Business License for Shopping Center

The provisions concerning business license for shopping center are regulated in the President Decree Number 112 Year 2007 on Structuring and Development of Traditional Markets, Shopping Center, and Modern Stores (“Perpres No.  112/2007”) and the Minister Decree Number 53/M-DAG/PER/12/2008 Year 2008 on Guidelines on Structuring and Development of Traditional Markets, Shopping Center and Modern Stores (“Permendag No. 53/M-DAG/PER/12/2008”). Based on the above mentioned regulations, there is a license which require in order to engage in the business of Shopping Center. In order to engage in the shopping center business, the owner or the management of the shopping center is obliged to obtain the business license, which is the Shopping Center Business License (“IUPP”) for stores, mall, plaza and trade center.

IUPP is issued by the Regent/Mayor or Governor of DKI Jakarta Provincial Government. The Regent/Mayor, besides Governor of DKI Jakarta Provincial Government, delegates the authority of the issuance of IUPP to the Head of Service/Unit which is responsible in the field of trade or the official which is responsible in the implementation of the local One Stop Integrated Service (Pelayanan Terpadu Satu Pintu).

Procedures and Guidelines for the Submission of IUPP Application

There is no fees which is imposed in conducting the application of IUPP. The application for IUPP is submitted to (i) District/City Service which is responsible in field of trade or (ii) local One Stop Integrated Service (Pelayanan Terpadu Satu Pintu) by filling the application form and attaching the required documents in accordance with the requirements as mentioned.

The application shall be signed by the owner or the management of the company. In order to submit the application for IUPP, it has to be completed with the feasibility study (Studi Kelayakan) including the environmental impact assessment (AMDAL) especially for the social and cultural aspect and its impact to the local retail business, and the partnership plan with small businesses.

If the application submitted is correct and complete, then the  Business License Issuer (“Official”) may issue the IUPP no later than 5 (five) working days since the application is accepted. But if the application is not correct or not completed, then the Official will send a written refusal which includes the reason of the refusal to the applicant no later than 3 (three) working days since the date the application has been recieved. The company which application is rejected can reapply for the IUPP by re-submitting the application form together with with all the required documents that are correct and complete.

Company that manages the shopping centre which already obtain the IUPP is not obliged to acquire Trade Business License (SIUP). If there is a change of location of Traditional Market, Shopping Center and Modern Stores business, then the  management/person in charge of the company shall submit the application for a new license. IUPP is applicable as long as the business activity is conducted at the same location, and it shall be renewed every 5 (five) years.

The requirement of IUPP

In addition, there are several requirements to acquire IUPP which are:

1)         A copy of Principle License from the Regent/Mayor or Governor of DKI Jakarta Provincial Government;

2)         The result of society’s social and economic condition analysis; and a recommendation from the authorized institution;

3)         Copy of Location Permit from the National Land Office (BPN);

4)         Copy of Nuisance Law Permit (HO);

5)         Copy of Building Construction Permit (IMB);

6)         Copy of the Company’s deed of establishment and its legalization from the Minister of Law and Human Right (“MOLHR”);

7)         Partnership plan with the Micro and Small business; and

8)         Statement Letter of commitment and eligibility to perform and to comply with the prevailing regulation.

In order to acquire business license for Traditional Market or Modern Market which integrated with the Shopping Centers, it shall fulfill the requirements as follows:

a. Result of the society’s social and economical condition analysis which consist of:

1)      The population’s structure based on the job and education;

2)      Income level of the households;

3)      Population density

4)      Population growth;

5)      Partnership with the local micro, small and medium businesses (“UMKM”);

6)      Local manpower absorption;

7)      Resilience and growth of Traditional Markets as facility for the local UMKM;

8)      The existence of the local and public facilities which already exist;

9)      Positive and negative impacts on the distance between Hypermarket and Traditional Market that has existed before; and

10)  Corporate Social Responsibility of the company.

b. Copy of IUPP of the Shopping Center or other building where the Traditional Market or Modern Store is established;
c. Copy of the Deed of Establishment and its legalization from MOLHR;
d. Statement Letter of commitment to perform and comply with the prevailing regulations; and
e. Partnership plan with the local UMKM for Shopping Centers or Modern Stores.

Aditya Rahardiyan

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