Does the Establishment of Branch Office require Business…
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Does the Establishment of Branch Office require Business Identification Number?

Indonesia implements a risk-based business licensing system in accordance with Law No. 6 of 2023 concerning the Stipulation of Government Regulations in Lieu of Law No. 2 of 2023 concerning Job Creation ("Law No. 6/2023"). To support the risk-based business licensing system, the government regulates NIB. Based on article 1 number 12 of Government Regulation No. 5 of 2021 concerning the Implementation of Risk-Based Business Licensing ("PP No. 5/2021"), defines NIB as proof of registration/registration of Business Actors to carry out business activities and as an identity for Business Actors in the implementation of their business activities. Business actors who first carry out business activities need to submit NIB as a document of business legality.

To expand the business activities of a company, establish a branch office for administrative and business purposes. Considering that for the establishment of a company it is first necessary to issue an NIB, for branch offices it is not required, this is based on Article 191 PP No. 5/2021, which states that business actors only need to register administrative branch offices in the OSS system by completing the following data:

  1. address of the administrative branch office;
  2. Taxpayer Identification Number of the Administrative Branch Office; and
  3. the person in charge of the administrative branch office.

Branch office registration will later be issued through the OSS system as an attachment to the NIB. Thus, it should be emphasized that for administrative branch offices there is no need for a separate NIB.

The brief description above is an overview of the legality of branch offices. If you are interested in knowing more about it, Suria Nataadmadja & Associates Law Office can help you.