Industry Legal Services · Indonesia
Textile & Garment Factory
Licensing in Indonesia
Complete legal permitting services for foreign investors and PT PMA companies establishing textile, garment, and apparel manufacturing facilities in Indonesia — from initial corporate structuring through full operational compliance.
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Indonesia’s Textile Sector:
Opportunity With Complexity
Indonesia is Southeast Asia’s second-largest garment exporter. But the licensing landscape for foreign-owned textile and garment factories is layered — involving at least six government agencies, environment and manpower law, and sector-specific industrial regulations.
Multi-Agency Licensing
Textile factory licensing in Indonesia involves BKPM, Ministry of Industry, OSS, KLHK, Ministry of Manpower, Customs, and regional governments — all simultaneously.
Foreign Ownership Rules
PT PMA in the textile sector must comply with the Positive Investment List (Perpres 10/2021), minimum capital requirements, and progressive divestment obligations.
Environmental Obligations
Textile manufacturing is one of Indonesia’s most environmentally regulated industries. AMDAL or UKL-UPL, wastewater (IPAL) compliance, and air emission permits are mandatory.
Kawasan Berikat Benefits
Export-oriented garment manufacturers can access significant customs and tax facilities through Bonded Zone (Kawasan Berikat) status — but only with proper legal structuring.
Manpower Compliance
Labor-intensive garment factories face strict scrutiny on employment contracts, minimum wage compliance, BPJS registration, and expatriate worker permits (RPTKA/KITAS).
Post-License Compliance
Operating licenses require ongoing reporting, renewal management, and regulatory monitoring. Non-compliance triggers administrative sanctions and license revocation.
Full Licensing Scope
Complete Permit & License Checklist
Every permit required to legally establish and operate a textile or garment factory in Indonesia as a PT PMA. BLS Law manages each item below.
| # | Permit / License | Issuing Authority | Status | Description |
|---|---|---|---|---|
| A — Corporate & Investment Foundation | ||||
| 1 | PT PMA Establishment (Akta Pendirian) | Notary / Ministry of Law & HR | Mandatory | Incorporation of foreign-owned limited liability company (PT PMA) as legal vehicle for the factory investment. |
| 2 | Nomor Induk Berusaha (NIB) | OSS / BKPM | Mandatory | Business Identification Number — master license integrating import, customs, and BPJS registration. Required before any other permit. |
| 3 | KBLI Classification Verification | OSS / BPS | Mandatory | Business classification codes confirming textile/garment activities (KBLI 13111–13990, 14111–14200) are correctly registered. |
| 4 | Investment Registration (LKPM) | BKPM / BKIAD | Mandatory | Quarterly investment activity report (Laporan Kegiatan Penanaman Modal) — ongoing obligation from NIB issuance. |
| B — Industrial Business Licensing | ||||
| 5 | Industrial Business License (IUI) | Ministry of Industry / DINAS | Mandatory | Izin Usaha Industri — core license authorizing textile/garment manufacturing operations. Required for investment above IDR 10 billion. |
| 6 | Industry Registration Certificate (TDI) | Ministry of Industry | Conditional | Tanda Daftar Industri — for small-scale operations below IUI threshold. Typically not applicable for PMA factories. |
| 7 | Industrial Area Compliance Letter | Zone Manager / Pemda | Important | Confirmation of factory location compliance with industrial zoning and regional spatial plan (RTRW). |
| 8 | Machine Registration (Registrasi Mesin) | Ministry of Industry | Important | Registration of imported industrial machinery for textile/garment production lines under machine safety and standards regime. |
| C — Land, Building & Construction Permits | ||||
| 9 | Land Title — HGB (Right to Build) | ATR/BPN | Mandatory | Hak Guna Bangunan — the land right applicable to PT PMA for constructing factory buildings. Initial 30-year term, extendable. |
| 10 | Building Approval (PBG) | Pemda / DPMPTSP | Mandatory | Persetujuan Bangunan Gedung — replaces IMB under PP 16/2021. Required before construction of factory buildings and facilities. |
| 11 | Certificate of Functional Eligibility (SLF) | Pemda / DPMPTSP | Mandatory | Sertifikat Laik Fungsi — certifies the completed building meets construction and safety standards before operational use. |
| 12 | Spatial Conformity Certificate (KKPR) | ATR/BPN / Pemda | Mandatory | Kesesuaian Kegiatan Pemanfaatan Ruang — confirms the factory site complies with national and regional spatial planning. |
| D — Environmental Permits | ||||
| 13 | AMDAL or UKL-UPL | KLHK / DLHK Provinsi | Mandatory | Environmental Impact Assessment (AMDAL) or Environmental Management Efforts (UKL-UPL). Textile/dyeing factories typically require full AMDAL due to wastewater impact. |
| 14 | Wastewater Discharge Permit (IPLC) | KLHK / DLHK | Mandatory | Izin Pembuangan Air Limbah — mandatory for factories generating liquid effluent from dyeing, washing, or finishing processes. |
| 15 | Air Emission Permit | KLHK / DLHK | Important | Required for factories operating boilers, generators, or processes generating air emissions above regulatory thresholds. |
| 16 | Hazardous Waste Management Permit (B3) | KLHK | Conditional | Required if the factory generates hazardous waste from chemical processes, dyeing agents, or finishing chemicals classified as Limbah B3. |
| E — Manpower & Workforce Permits | ||||
| 17 | Company Manpower Regulation (PP Perusahaan) | Ministry of Manpower / Disnaker | Mandatory | Company employment regulations governing working hours, wages, and discipline — required for factories employing 10 or more workers. |
| 18 | BPJS Ketenagakerjaan & Kesehatan Registration | BPJS | Mandatory | Mandatory social security registration for all employees — covers work accident, death, pension, and national health insurance. |
| 19 | Foreign Worker Utilization Plan (RPTKA) | Ministry of Manpower | Conditional | Rencana Penggunaan Tenaga Kerja Asing — required before hiring expatriate staff in managerial or technical positions. |
| 20 | Work Permit & KITAS for Expatriates | Ministry of Manpower / Imigrasi | Conditional | Individual work authorization and temporary stay permit (KITAS) for foreign nationals employed at the factory. |
| F — Customs, Trade & Export Permits | ||||
| 21 | Customs Identity Number (NIB-Kepabeanan) | Directorate General of Customs (DJBC) | Important | Required for factories importing raw materials (fabrics, yarns, chemicals, machinery) or exporting finished garments. Integrated with NIB under OSS. |
| 22 | Kawasan Berikat Permit (PDKB) | Ministry of Finance / DJBC | Conditional | Bonded Zone license granting customs duty suspension on imported materials for re-export as finished goods. Highly recommended for export-oriented manufacturers. |
| 23 | Export Registration Number (Angka Pengenal Ekspor) | Ministry of Trade | Important | Required for garment exporters to register as authorized exporters and access bilateral trade preferences. |
| 24 | SNI Product Certification | BSN / Kemenperin | Conditional | Indonesian National Standard certification for regulated textile products sold domestically (e.g. children’s clothing, safety workwear). |
Note: Permit names and requirements may be updated by regulation. BLS Law continuously monitors regulatory changes on behalf of clients.
Location Strategy
Kawasan Industri vs Kawasan Berikat
Where your factory is located determines which permits are required, which tax facilities you can access, and how your export operations must be structured. BLS Law advises on both.
| Item | Detail |
|---|---|
| Definition | A designated industrial zone developed and managed by an industrial estate company, approved by the Ministry of Industry. |
| Key Advantage | Simplified licensing; shared infrastructure (power, water, roads, waste treatment); zone-level AMDAL may reduce individual assessment burden. |
| Foreign Ownership | PT PMA factories can operate inside Kawasan Industri. Factory land is held under HGB issued within the zone. |
| Regulations | PP No. 142/2015 on Kawasan Industri; Permenperin No. 40/2016 on industrial estate standards. |
| Permit Required | Allocation letter from zone manager + compliance with zone regulations + standard IUI and environmental permits. |
| Major Zones (Textile) | KI Karawang, KI Jababeka (Bekasi), KI Kendal (Semarang), KI Batamindo, KI Bintan, KI Cikarang. |
| BLS Law Services | Zone selection advisory, HGB application, zone regulation compliance, IUI and environmental permit coordination. |
| Item | Detail |
|---|---|
| Definition | A bonded logistics zone under customs supervision where imported goods can be stored, processed, and re-exported without payment of import duties. |
| Key Advantage | Suspension of customs duties and VAT on imported raw materials (fabric, yarn, accessories, dyes) — significant cost reduction for export manufacturers. |
| Foreign Ownership | Available to PT PMA with minimum 50% export orientation (export value ≥ 50% of production output). |
| Regulations | PP No. 85/2015 on Kawasan Berikat; PMK No. 131/2018 on KB procedures; PMK No. 65/2021 on facility updates. |
| Permit Required | KB Operator License (izin penyelenggara KB) or KB User License (izin PDKB) issued by Directorate General of Customs (DJBC). |
| Key Obligations | Strict inventory management system; periodic DJBC audit; export quota compliance; annual activity report to DJBC. |
| BLS Law Services | KB eligibility assessment, PDKB application and DJBC liaison, inventory compliance advisory, export quota structuring. |
Yes — this is the optimal structure for export-oriented garment manufacturers. A factory inside a Kawasan Industri (simplified zoning, shared infrastructure) that also holds KB status (customs duty suspension on inputs) achieves maximum operational and fiscal efficiency. BLS Law advises on structuring this dual-zone arrangement.
Our Practice Areas
Legal Services for
Textile & Garment Investors
BLS Law provides end-to-end legal support across every stage of the textile and garment factory investment lifecycle in Indonesia.
Corporate Structuring & PT PMA
Establishing the correct foreign-owned corporate vehicle for your textile investment, including ownership structure, capital requirements, and KBLI alignment.
- PT PMA incorporation and deed of establishment
- KBLI selection and OSS registration
- NIB and business license activation
- Minimum capital compliance advisory
- Divestment obligation planning
Industrial & Business Licensing
Securing all industrial permits from the Ministry of Industry, regional government (DPMPTSP), and OSS system for manufacturing operations.
- IUI (Industrial Business License) application
- Industrial zone compliance verification
- Machine registration coordination
- SIUP and trade license (if applicable)
- Ongoing LKPM investment reporting
Environmental Permitting
Full environmental compliance for textile factories — one of the most closely regulated industries under Indonesian environmental law.
- AMDAL or UKL-UPL coordination
- Wastewater discharge permit (IPLC)
- Air emission permit
- Hazardous waste (B3) management permit
- RKL-RPL compliance reporting
Land, Building & Spatial Permits
Securing land rights and construction permits for factory buildings, warehouses, and supporting facilities.
- HGB application via ATR/BPN
- KKPR spatial conformity certificate
- PBG building approval
- SLF functional eligibility certificate
- Zone allocation letters and compliance
Kawasan Berikat & Customs
Structuring and securing Bonded Zone (KB) status for export-oriented garment manufacturers to access duty suspension on imported raw materials.
- KB eligibility assessment and structuring
- PDKB license application to DJBC
- Customs inventory compliance system
- Import facility documentation
- Periodic DJBC audit preparation
Manpower & Expatriate Compliance
Ensuring full compliance with Indonesia’s labor law for garment factories — from employment regulations to expatriate work permits.
- Company regulation (PP Perusahaan) drafting
- BPJS registration and compliance
- RPTKA and expatriate work permit (KITAS)
- Employment contract templates (bilingual)
- Minimum wage and severance compliance review
How We Work
Our Engagement Process
A structured, transparent process from initial consultation to full operational compliance.
Initial Consultation
Assess your investment plan, sector, location, and ownership structure. Identify all applicable permits.
Permit Roadmap
Deliver a complete licensing roadmap with timeline, responsible agencies, costs, and sequencing.
PT PMA & Foundation
Establish corporate structure, NIB, and all foundational licenses before construction begins.
Construction Phase
Secure land rights, building permits, environmental approvals, and zone compliance in parallel.
Pre-Operations
Finalize IUI, SLF, manpower permits, customs registration, and KB license before production start.
Ongoing Compliance
Manage permit renewals, LKPM reporting, RKL-RPL submissions, and regulatory monitoring.
Ready to Build Your Factory
in Indonesia?
Whether you are at the feasibility stage or ready to break ground, BLS Law ensures your textile or garment investment is legally structured from day one.