Every foreign investor should adjust their businesses’ activities, purposes, and goals to comply with the KBLI. KBLI stands for Klasifikasi Baku Lapangan Usaha Indonesia or Indonesia Standard Industrial Classification. This classification quality is mandatory.
KBLI is issued by the Coordinating Ministry for Economic Affairs, the Ministry of Law and Human Rights, and the Directorate General of General Legal Administration. So, what is KBLI in Indonesia, how to check KBLI, and where to find KBLI? Keep reading to learn the answers.
What is KBLI in Indonesia?
Foreign investors, who wish to establish their business overseas, have to make sure that their business activities comply with the regulations and laws of the host country. Not to mention Indonesia. To set up a business and company in Indonesia, foreign investors must make sure that their businesses are classified under KBLI Indonesia.
But, what’s the definition of KBLI in Indonesia?
Indonesia Standard Industrial Classification or KBLI is a system or procedure published by BPS to classify the economic activities in Indonesia into different business areas. The segmentation is based on the services and goods that are manufactured and produced by the company.
This business activities classification is referred to the International Standard Industrial Classification of All Economic Activities (ISIC), East Asia Manufacturing Statistics (EAMS), and ASEAN Common Industrial Classification (ACIC) and is arranged by Badan Pusat Statistik (BPS) or Indonesia’s Central Statistic Agency.
Understanding KBLI Indonesia and its registration process might be confusing for foreign investors. Therefore, read on to learn the fundamental principle of KBLI and how to decide the correct KBLI for your business activities.
The Importance of KBLI
For future investors in Indonesia, understanding all types of business on KBLI is very important. To know deeper about the classification, you can refer to the KBLI as specified in the Appendix of BPS Reg. No. 2/2020.
KBLI is not only paramount to determining the business fields but is also important as a reference for the Indonesian government to provide investors with required legal documents like Taxpayer Identification Number (NPWP), Business Identification Number (NIB), Trading Business License (SIUP), and more.
If your business activities are different from the classification cited in the KBLI certificate, some problems might occur. Investors might seek a special permit under KBLI. Importing and exporting goods are examples of business activities that require a KBLI permit.
Every business area has its own KBLI code, which will be listed in the AoA of the company. That is why choosing the right classification that matches your business activities is crucial. Not only facing problems, randomly picking the wrong categorization might impact the forced closure by the Indonesian government.
The Structure of KBLI
Referring to the ISIC, ACIC, and EAMS, the 2020 KBLI code Indonesia consists of five digits. The structure of the KBLI number under Badan Pusat Statistik (BPS), or Indonesia’s Central Statistic Agency, is as follows:
The first digit describes a digit of alphabetical code and shows the main line of the classification of economic activities.
The second digit describes the business section, the number of main classifications according to their respective characters. Each main classification is in the form of two digits of numeric codes.
The third is the category which consists of three digits of numeric codes. The first two digits show the main categories and relate to the last numeric digit. This last digit shows the economic activity of each category related.
Further description is a sub-category of the main category’s economic activity. This sub-category contains four digits of numeric codes. The first three-digit numbers are the category concerned, and the last digit number is the economic activity of the sub-categories concerned.
The last description aims to classify the economic activities included in the sub-category into some activities which are more correlative according to certain fields. The group description contains five digits of numeric code. The first four-digit numbers are the sub-category concerned, and the last digit number shows the economic activity of the groups concerned.
For example, if your business activity is related to fruits, the KBLI code Indonesia is 46312, part of Section G concerning wholesale and retail trade. Digit numbers 4 (four) and 6 (six) indicate the main category of the KBLI.
Meanwhile, the third digit number, namely 3 (three), shows the wholesale trade category of beverages, food, and tobacco. The fourth digit, 1 (one), indicates the sub-category of an extensive trade in agricultural food and beverage ingredients. The last digit, which is 2 (two), shows the group concerned with a big trading activity of fruits as the last consumption.
How to Choose the Right KBLI for Your Business?
There are three important steps to know how to check KBLI the right way. The three steps are:
Refer to the OSS
Use the Online Single Submission (OSS) system to identify the ideal category for your business activities. Presently, OSS has 21 business activity fields (starting from A to U), and each field contains its own set of industries.
For example, is the manufacturing category. This category has several specific sub-groups, namely textile manufacturing, beverage manufacturing, footwear manufacturing, food manufacturing, tobacco manufacturing, and more.
Describe Your Business Main Group
There is always a main business group in every business field. A footwear manufacturing, for example. This category belongs to code 152 from Category C.
Get Your Five Digits KBLI
Grouping the investors’ company to their core business activity is important. Let’s take the same example above. Footwear manufacturing is the main category. The sub-categories could be industrial activities’ footwear, daily use footwear, sports activities footwear, and more.
So, how do you ensure you have chosen the right KBLI code in the Indonesia category for your business? Rely on InvestInAsia. Expertise in many legal business affairs with a comprehensive business solution, InvestInAsia offers advice and helps you, not only for choosing KBLI, but for registering your business licenses and permits too.