COMPANY ESTABLISHMENT

Retail trading business group of goods by selling them includes trading activities through direct sales or special distribution systems such as single-level marketing and multi-level marketing, as well as retail trade commission agents. (ref. KBLI 47999)

The Business Sector is regulated in Government Regulation No. 29 of 2021.

The Scope of Activities is regulated in Government Regulation No. 5 of 2021, it is required that:

• Business Entity in the form of Limited Company; and
• Employ at least 1 Indonesian citizen as a member of the Board of Directors and 1 Indonesian citizen as a member of the Board of Commissioners.

MLM LICENSE

Business licensing requirements

1. Business entity in the form of Limited Company
2. Meet the criteria:
   (1) Has exclusive distribution rights for goods to be distributed through direct sales.
   (2) Have a marketing program (marketing plan);
   (3) Have a code of ethics;
   (4) Recruiting direct sellers through a network system;
   (5) Selling goods directly to consumers through a marketing network developed by direct sellers;
   (6) Employ at least 1 Indonesian citizen as a member of the board of directors and 1 Indonesian citizen as a member of the board of commissioners.

Business licensing obligations

1. The company provides information orally and in writing to prospective direct sellers at least regarding:
   (1) Company identity;
   (2) Quality and specifications of goods;
   (3) the condition and guarantee of the goods and provide an explanation of their use, repair, and maintenance;
   (4) Marketing program (marketing plan);
   (5) Code of ethics.
2. Companies that have recruited direct sellers must:
   (1) Provide sales aids (starter kit) to each direct seller which at least contains information on goods, marketing plan, and code of ethics;
   (2) Ensuring that the activities carried out by direct sellers are in accordance with the marketing plan and code of ethics;
   (3) Attaching a label on the goods and/or packaging containing at least the name of the company and a statement that the goods are sold using a direct selling system;
   (4) Determine the price of goods sold in rupiah currency and applies to direct sellers and consumers;
   (5) Providing commissions and/or bonuses based on the results of goods sales activities carried out by the direct seller and his network in accordance with the agreement;
   (6) Giving a grace period to the consumer to return the goods within a period of 7 (seven) working days from the receipt of the goods, if it turns out that the goods are not in accordance with the agreement;
   (7) Provide compensation, compensation, and/or compensation for losses caused by the use, use, and utilization of traded goods;
   (8) Carry out coaching and training to improve the ability and knowledge of direct sellers, so that they act correctly, honestly, and responsibly at least once in 1 (one) year;
   (9) Providing equal opportunities to all direct sellers to excel in marketing goods;
   (10) Have a list of direct sellers who are members of their marketing network which is equipped with the identity data of the said direct sellers;
   (11) Selling goods that already have a distribution permit or have complied with the provisions of quality standards in accordance with the provisions of laws and regulations;
   (12) Ensure direct sellers do not sell goods through indirect distribution channels and/or online marketplaces.
3. The Company submits a report on the Company’s business activities to the Central Government.

CERTIFICATION OF SUPPLEMENTS AND COSMETICS

• Registration of Supplements and Cosmetics (minister/head of the agency)
• Distribution Permit for Supplements and Cosmetics (minister/head of the agency)
• Approval of Supplements and Cosmetics Advertisement (minister/head of the agency)
• Clinical Trial of Supplements and Cosmetics (minister/head of the agency)
• Importer recommendation (minister/head of the agency)
• Recommendation as an applicant for Notification of Supplements and Cosmetics (minister/head of the agency)
• Supplement and Cosmetic Notification Standard Certificate (minister/head of the agency)
• Domestic Electronic System Operator Registration Certificate (TD PSE) (minister/head of the agency)