business.Once the deed of establishment has been validated and the company’s NIB with suitable KBLI has been issued on the Online Single Submission-Risk Based Approach (OSS-RBA) page, the business cannot immediately operate legally. However, it is necessary to further comply with the standard certificate for each KBLI, depending on the level of business risk.
Read More: PMDN VS PMA
Contact Us
To ensure that the initial steps of establishing a company like KBLI Code selection until the company’s business operations can run well and smoothly, please contact us via the WhatsApp hotline, email address, and our other channels to consult further with our consultants about the company establishment process and business operations according to the right KBLI code!
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ET Consultant is a Business Consultant and Legal Consultant Expert that provides support for local and multinational clients to start and manage their business operations in Indonesia. ET Consultant specializes in Business Incorporation, Licensing & Legal, Accounting & Taxes, Immigration, and Advisory Services.
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