Business License for Foreign Language Course Institutions

PERTANYAAN

I have a foreign language course business that has been running for almost 2 years. However, my business does not yet have adequate legality. How do I proceed to get one? How can I get business license in Indonesia?

INTISARI JAWABAN

Foreign language course institutions are included in one of the types of education units recognized in law, namely non-formal education units. For legality, you need to apply for a Business Identification Number, which is obtained through the OSS system and also apply for an establishment permit from the Head of the District/City Education Office.

Please read the review below for a further explanation.

 

ULASAN LENGKAP

This article is an English translation of Izin Usaha untuk Lembaga Kursus Bahasa Asing written by Easybiz and published on Friday, 11 March 2022.

All legal information available on Klinik hukumonline.com has been prepared for educational purposes only and is general in nature (read the complete Disclaimer). In order to obtain legal advice specific to your case, please consult with Justika Partner Consultant.

Course Institution as a Nonformal Education Unit

According to Article 1 number 10 Law 20/2003, an educational unit means any educational service group providing formal, non-formal, and informal education at every level and type of education.

Furthermore, a non-formal education means any educational pathway outside formal education which can be implemented in a structured and tiered manner.[1] In accordance with Article 102 section (1) Government Regulation 17/2010, non-formal education functions:

1. as a substitute, supplement, and/or complement to formal education or as an educational alternative; and
2. develop learners' potential with an emphasis on mastering functional knowledge and skills, as well as developing professional attitudes and personalities in order to support lifelong education.

Education units that organize non-formal education include:[2]

1. Course institutions and training institutions;
2. Study groups;
3. Community learning activity centers;
4. Majelis taklim (a place to carry out the teaching of Islam); and
5. Non-formal early childhood education.

Furthermore, Article 1 number 4 Regulation of the Minister of Education and Culture 81/2013 states that a Course and Training Institution is a non-formal education unit organized for people who need the provision of knowledge, skills, life skills, and attitudes to develop themselves, develop a profession, work, independent business, and/or continue their education to a higher level.

Establishment Permit for Foreign Language Course Institution

Course and Training Institution (in Bahasa Indonesia is known as Lembaga Kursus dan Pelatihan), which in its daily activities organizes foreign language education, is one form of non-formal education unit that can be established by individuals, groups of people, and/or legal entities.[3]

If you are interested in organizing your Course and Training Institution with a legal entity, the options available are namely a Foundation, Cooperative, or Limited Liability Company ("LLC"). For Course and Training Institutions that are established solely for profit, there is certainly no harm in considering LLC as the preferred vehicle.

One of the advantages of an LLC is that the responsibility of shareholders is limited to their paid-up capital. So that if the LLC experiences a loss, the personal assets of the shareholders remain safe.

Also read: Types of Business Entities and Their Characteristics

After choosing a business form, you can proceed to the stage of applying for a license to establish a non-formal education unit by submitting a letter of application for the establishment and attaching technical and administrative requirements to the Head of the District/City Education Office.[4]

The administrative requirements consist of:[5]

1. photocopy of the identity card of the founder;
2. composition of the management and details of duties;
3. if the founder is a legal entity, then attach a Letter of Determination of Legal Entity from the Ministry in the field of Law;
4. Certificate of domicile from the Head of Village;
5. Certificate of ownership or authorization to use the place of learning for 3 years.

While the technical requirements are in the form of an Education Unit Development Plan document with reference to the National Education Standards.[6] Later, the head of the agency will verify the administrative and technical files.[7]

Based on Easybiz's experience, verification of the correctness of all administrative and technical files is carried out by conducting a survey after the required documents are declared complete. Then, the parties who conduct the survey of the non-formal education unit you operate are the One-Stop Investment and Integrated Services Office and the local Education Office.

After the survey is completed and there are no required documents that need to be corrected, the establishment permit for the non-formal education unit you are applying for will be issued. This permit is valid for as long as the foreign language course you are running is still operating and has not changed.

Furthermore, non-formal education units that have obtained an establishment permit are given a Non-formal Education Unit Identification Number based on the procedures for giving identification numbers regulated by the Minister of Education and Culture.[8]
Also read: Here are the Procedures and Requirements for Obtaining an Operational License for a Course and Training Institution

Course Institutions Must Have Business Identification Number

Not only that, you also need to look at the Decree of the Secretary General of Education, Culture, Research, and Technology 26/2021. Point 6 of the decree states that education providers organized by the community must have a Business Identification Number issued through the OSS system based on the provisions of laws and regulations before applying for a license.

In accordance with Article 1 number 12 Government Regulation 5/2021, Business Identification Number is proof of registration/registration of business actors to carry out business activities and as an identity for business actors in carrying out their business activities.

Then, the OSS system is an integrated electronic system managed and organized by the OSS Institution for the implementation of Risk-Based Business Licensing.[9]

Also read: Risk-Based Business Licensing, Here's the Explanation

Meanwhile, the OSS Institution is a government agency that organizes government affairs in the field of investment coordination.[10]

This means that you must ensure that the data on the identity card, Taxpayer Identification Number, and Family Card of the Course and Training Institution management and founders are synchronized. Since the emergence of OSS, the business licensing system in Indonesia has integrated the data in the relevant Ministries/Institutions.

The Population Identification Number will be checked for validity through the system, as well as the Taxpayer Status Confirmation. If the Population Identification Number or Taxpayer Status Confirmation of the founders and management of the Course and Training Institution are declared invalid, the registration process to obtain the Business Identification Number cannot continue, so you cannot fulfill one of the requirements to apply for a non-formal education unit establishment permit.

If you have difficulties establishing a company and managing its licensing, please contact Easybiz at [email protected] for the best solution for legal and appropriate company establishment and business licensing.

These are the answers we can provide, we hope you will find them useful.

Legal Basis:

1. Law Number 20 of 2003 on National Education System;
2. Regulation of the Government Number 17 of 2010 on Management and Implementation of Education as amended by Regulation of the Government Number 66 of 2010 on the Amendment to Regulation of the Government Number 17 of 2010 on Management and Implementation of Education\;
3. Regulation of the Government Number 5 of 2021 on the Organization of Risk-Based Business Licensing;
4. Regulation of the Minister of Education and Culture Number 81 of 2013 on Establishment of Non-formal Education Unit;
5. Decree of the Secretary General of Education, Culture, Research, and Technology Number 26 of 2021 on Granting of Permission to Establish an Education Unit.

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[1] Article 1 number 12 Law Number 20 of 2003 on National Education System.

[2] Article 100 section (2) Regulation of the Government Number 17 of 2010 on Management and Implementation of Education.

[3] Article 2 Regulation of the Minister of Education and Culture Number 81 of 2013 on Establishment of Non-formal Education Unit (“Regulation of the Minister of Education and Culture 81/2013”).

[4] Article 6 section (1) Regulation of the Minister of Education and Culture 81/2013.

[5] Article 5 section (2) Regulation of the Minister of Education and Culture 81/2013.

[6] Article 5 section (3) Regulation of the Minister of Education and Culture 81/2013.

[7] Article 6 section (2) Regulation of the Minister of Education and Culture 81/2013.

[8] Article 7 Regulation of the Minister of Education and Culture 81/2013.

[9] Article 1 number 21 Regulation of the Government Number 5 of 2021 on the Organization of Risk-Based Business Licensing (“Government Regulation 5/2021”).

[10] Article 1 number 22 Government Regulation 5/2021.