How to Extend a Business License Legally and Safely

Business licensing in Indonesia is not a one-time process. To continue operating legally, companies must renew their business licenses according to government regulations. Failure to do so can lead to fines, operational disruptions, and even closure.

This article provides a detailed guide on which licenses require renewal, how the renewal process works, and common mistakes to avoid.

Why Business License Renewal Matters

In Indonesia, business licenses are issued with validity periods, particularly for sector-specific permits. Renewal ensures that businesses remain:

• Legally compliant with Indonesian law. 
• Eligible for contracts, tenders, and partnerships. 
• Protected against legal sanctions or penalties. 
• Trusted by clients, banks, and regulatory authorities. 

With the introduction of the Online Single Submission (OSS) risk-based licensing system under Government Regulation No. 5 of 2021, some licenses are automatically valid as long as the business remains compliant. However, many sectoral permits still require periodic renewal.

Licenses That Require Renewal in Indonesia

Not all business permits need renewal, but the following commonly do:

1. Stay Permits for Foreign Workers (KITAS/KITAP)

• Foreign employees require valid residence and work permits. 
• KITAS is usually valid for 6 months to 2 years and must be extended before expiry. 

2. BPOM License

• Required for food, beverages, cosmetics, and pharmaceutical products. 
• Must be renewed to ensure ongoing compliance with safety and distribution standards. 

3. Environmental Permits (UKL-UPL/AMDAL)

• Businesses with potential environmental impact must periodically update their permits, especially if expanding operations. 

4. Tourism and Hospitality Licenses (TDUP)

• Hotels, restaurants, and travel-related businesses must extend their permits to remain operational. 

5. Alcohol Distribution License (SIUP-MB)

• Distributors and retailers of alcoholic beverages must renew licenses in accordance with government regulations. 

6. Trademark Protection

• Trademarks in Indonesia are valid for 10 years and must be renewed to maintain protection. 

How to Extend a Business License Legally and Safely

The renewal process depends on the license type, but the general procedure is as follows:

Step 1: Prepare Required Documents

• Valid identification (passport or KTP). 
• Existing license copy. 
• Updated business domicile or office address certificate. 
• Financial records (e.g., recent bank statements). 
• Sector-specific requirements (e.g., product samples for BPOM renewal). 

Step 2: Submit Application via OSS

• Log into the OSS system. 
• Select the renewal option and upload supporting documents. 
• Pay applicable administrative fees. 

Step 3: Verification and Review

• Authorities review the submission. 
• Additional inspections may be required for certain sectors, such as environmental compliance or health product safety. 

Step 4: Issuance of Renewed License

• Once approved, the renewed license is issued electronically or in physical form, depending on the type. 

Estimated Timeline and Costs

• Processing Time: On average, renewals take 10–20 working days, but this can vary. 
• Cost: Renewal fees typically start at IDR 10,000,000 for consultancy services, plus government fees specific to each license. 

For example:

• BPOM renewal may include laboratory testing fees. 
• Trademark renewal requires official payment to the Directorate General of Intellectual Property. 

Common Mistakes to Avoid

Many businesses face difficulties during renewal due to common errors. Avoid these pitfalls:

1. Missing Renewal Deadlines

• Applying after the expiry date may result in penalties or require re-application from the beginning. 

2. Incomplete Documentation

• Missing financial statements, incorrect domicile certificates, or outdated identification can delay approval. 

3. Assuming Automatic Renewal

• Not all licenses are automatically extended under OSS. Always confirm requirements with relevant authorities. 

4. Ignoring Sectoral Compliance

• Businesses often fail inspections due to inadequate environmental reports or expired health certifications. 

5. Not Updating Business Data

• Changes in shareholders, office addresses, or business activities must be reported before renewal. 

Best Practices for Smooth License Renewal

• Track Expiry Dates: Maintain a compliance calendar to monitor deadlines. 
• Start Early: Begin the renewal process 2–3 months before expiry. 
• Consult Experts: Engage professional consultants to navigate complex requirements. 
• Maintain Records: Keep consistent financial, tax, and operational documentation. 
• Stay Updated: Regulations may change; check the latest requirements with government agencies. 

Conclusion

Renewing a business license in Indonesia is a crucial step in ensuring legal compliance, operational continuity, and business credibility. By understanding which licenses require renewal, following the official procedures, and avoiding common mistakes, companies can operate smoothly without legal disruptions.

While the process can be complex, especially for sector-specific permits like BPOM or environmental licenses, proper preparation and professional support can make renewal faster and more secure.

For businesses in Indonesia, staying proactive about license renewal is not just about compliance—it is about ensuring long-term growth, trust, and sustainability.