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.