“The business scope of the electric motor industry includes the business of manufacturing electric motors and their components or parts, such as AC motors, DC motors, stators, rotors, brushes and commutators, except for internal combustion engines to power the motors. The electric motorbike industry is a business with a medium to low level of risk.”
Business Classification (KBLI) of Electric Motor Industry
Electric Motor Industry is classified in KBLI 27111, this classification includes the business of manufacturing electric motors and their components or parts, such as AC motors, DC motors, stators, rotors, brushes and commutators, except for internal combustion engines to power the motors. The business scale in this business sector is divided into four, namely micro business scale, small business scale, medium business scale and large business scale. However, all of these business scales have a risk level of medium-low.
For business activities with medium-low risk, business actors must have a business license in the form of a Business Identification Number (“NIB”) and a standard certificate. NIB is proof of registration of business actors to carry out business activities and as an identity for business actors in carrying out their business activities. Meanwhile, the standard certificate is the legality for carrying out business activities in the form of a statement by business actors to fulfill business standards in order to carry out business activities that are provided through the OSS or Online Single Submission System.
Foreign investment in this business sector is not regulated so that there are no restrictions on foreign investment in the electric motor industry. However, if there is foreign capital in a business, it is must be established as a foreign investment limited company (PT PMA) that based on the Regulation of the Head of the Investment Coordinating Board Number 4 of 2021 (“Perka BKPM 4/2021“), it is explained that the minimum investment value requirement for PMA is that the total investment is greater than IDR 10 billion, excluding land and building and is classified as a large business scale.
Licensing Requirements for Electric Motor Industry
The business sector requirements on the electric motor industry for micro, small, medium, and large-scale businesses have a medium-low level of risk, so the business licensing requirements are NIB (Business Identification Number) and Standard Certificate. Based on Regulation of the Minister of Industry No. 9 of 2021 (“Permenperin 9/2021“) on Standard for Business Activities and Products in the Implementation of Risk-Based Business Licensing in the Industrial Sector, it is regulated that general requirements and business licensing are:
- Have a National Industrial Information System account;
- Submitting industrial data through the National Industrial Information System;
- Located in an Industrial Estate or can be located outside an Industrial Estate in accordance with the provisions of Government Regulation Number 5 of 2021 (“PP 5/2021”);
- Have a Certificate for Large Industries that are exempt from the obligation to be located in an Industrial Estate;
- After obtaining a business license, business actors according to their respective needs must have a business license to support business activities in commercial-operational activities in accordance with the provisions of laws and regulations in the industrial sector.
Furthermore, the special requirements for this business scope are:
- Has production tools and facilities;
- Has a Human Resource and organizational structure documented with job descriptions and division of authority within the organization business;
- Providing minimal service to consumer;
- Have a business management system company;
- Have Health and safety standards work as determined by Ministries or Institutions related to Employment;
- Have environmental standards in accordance with Environmental Provisions regulated by Ministry or Institutions related to Environment Life;
- Has Quality Management Standards (ISO 9001) mandatory for the Middle High (MT) Category and voluntary for the Low Middle (MR) category.
Minimum requirements for facilities are:
- The location of production facilities is not contaminated from pollution sources
- Has production space
- Has sanitation facilities, including:
- Water supply facilities
- Water and waste disposal facilities
- Cleaning/washing facilities
- Toilet facilities
- Employee hygiene facilities, at least for washing employee hands
- Owns machines and/or production equipment
Minimum requirements for products/processes/services are as follows:
- The requirements for products produced after obtaining a business permit must have SPPT-SNI Certificate if SNI is required for the product.
- Has production facilities in accordance with its business field.
If a business actor does not have a business permit, according to Article 405 paragraph (1) PP 5/2021, the business actor can be subject to administrative sanctions in the form of written warning, administrative fines; and/or temporary closure.
Author: Adam Kausar
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