Does Producer Requires Trading Business License to Trade its own Products?

As based on Government Regulation No. 5 of 2021 concerning the Implementation of Risk-Based Business Licensing ("PP No. 5/2021"), Indonesia has implemented Risk-Based Business Licensing, the Trading Business License ("SIUP") is no longer valid. SIUP has been replaced with Business Identification Number ("NIB"). NIB is proof of registration/registration of Business Actors to carry out business activities and as an identity for Business Actors in carrying out their business activities.

The function of SIUP is a license to be able to carry out trading business activities, which is usually required for companies that want to trade. For Industrial/Factory companies that aim to sell their own production goods, based on Article 56 of Government Regulation No. 29 of 2021 concerning the Implementation of the Trade Sector ("PP No. 29/2021") it is stated that:

"In selling Goods, Producers do not need to have a Business License in the field of Trade."

Given that SIUP is no longer regulated in the latest regulation and has been replaced by NIB. Thus, for factory or industrial producers who are producers, they must have NIB and be able to sell their own goods without having a Business License in the field of Trade.

The brief description above is an overview of the updated provisions regarding the trading activities of Producers. If you are interested in knowing more about it, Suria Nataadmadja & Associates Law Office can help you.