Indonesia Standard Industrial Classification
Updated: Jun 1, 2020
If you have read my previous blog post about Indonesia Negative Investment List, you would probably then ask about Indonesia Standard Industrial Classification, or in Indonesian called as Klasifikasi Baku Lapangan Usaha Indonesia/KBLI. How do you know which KBLI that will cover your business? How if you thought that you already chose a certain KBLI for your business, but it is incorrect? Do not worry; everything is under control when you are convinced about what KBLI is and why it is essential.
What is KBLI?
KBLI is one of the standard classification published by the Indonesia Centre of Statistics, or in Indonesian called as Badan Pusat Statistik/BPS, for economic activities. In line with increasingly diverse and detailed of the economic activities development, it is necessary to improve KBLI. In 2015, BPS revised KBLI through the discussion with other related agencies, as well as intensify the socialization of KBLI in the scope of internal and external BPS. KBLI 2015 is a refinement of KBLI 2009 and still refers to the International Standard Industrial Classification of All Economic Activities (ISIC) Rev. 4. The ISIC is published by the United Nations of Statistical Division (UNSD) in 2008 up to the level of 4 digits. At the 5-digit level, KBLI 2015 adapted to the conditions of economic activity in Indonesia.
Any recent updates about KBLI?
Recently, KBLI 2015 has been amended. The reason behind this change is that the newly established OSS online licensing system uses the KBLI 2017 while another institution used KBLI 2015 in their system. However, there are only minor differences between the 2015 and 2017 KBLIs. For example, the changes in the KBLI 2017 include the division of web portal businesses into "Non-Commercial Web Portal and/or Digital Platform Businesses" and "Commercial Web Portal and/or Digital Platform Businesses".
Why KBLI important?
KBLI is essential to help you in determining your business activities. While some KBLI can be owned 100% by foreigners, many of them are in the Negative Investment List and therefore prohibit foreign ownership. However, you need to be aware of which KBLI that you chose for your business as sometimes business activities fall under several KBLI's.
Furthermore, the Indonesian Ministry of Law and Human Rights (MOLHR) and the Coordinating Ministry for Economic Affairs issued Online Single Submission (OSS) system in 2018 - see OSS blog post. According to the announcement, limited liability companies, or in Indonesian called as Perseroan Terbatas/PT, that was established or expanded their lines of business under the KBLI 2015 have one year from the time of the announcement to amend lines of business in accordance with the KBLI 2017. Failure to comply with this requirement before the one-year deadline expires will result in the suspension of the PT's Business Identification Number, or Indonesian called as Nomor Induk Berusaha/NIB.
Any impacts on the changes of KBLI to the PTs?
Companies with lines of business that remain unchanged under the KBLI 2017 should not be affected by this requirement. When your business activities fall under several KBLI's, ask your consultant to advise you which KBLI would be the most convenient for the incorporation process. Sometimes the changes in the KBLI may need to be further discussed with related government institutions. This process is not necessary unless the KBLI is required to be clarified for other procedures, including the submission of tax holiday applications. If the KBLI chosen needs to be changed, PTs should adjust their lines of business by amending their Articles of Association and reporting the amendment to the MOLHR online system through a notary. Therefore, you don't need to pay to other than the notary regarding the changes in the KBLI. If you have any questions or would like to know more, please contact us here.
Indonesia Investment Coordinating Board (BKPM), http://www.bkpm-jpn.com/en/indonesia-standard-industrial-classification-and-negative-investment-list/
SSEK Indonesian Legal Consultants, http://www.mondaq.com/x/777440/Corporate+Commercial+Law/Licensing+in+the+Indonesian+Construction+and+Projects+Sector