Starting a business, from micro to large levels, requires several complementary documents that will make it easier for you to run your business. One of these documents is the SITU or Business License. Not much different from the Trading Business License (SIUP), SITU is also required to run a business officially. SITU itself is a license given to companies, business entities, or individuals who run a business. With the SITU, the business is declared to be in accordance with the regional spatial rules around the business location. If you are planning to negotiate investment with investors, this permit can also be used as legal proof of the legality of your business. So, what is an SITU? How does it differ from a SIUP and how to apply for one? Let’s see the further discussion here!
What is SITU?
SITU or Surat Izin Tempat Usaha is a letter issued to business entities, companies, individuals who open a place of business. This legality letter is issued by a legal entity located adjacent to the business or company and is made to certify that the business entity, company, or place of business is in accordance with the spatial provisions of the area around the business location. A business entity or company that already has a SITU means that it has met the spatial requirements, environmental sustainability, and is accepted by the surrounding community. That way, there will be no problems in the future because there is already a legal letter that oversees it.
What is the Difference between SITU and SIUP?
Although both are licenses, SITU and SIUP are different. SIUP is a license that can be used to conduct trading activities in the goods/services sector. Meanwhile, SITU is a license issued to companies or individuals to open a place of business. SIUP is issued by the central government through the Industry and Trade Office according to the domicile of the company, while SITU is based on the local government.
READ ALSO: Get to know SIUP, a legal document to protect your business
However, both are equally important and must be owned so that business actors have legal legality. Having SIUP and SITU means that business development is easier thanks to the certainty of business status in the eyes of the state.
What is the Importance of Having an SITU?
As explained, SITU is an official document given by the local government to business owners or companies to establish and run business activities in certain locations. Here are some reasons why having a SITU is very necessary in running a business:
Legality and Legal Compliance
SITU is proof of legality and compliance with applicable laws and regulations in Indonesia. By having a SITU, business owners or companies can show that they have run their business in accordance with applicable regulations, thus avoiding legal problems that can harm business continuity.
Investment Protection
SITU can be considered as a form of protection for the investment that has been made by the business owner. By having a valid license, business owners can reduce the risk of disputes or conflicts with the authorities, which can threaten the continuity of investment and business operations.
Trust from Third Parties
Having a SITU also increases trust from third parties, such as customers, business partners and lenders. The license creates a positive image that the business operates in a transparent and law-abiding manner, thus supporting good relationships with stakeholders.
Public Facilities and Services
Business owners with a SITU can more easily access public facilities and services provided by the government. This includes access to various support programs, additional permits, and other assistance that can improve business operations and growth.
Neighborhood and Community Safety
SITU also reflects a company’s social responsibility towards the environment and surrounding communities. By having the appropriate license, the company demonstrates its willingness to operate with due regard to its impact on the surrounding environment and adhere to established safety standards.
Terms and Procedures for SITU
Now, you understand what a SITU is, how it differs from a SIUP, and how important it is for your business. Now, let’s take a look at the requirements and how to apply for a SITU! Please pay attention so that you don’t have to go back and forth due to incomplete documents and so on. Yes, before applying for a SITU, you need to fulfill the following requirements:
- Application letter with Rp10,000 stamp along with company seal / stamp
- Letter of recommendation from the Department related to the business field
- List of members/managers or founders of the business entity
- Nuisance law license (HO)
- Deed of establishment of a business entity that has been legalized by the district court
- SPPT and STTS PBB for the last year
- Certificate of contract/lease of the building (If the building is leased to another party)
- IMB (building permit) for business premises
- Proof of ownership of land and buildings that will be used as the location of business activities
- Location plan and map in the form of sketches or drawings authorized by village and sub-district officials.
- ID card and 2 passport photos with a size of 3×4
If the required documents are complete, then you can apply for SITU online. Below are the procedures and stages of managing SITU online as reported by the SIPPN Menpan page:
- The applicant registers a company OSS account through https://oss.go.id;
- Central OSS Agency sends username and password notification email to the applicant
- The username and password obtained from the OSS Institution are used by the applicant to login to the OSS Application. After login, the applicant fills in the data and information required by the system for license processing;
- The PTSP officer tracks the application through the OSS system. If there is an application, registration verification will be conducted;
- The PTSP officer verifies the documents on fulfillment of business license commitment uploaded by the applicant. If incomplete, the officer sends a notification via webform to the applicant for further completion. If complete, the PTSP officer validates the documents for business license issuance. The applicant then proceeds to fulfill the commercial/operational license commitment;
- The Applicant fulfills the operational/commercial business license commitments as required by the OSS system based on the KBLI and the proposed Line of Business;
- The PTSP officer verifies the documents on fulfillment of operational/commercial business license commitment uploaded by the applicant. If incomplete, the officer sends a notification via webform to the applicant for further completion. If complete, the PTSP officer validates the operational/commercial license and the license is effective.
After the application process, you can also view the progress online through the local government website. It will show the ongoing SITU process, whether it has been approved, delayed, or rejected.
How long is the validity period of SITU?
Once you have a SITU, you’ll be able to relax and focus on growing your business for the next three years. Why three years? Because SITU has a maximum validity period of three years. After the validity period expires, the business owner must extend the SITU and will get the same validity period as long as the object and subject of the business do not change. The duration of the extended SITU processing takes a maximum of 5 days starting from the day of submission.
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That’s the complete discussion about SITU, its difference with SIUP, benefits, and the procedure to apply for it. SITU is not just a formal requirement, it is also the foundation for the sustainability and growth of a business. Through a SITU, a company not only fulfills legal requirements, but also builds a foundation of trust, investment security, and positive engagement with the surrounding community and environment. Therefore, it is highly recommended for all business owners to ensure that they have a valid and updated SITU for the continuity and success of their business.
READ ALSO: This is the difference between SIUP and IUMK that business people need to know!
Well, to take care of it, you can just leave it to Kontrak Hukum. As a digital legal platform, we can help you to take care of all business licenses in just 48 hours, 100% online without face-to-face. No need to worry, because licensing documents at Kontrak Hukum are easy, safe, and affordable starting from only IDR 700 thousand! For service information, visit KH Services – Licensing page. If you have further questions, you can also consult for free at Tanya KH and send a direct message (DM) to Instagram @Kontrakhukum.
