Since the enactment of Law No. 11/2020 on Job Creation, there are several changes that have occurred regarding business licensing for the criteria of Micro and Small Enterprises (MSEs) and non-Micro and Small Enterprises (non-MSEs).
It is intended that the government can develop and support Micro, Small and Medium enterprises, including by providing a number of facilities and incentives for business actors, both MSEs and non-UMEs, in carrying out their business activities.
This support is contained in Government Regulation No. 7 of 2021 concerning the Ease, Protection, and Empowerment of Cooperatives and Micro, Small, and Medium Enterprises.
So, what are the differences and criteria between UMK and non-UMK?
Read this article thoroughly!
Definition of MSE and Non MSE
Micro and Small Enterprises (MSEs) are businesses owned by Indonesian citizens, both individuals and in the form of business entities, with a business capital not exceeding IDR 5 billion and excluding the land and building where the business is located.
Meanwhile, non-micro and small businesses (non-UMK) are businesses that are larger in scale than MSEs, such as medium and large enterprises.
Medium-sized businesses are businesses owned by Indonesian citizens, both individuals and business entities with a business capital of between IDR 5 billion and not exceeding IDR 10 billion, excluding land and buildings where the business is located.
Meanwhile, a large business is a business entity owned by domestic investment or foreign investment with a business capital of more than IDR 10 billion, excluding land and buildings of the business premises.
Legal Basis Related to the Difference between MSE and Non MSE
- Government Regulation Number 7 of 2021 concerning Ease, Protection and Empowerment of Cooperatives and Micro, Small and Medium Enterprises (PP UMKM)
- Law Number 11 of 2020 on Job Creation (Job Creation Law)
- Law number 20 of 2008 on Micro, Small, and Medium Enterprises (UMKM Law)
Difference between MSE and Non MSE Criteria
The differences in criteria before and after the Job Creation Law was passed are as follows:
- Paid-up Capital
The first lies in the paid-up capital.
Here is the explanation:
- MSES
- Micro Business: <1 Billion (excluding land and building)
- Small Business: 1 billion to 5 billion (excluding land and buildings)
- Non MSE
- Medium Business: 5 billion to 10 billion (excluding land and buildings)
- Large Business: >10 Billion (excluding land and building)
- Business Actor Category
Here are the differences when viewed from the category of business actors:
- MSES
In MSEs, the category of business actors is divided into two, namely:
- Individual
- Business Entity
- Non MSE
In non-UMK businesses, the categories of business actors are 4, namely:
- Individual
- Business Entity
- Representative Office
- Overseas Business Entity
- Annual Turnover/Sales Revenue
Law No. 7 of 2021 states the difference in sales result criteria between MSEs and non-UMEs as follows:
- Micro Enterprises have annual sales up to a maximum of Rp.
2,000,000,000 (two billion rupiah) - Small businesses have annual sales of more than Rp.
2,000,000,000 (two billion rupiah) up to a maximum of Rp.
15,000,000,000 (fifteen billion rupiah) - Medium-sized enterprises have annual sales revenue of more than Rp.
15,000,000,000 (fifteen billion rupiah) to a maximum of Rp.
50,000,000,000 (fifty billion rupiah).
KH Contact
Government policy in developing regulations related to criteria certainly has a good impact on business actors.
In addition to providing legal certainty, this regulation is also a means to empower business actors in carrying out their business activities in a legal and structured manner.
Having clear business legality not only increases credibility in the eyes of consumers and business partners, but also opens up opportunities to gain access to financing and incentives from the government.
Well, to ensure that your business complies with the regulations and has legal legality, you can contact Kontrak Hukum.
We are ready to help you to take care of business legality aspects, starting from managing business licenses through OSS, establishing business entities, to preparing and managing other legality documents.
Entrust business legality management to Kontrak Hukum by visiting the page KH Services – Starting a Business. If you still have questions, you can also consult for free at Ask KH or send a direct message (DM) to Instagram @kontrakhukum.
Businesses can also join the KH Business Community as a platform and access to information, discussions, and legal assistance from professional experts and other business people.
Just register via this page KH Business Community.
In addition, you can also increase your income to millions of rupiah by becoming part of the Contract Law Affiliate Program.
The registration method is also quite easy, just go straight to the following linkyes!
