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tarting a small business in Indonesia doesn’t have to be complicated. A sole proprietorship, known as Usaha Perseorangan, is one of the simplest business structures available.

This guide will walk you through practical steps for legally setting up your sole proprietorship.

What is a Sole Proprietorship?

A sole proprietorship is a business entity owned and operated by one individual without legal distinction between the owner and the business.

Why Choose a Sole Proprietorship?

  • Easy Setup: Minimal regulatory requirements.

  • Low Cost: Lower administrative fees.

  • Full Control: Complete decision-making authority.

Steps to Establish a Sole Proprietorship in Indonesia

1. Prepare Your Business Plan

Even a simple business requires a basic business plan covering your product, target market, and financial goals.

2. Obtain a Taxpayer Identification Number (NPWP)

Register online at DJP webpage. An NPWP is essential for tax compliance and banking.

3. Register Your Business Name

Though not mandatory, registering your brand with DJKI helps protect your business identity.

4. Obtain a Business License (NIB)

Register through the Online Single Submission (OSS) system (https://oss.go.id) for legal business operation.

5. Set Up a Business Bank Account

Separating business and personal finances simplifies bookkeeping and enhances credibility.

Important Documents Needed:

  • Identity Card (KTP)

  • Taxpayer ID (NPWP)

  • Proof of address

Common Mistakes to Avoid:

  • Ignoring Tax Obligations: Comply with taxation to avoid penalties.

  • Mixing Personal and Business Finances: Maintain clear financial records.

Benefits of Legalizing Your Sole Proprietorship:

  • Easier access to loans and financing.

  • Eligibility for government tenders.

  • Increased customer trust and credibility.

Conclusion

Establishing a sole proprietorship in Indonesia is simple if you follow proper legal steps. For professional assistance, the AUFAR & Co Law Office team is ready to support you.

Don’t wait for a legal problem to become a crisis

Need legal clarity? Let’s talk.

Call us +62 851 5773 4129
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