Starting an industrial business in Indonesia? You will need an Industrial Business License (IUI). It is a legal must-have for any company involved in manufacturing or processing.
You also need key permits like the Building Approval (PBG) and Environmental Permits (AMDAL, UKL-UPL, or SPPL) to get the IUI. This guide explains what you need, why it matters, and how to stay compliant.
Getting an IUI is more than a legal requirement; it opens the door for growth and credibility. Here is why securing this license is essential:
The IUI ensures that your industrial operations comply with Indonesian law. Operating without it can result in penalties, forced shutdowns, or legal action, significantly disrupting your business operations and credibility.
An industrial business license allows you to scale up operations, increase capacity, and apply for export licenses, supporting long-term growth.
Registered companies with an IUI may qualify for tax breaks, import duty exemptions, and other fiscal incentives from the government.
You can access government programs tailored to support industrial development with a valid business license.
The IUI boosts your business's credibility, making attracting investors, partners, and financial institutions easier.
Read more: How to seamlessly obtain an Industrial Business License (IUI) in Indonesia
Before applying for an industrial business license, companies must prepare several documents, including:
Read more: Build your mining environmental compliance with SMKP certification
Industrial businesses need to obtain PBG and environmental permits before applying for IUI. These documents will act as foundational approvals that support your IUI application.
PBG (Persetujuan Bangunan Gedung) is a license granted to building owners, replacing Indonesia's previous IMB (Building Permit). The PBG serves several key functions, such as:
Ensures the legal status of building construction so that it operates safely per local spatial plans and zoning laws.
Ensures the construction meets standard safety, comfort, health, and user convenience.
Supports future expansions, modifications, or licensing renewals.
Although both PBG and IMB serve as a required license to oversee building development, they have distinct purposes:
| Criteria | IMB | PBG |
| Purpose | Only before construction | Applies before, during, and after construction |
| Legal Basis | Mostly local regulations | National laws (Regulation No. 16 of 2021) |
| Required Documentations | Basic architectural & administrative plans, less technical detail | Detail technical plans (RTB), structural safety, functionality, environment, input from professionals |
| Monitoring | Limited oversight after issuing the permit | Continuous checks and compliance monitoring |
Read more: How to establish a construction company in Indonesia
An environmental permit ensures your industrial business does not harm the environment. It proves your business
operations are planned with ecological management and monitoring.
The type of permit you need depends on the scale and risk of your operations:
Needed for large-scale industries or those with high environmental risks, including a complete environmental impact study, expert assessments, and public involvement.
Required for medium-sized industries with moderate environmental impact. It focuses on how your business will manage and monitor environmental aspects like waste, emissions, and resources.
SPPL is required for small-scale industries with low environmental impact. It is a simple declaration of commitment to follow environmental regulations.
Read more: Exploring Indonesia's potential in the ASEAN blue economy
Navigating the licensing system in Indonesia can be challenging and time-consuming, especially when dealing with industrial permits. That's where Ascentium Indonesia comes in. We have years of experience and offer end-to-end support to help your business stay compliant, from understanding the requirements to obtaining the necessary permits.
With years of experience, Ascentium Indonesia offers end-to-end support to help your business stay compliant. This provides you with the reassurance and confidence you need to navigate the complex licensing system in Indonesia.