Announcement To Adjust Company’s Business Activities With The Applicable KBLI[1]

On 11 October 2018, the Ministry of Law and Human Rights (“MOLHR“) and the Ministry of Economic Coordinator (“MEC”) issued a joint announcement (“Announcement”). The Announcement requires every Indonesian company (including local and foreign investment company) to adjust the wording of its business activities recorded in the Legal Entity Administration System (Sistem Administrasi Badan Hukum “Sisminbakum”) of the MOLHR with the applicable Industrial Standard Classification Code (Klasifikasi Baku Lapangan Usaha Indonesia “KBLI”). On the date of this Circular Letter, the KBLI is regulated under the Head of Central Bureau of Statistic Regulation No. 95 of 2015 on the Indonesian Industrial Standard of Classification Code, as lastly amended by the Head of Center Bureau of Statistic Regulation No. 19 of 2017.

The Announcement further states that to adjust the wording of a company’s business activities in the Sisminbakum, the company should first amend the wording of its business activities in Article 3 (on Purpose and Objective) of its articles of association (“AOA”) to be in line with the wording of business activities under the applicable KBLI.

The Announcement stipulates that above obligation must be completed within one year after the issuance date of a company’s Business Identification Number (Nomor Induk Berusaha “NIB”); otherwise, the NIB will be automatically suspended. In practice, in addition to the suspension of the NIB, we heard from some companies that any application to the Sisminbakum also cannot be submitted until the Article 3 of the company’s AOA is amended and the company’s business activities recorded in the Sisminbakum is adjusted.

With the above, the government wants to ensure that:

• a company’s business activities recorded in the MOLHR’s system is in line with the company’s business activities recorded in the Online Single Submission system
• foreign investment companies (Penanaman Modal Asing “PMA”) are only conducting business activity(ies) that are open for PMA. The government has found out that Article 3 of many PMAs’ AOA state a number of business activities to be conducted by those PMAs, including the business activities that are closed to PMAs.

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Do let us know if you need to fulfill the above obligation, or if you have any questions regarding the above Announcement. You may contact our Partner, Hamdi, at: s.hamdi@b-av.co. We are happy to help.

Best regards

BATAVIA ADVOCATORUM (B.Av)

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