KBLI 2020 is the newest version of the KBLI that officially applies on the online system on the 3rd of August 2021. Before the change, all entrepreneurs must refer to KBLI 2017 when establishing a company. KBLI itself stands for ‘Klasifikasi Baku Lapangan Usaha Indonesia’ or otherwise, the classification for business fields in Indonesia. The function of this classification is to create standardised business categories for businesses. In turn, the standard serves as a reference for the company decree documents.

    In the newest KBLI 2020, entrepreneurs will find that there are subtle changes within the content. Although it does not apply to all sorts of industries, some undergo significant changes. It is especially true for foreign investment companies and their ownership percentage.

    Using KBLI to find Business Codes

    Understanding the function of the classification standard in the KBLI 2020 document is essential for entrepreneurs. Not just local entrepreneurs, but more so for foreign investment companies. The reason is that, in Indonesia, there are limitations on the amount of capital foreign nationals or companies can own in a company. To identify them, entrepreneurs must first know their business codes.

    Within KBLI 2020 itself, there is information regarding each classification in detail. Entrepreneurs who are unsure if their business falls into which category can easily find explanations written in the document. Compared to the previous KBLI, the newest version is much more helpful for entrepreneurs to read. Not only are the documents better designed for an easier read, but the flow of the content is also fluid.

    To use this document, entrepreneurs need to understand what kind of business they plan to do in Indonesia. In total, entrepreneurs can choose up to 5 KBLI codes. Within the KBLI 2020, the business categories are divided using the Alphabet. This makes it easier for entrepreneurs to narrow down their businesses. Once they found the correct Alphabet, they need to find the number that represents their business.

    These numbers are displayed in table format and also consists of an explanation regarding the business. For instance, what sort of activities they can partake, what kind of items they can sell, and so on. From the information on the business activities, entrepreneurs will know if there are any activity prohibitions within the business code.

    KBLI 2020 and Presidential Order Number 10 2021

    Once the entrepreneur has selected the appropriate KBLI codes, they need to cross-reference the code with the Presidential Order. Similar to the KBLI 2020, the newest Presidential Order was also recently applied to the online system. Within the document, entrepreneurs can find which business categories are open for foreign investments fully or partially. Compared to the previous Presidential Order number 44, the current Presidential Order has many leniencies towards foreign investments.

    This is under the government’s plan to invite more foreign investments to the country. The reason the government does this is to create more job fields, transfer knowledge, as well as to increase the GDP of the country. Furthermore, foreign investments play an important part in helping suburban areas to develop. This scene is quite common in the Central Java area. With more foreign companies building factories there, the area that was previously underdeveloped is now able to build proper roads and public facilities.

    In addition, within the newest Presidential Order, business categories like Supermarket which was initially off-limits for foreign investments are now available. Unlike the KBLI 2020 and current Presidential Order, the closest thing to a supermarket that foreign investment can own is a department store. Even then, foreign investment can only own up to 67% of the PT PMA owning the business. However, now that the policy changes, foreign investments can fully own a supermarket. The only extra requirement is to engage in local UMKM.

  • How do Covid-19 Affect Micro Businesses in Indonesia?

    Micro Businesses in Indonesia experience many negative impacts ever since the COVID-19 pandemic strikes hard on the country. The government sets partial lockdowns to get control over the virus spread. These partial lockdowns only allow the essential business to operate fully while others must operate with the minimum employee or stop their operations. With the pandemic dragging on, the Micro Businesses begins to die down.

    Micro Businesses in Indonesia and their Struggles

    Unfortunately for the country, Micro Businesses in Indonesia occupies the majority of business entities in the country. When the pandemic hits Indonesia, many businesses struggle to sustain the bleak economy. The bad economy has forced many entrepreneurs to close their companies, which increases the unemployment rate.

    Furthermore, the population no longer engages in active buying and selling, which causes a stagnant economy. To give incentives for the people to spend, the government tries to disburse aid funds to Micro Businesses. The plan is not working as the covid-19 pandemic continues to ravage the country. Day by day, more businesses continue to close down as more people are left unemployed.

    Furthermore, the government has also imposed a rule to stop export and import. While the government means well by this regulation, it affects microbusinesses badly. Companies that rely on trading their goods can no longer continue their activity. The businesses are forced to stop their operation since they cannot compete in the market. Furthermore, the buying market that was once a large pool is now a small pool with too many fishermen.

    The Impact Towards the Economy

    With the largest business proportion facing a direct hit, the country’s economy plunges further. As the Micro Businesses in Indonesia faces a rapid decline, larger businesses also face the threat of bankruptcy. Multinational companies begin to shut down their operations one by one. Small and medium companies, that managed to sustain their business for the first year of the pandemic begins to be shaken down.

    Unlike microbusinesses, the government does not extend aid funds to those businesses. One by one they disappear and the number of unemployed increases even higher. The deaths of these companies result in an oversupply of human resources as jobs are declining, demands are much lower than supplies, and poverty level skyrockets. It is a nightmare for any economist.

    To add salt to the injury, the Indonesian government does not have enough funds to support their local businesses. Unlike other neighbouring countries, to support the local economy, their government provides subsidies. The businesses that experience profit loss during the pandemic receives subsidies from the Government. These aids allow companies to run and the economy to sustain at a certain level.

    Solution for Businesses in Indonesia

    On the other hand, Indonesia is facing a larger socio-economic problem. The people have become restless from the ongoing pandemic and the lack of income. More people fall to starvation. The only way for everything to return to normal is if the country and its people can beat the virus. To do that, there is a huge need for cooperation between the government and its people. The government needs to handle medication, vaccines, and the health system correctly while the citizens must obey the rules and regulations.

    If both parties manage to uphold their parts, Micro Businesses will be able to bloom again. That means a decrease in the unemployment rate and an increase in spending. This situation will be beneficial to the whole economy of the country.

    Another effective solution for existing Micro Businesses is to use modern office solutions like MESO Serviced and Virtual Office. Entrepreneurs can either choose to rent a Virtual Office or a Serviced Office. Find out more about the products through our website. Alternatively, contact us on our Whatsapp number at +62812-1315-4189.

  • How to Start a Business in Indonesia

    To start a business in Indonesia requires a lot of preparation to be made. Before engaging a company setup service, entrepreneurs must determine the kind of business they want to do. Entrepreneurs cannot change their decision about the business model after the company is established. This is because Indonesian law states that each company can only have five business codes. These codes will determine which industries the business can do.


  • What Kind of Office That You Need to Pick?

    The kind of office that you need depends on the entrepreneur and the business. Some entrepreneur prefers to work mobile while some other don’t. Then again, it also depends if the nature of the company allows the entrepreneur to work remotely. For instance, if the entrepreneur works as a representative office, then a physical office is a must. On the other hand, if the entrepreneur is doing a digital marketing service, they only need an address to register their business.


  • What to do: Choosing a Serviced Office or Virtual Office?

    Choosing serviced office or virtual office may be one of the biggest considerations for entrepreneurs looking to acquire a business address. These two options are the modern solution for office rental as they are affordable and simple. Entrepreneurs get to enjoy a variety of office facilities without having to worry about office setup.


  • The Requirement to Start a Business in Indonesia

    Start a business in Indonesia is not difficult as long as entrepreneurs have good preparation. The difficulty rate of company establishment depends on the type of industry the company is applying to. For general business purposes that require no special permit, it is relatively easy. Companies only need to prepare capital and identification documents.


  • Things You Must Know to Rent an Office in Jakarta

    Office in Jakarta is a popular demand amongst entrepreneurs, both local and foreign. In recent years, the amount of foreign investment in the country increases constantly. Therefore, the need for office is higher. The option for office locations also varies within the city. Some entrepreneurs prefer to work from Central Jakarta, while others prefer to work in the hub of West Jakarta.


  • Why APL is Deemed as the Best Location to Rent an Office?

    The best location to rent an office in Jakarta can generally be seen from the busy business areas of the city. When discussing business areas, it is natural to think about Central Business Districts. In Jakarta, one of the most popular CBD areas lies in the western part of the city. In the heart of the area is APL Tower, a premium grade A office building.


  • Best Way to Choose an Office for Rent in Jakarta

    Office for rent in Jakarta has a lot of options in the Capital City. Capital City is no stranger to foreign investments and has seen an increasing number of foreign businesses. A lot of foreign companies invest in industries like factories, refineries, and mining. They also invest in service industries. To operate in the country, these companies need to choose an office for rent or buy in Jakarta.


  • Virtual Office for Rent in Jakarta and Considerations

    Virtual Office for rent has a lot of alternatives in Jakarta. Since the past few years, there has been an increase in the number of providers. These providers initially start with coworking services but soon changes their business model to virtual office providers. The companies are usually from both local and foreign companies.

    The new increase in these new players brings about various changes. For one, the price of a virtual office for rent has become too vast. Before the entrance of the new players in the market, virtual office providers chooses locations based on their prestige. Today, a lot of virtual office providers are not even in the business areas of the city.