How to Start a Business in Power Supply in Indonesia

Indonesia has been extending a warm welcome to foreign entrepreneurs, investors, and businesses who can contribute to the country’s economy. This can be seen in their recent more business-friendly policies and improved licensing infrastructure – making Indonesia one of the best destinations for foreigners to start a business in Indonesia.

Particularly for the power supply business in Indonesia, thanks to this archipelago’s rich energy and renewable resources, many foreigners are now putting more of their investment capital in the energy sector. The foreign investment in the power supply sector is expected to rise tremendously with the forecast showing that the energy demand in Indonesia is going to increase by 80% before 2030.

Compulsory Company Registration before a Business License Application

Before you can apply for your power supply business license in Indonesia through the Online Single Submission (OSS) system, it is a requirement for you to register your company in the country.

For most expats and foreign businesses, a foreign limited company of power supply in Indonesia is their most preferred type of legal entity.

Here is a summary of the steps to go about it:

1. Submit an investment plan to the Indonesian authority known as the Indonesian Investment Coordinating Board
2. Deposit the minimum share capital, and the amount depends on the type of business
3. Submit the Article of Association and other company registration documents
4. Apply for a tax number and register with the tax authorities and trade register in Indonesia
5. Depending on the power supply business activities, register with other specialised agencies or associations
6. Authorities approve the company incorporation
7. Apply for a power supply business license

Mandatory Business License – IUPTL

The Indonesian Law 30/2009 in regards to Power Electricity states that businesses of power supply serving the public must obtain a power supply business license (Izin Usaha Penyediaan Tenaga Listrik – IUPTL).
Before the authority can issue an IUPTL to your power supply business, you are obliged to fulfill certain requirements:

Administrative Requirements

You shall submit the following information:

• Applicant’s identity
• Validation as a legal entity in Indonesia
• Company profile with applicant’s profile
• Tax identification number
• Financial capability documents with funding source including audited financial statement and bank statement

Technical Requirements

You should also complete the technical requirements by providing the below information:

• Business feasibility study in Bahasa Indonesia
• One-line diagram
• Installation location (except for power sales business)
• Location permit (except for power sales business)
• Construction schedule
• Business type and capacity
• Operational schedule
• MoEMR’s approval letter on power sales or power network lease
• Power network lease agreement
• Power sale-purchase agreement
• Electricity supply business plan (RUPTL) and work area determination

Environmental Management Requirement

The final section of the requirement to meet to acquire your business license is the environmental management requirement:

• Environmental management and monitoring effort document such as Environmental Impact Analysis (AMDAL)

Start a Power Supply Business in Indonesia Hassle-free with Cekindo

Cekindo offers foreign individuals and businesses who possess the right business skills, acumen, and experience to take part in this booming business environment.

Our services to help you start a business of power supply in Indonesia are meticulously designed to support your business presence and growth in the country. In addition to realising your business goals, another key aspect of establishing a business in Indonesia is that you can explore the diversely-cultural, healthy, friendly, and fun aspects of the Indonesian lifestyle.

Cekindo’s team of business professionals are experts who work hand-in-hand with you to understand your aspiration, business, and personal circumstances, and financial capability – so that we can provide you with the best solution.

Book a free consultation with Cekindo and we will answer all your related inquiries. Fill in the form below.