When setting up a company in Indonesia, obtaining the administrative requirements is just as important as building your business plan. Among these requirements is the domicile letter in Indonesia, a document that confirms the official location of your business. This document is often required when applying for business licenses, opening a bank account, or registering with government authorities. 

While it may seem like a simple formality, a domicile letter is critical to ensuring your business is recognized as legitimate and compliant. By understanding its purpose and requirements, foreign business owners can avoid unnecessary delays and establish a stronger business presence in the Indonesian market. Let’s explore the domicile letter, its importance, requirements, and how to get one for your business.

What is a Domicile Letter?

Domicile letter, also known as Surat Keterangan Domisili Usaha (SKDU) in Indonesian, is an official document that certifies and verifies a person’s or a company’s current physical address. This document is usually issued by the local village (Kelurahan or Desa) or sub-district (Kecamatan) office. It confirms the physical and legal address of the business entity, whether it is a commercial office, shopfront, or virtual office. 

A domicile letter is essential for legal compliance and serves as proof that a company is legitimately operating at the stated location. This document is often required for various administrative and legal purposes, including obtaining a Business Identification Number (NIB), for tax purposes (NPWP), and opening corporate bank accounts.

Why is a Domicile Letter Important for Business?

If you are a foreign business owner looking to establish your company in Indonesia, a domicile letter is an important document for the following reasons:

Legal Foundation for Business Operations

A domicile letter serves as official proof of your business’s physical address in Indonesia. It is also a foundational legal document required to obtain other essential permits and licenses, such as a Business Identification Number (NIB) under the Online Single Submission (OSS) system. Without it, your business cannot legally operate in Indonesia.

Builds Credibility

No customers or business partners want to engage with a company with no legally recognized business address. Obtaining a domicile letter is necessary not only to confirm your business address with the local government but also to build trust and credibility. You can also avoid the risks of operational delays or suspension caused by not having a valid domicile letter.

Access to Banking and Financial Services

Banks typically require the domicile letter to open corporate bank accounts and verify the legitimacy of the business address. Without it, your business might face obstacles in basic financial operations like processing payments and managing transactions. It is also a crucial document for registering a Tax Identification Number (NPWP). Without tax registration, businesses cannot fulfill tax obligations, which may result in fines or legal issues.

Key to Obtain Additional Licenses

Many specialized business licenses, particularly in regulated industries like fintech or healthcare, require a validated registered address. The domicile letter is important for applying for and securing these licenses, thereby enabling business expansion into new fields or markets.

What are the Requirements to Get a Domicile Letter?

To obtain a domicile letter, it is important to provide all the supporting documents needed. The exact requirements may vary by region, but generally, you will need to complete these requirements:

• Completed the application form from the local government office
• Deed of Establishment (Akta Pendirian Perusahaan) legalized by the Ministry of Law and Human Rights
• Approval letter from the Ministry of Law and Human Rights
• Valid passport
• KITAS or KITAP (temporary or permanent residence permits)
• Proof of office rental/ownership

How to Get a Domicile Letter?

Next, we will explore the application process for a domicile certificate letter. Here is the step-by-step process you should follow to obtain a domicile letter:

Secure an Office Address

First is securing an office address for your company. Your business must have a valid business address located in a commercial zone. This requires renting or owning an office space in a permitted business district, as residential properties are often not acceptable. You can also consider renting a virtual office, which allows you to obtain a prestigious business address without having to rent physical space. You will need a lease agreement and the landlord’s ownership documents.

Gather Required Documents

Once your business address is ready, you should compile all the required documents. This includes your company’s Deed of Establishment, approval letter from the Ministry of Law and Human Rights, office lease contract, and building documents. If you are a foreign shareholder or director, your passport or KITAS/KITAP may also be required.

Submit Application

To submit your application, head to the local government office where your office is located. You will need to fill out their official form and provide all the supporting documents required.

Verification by Authorities

After submission, the local authorities may inspect to verify that your office is real and located in the correct zoning area. They will also review your documents to ensure compliance with all requirements before approving your application.

Issuance of Domicile Letter

Once approved, the local government office issues the domicile letter. The process may take three to seven business days, and the letter has a five-year validity period. In some areas in Indonesia, the domicile letter is now integrated into the NIB, so it may not be required as a separate document.

Effist Suite Office: Affordable Virtual Office for a World-Class Business Image

Obtaining a domicile letter is a crucial step in establishing a business in Indonesia, and one key requirement is having a valid business address. With Effist Suite Office, you can fulfill this requirement seamlessly while elevating your company’s image. Our virtual office solutions provide a prestigious business address that enhances credibility without the high cost of a physical office. 

Beyond the address, we offer a complete package of services including mail handling, professional secretarial and administrative support, access to meeting rooms of various sizes, business lounge facilities, dedicated phone numbers managed by professional customer service, and even cleaning services. These features ensure that your business operations remain smooth, professional, and efficient. 

By choosing Effist Suite Office, you not only secure your domicile letter requirements but also position your company with the prestige and professionalism of a world-class business. For more information regarding our virtual office solution, email us at contact@effist.com. 

Editor: Irnadia Fardila