"The government has made it easier for business actors to set up micro and small enterprises (MSEs) through individual companies, which are regulated in the Job Creation Law," director general of General Legal Administration (AHU) at the Ministry of Law and Human Rights, Cahyo R. Muzhar, informed in a statement issued in Jakarta on Thursday.
He made the statement during a focus group discussion (FGD) themed "Starting Business," which was held as part of a series of activities of the 61st Asian-African Legal Consultative Organization (AALCO) in Bali.
The policy that makes it easier for people, especially MSEs, to open new businesses has been implemented as part of the Job Creation Law.
Overlapping regulations and complicated procedures have been cut. Now, businesses can be set up by simply submitting a statement regarding their establishment, he said.
So far, if anyone wanted to set up a company, they needed to fulfill many conditions and procedures; therefore, the Ministry of Law and Human Rights is trying to make it easier to set up a company, including by establishing an individual company.
According to Muzhar, President Joko Widodo has called for ensuring the ease of doing business, especially for micro and small businesses.
Individual companies, he said, are one option for micro and small business actors to set up a company.
The ministry's coordinator of legal entities at the AHU, Laila Yunara, said that to establish individual companies, business actors need to be Indonesian citizens, at least 17 years old, and require a maximum capital of Rp5 billion (around US$318 thousand).
"The advantages of individual companies are the separation of assets and the freedom to determine the amount of capital. Apart from that, the method is also easy, namely filling out the form, and the registration fee is only Rp50 thousand (US$3). After that, the individual company immediately gets legal entity status and, at the same time, obtains taxpayer identification numbers (NPWP) for corporations," she explained.
According to Yunara, an individual company can also change into a capital partnership company if there is more than one shareholder or it no longer meets the MSE criteria.
"Before becoming a capital partnership company, an individual company changes its status through a notarial deed and is registered electronically," she said.
An applicant, via a notary, would need to fill out a statement electronically stating that the format of the company and information regarding the supporting documents submitted are in accordance with the provisions of the laws and regulations. "The applicant is fully responsible for the correctness of the format and information," Yunara said.
AALCO, which was founded in 1956, is an international cooperation forum that seeks to support the development of its 47 member countries by providing assistance with legal issues.
The institution has made a major contribution to the economic development of the Asia-Africa region, including Indonesia, which is the largest economic power in Southeast Asia.
The 61st yearly AALCO meeting, which will be held on October 15-20, will feature conferences and business and investment exhibitions, as well as a series of discussions involving the youth to discuss issues in the legal and business infrastructure, including the micro, small, and medium enterprises (MSMEs) sector.
This forum is expected to promote legal development in Indonesia for the business world and bridge the information gap between policymakers and business actors.
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Translator: Ahmad W, Luthfia, Azis Kurmala
Editor: Tia Mutiasari
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