3 Key Differences Between NIB and NIB at Risk You Should Notice
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NIB-and-NIB-at-Risk

START NOW – NIB and NIB at risk are two important terms that every business actors in Indonesia must understand.

Although they are similar, NIB and NIB at risk have some differences. You need to know them in order to apply them appropriately.  

NIB: Basic Identity for Business Actors

NIB: Basic Identity for Business Actors

Before discussing the difference between NIB and NIB at risk, you need to know the definition of each first.

NIB (Nomor Induk Berusaha) is one of the most important elements in establishing a business in Indonesia. 

It is an identification number given to every businesses (small, medium or large scale) so they can conduct their activities. 

By having an NIB, your business is legally recognized by the government, which makes business processes easier and more transparent.

NIB is issued by the government through the Online Single Submission (OSS) system. You can register by fill in the e-form and complete some documents.

This process is designed to be more efficient, reduce bureaucratic red tape, and speed up business license processing time.

This NIB is valid for life as long as the business is still operating. So, business actors do not need to renew it every year.

After obtaining NIB, the business will be recorded in the national database. That way, the government can monitor and regulate business activities across Indonesia easily. 

On the other hand, the companies will get legal certainty and security in running their business activities. 

Functions and Benefits of NIB

Functions and Benefits of NIB

NIB plays an important role in the legality and operation of a business. Here are some of the main functions and benefits of NIB:

Business Legality

As mentioned earlier, NIB will provides official recognition from the government for the existence of a business. 

This is important to provide legal certainty and protect the business from potential legal issues in the future.

Ease of Banking Access

Having an NIB will make it easier for you to open a bank account in the name of the company. 

It is essential to separate personal finances from business finances, which helps in better and professional financial management. 

You’ll also find it easier to access other banking services such as conduct business transactions and apply for business loans.

Integrated Permit Process

NIB simplifies other licensing processes needed for business operations. After having it, you can process various licenses and other documents through the OSS integrated system. 

These include business licenses, location permits, environmental permits, and operational permits. This integration saves time and money in obtaining the necessary documents.

Participation in Government Tenders and Projects

Having an NIB is one of the main requirements for participating in tenders or projects organized by the government. 

This will open up great opportunities to enhance business reputation and growth.

Trust and Credibility

NIB increases the trust and credibility of the business in the eyes of customers, business partners and investors. 

By having an NIB, a business demonstrates that it operates legally and in accordance with applicable regulations.

This can be an added value in establishing business cooperation.

NIB At Risk: Additional Protection

NIB at risk is a special NIB given to businesses that the government considers to have certain potential risks.

When a business is deemed risky, the government applies an additional assessment process before granting an NIB. 

This assessment includes various parameters that ensure the business complies with all applicable regulations and meets strict safety standards. 

The purpose is for ensuring that the business operations will run safely and won’t harm the surrounding community or environment.

The company that need NIB at risk will also a be subject to further supervision by the authorities. 

This supervision can take the form of routine inspections, periodic reporting, or certain audits that the business must comply with.

The company may also need to obtain additional licenses or meet certain more specific requirements, such as: 

  • Special certifications
  • Training for workers
  •  Implementation of safe and environmentally friendly technologies. 

These requirements are designed to minimize the potential risks that may arise from the business activities.

Risk Assessment Factors

Risk Assessment Factors

There are some criterias used by the government or relevant agencies to assess the potential risks of a business, including:

Environmental Impact

This factor covers the potential impact that business activities may have on the surrounding environment, such as: 

  • Air, water, or soil pollution
  • Deforestation, or 
  • Other ecosystem damage.

Health and Safety

Companies with potential risks to the health and safety of the public or their workers will be assessed more rigorously. 

For example: potential risk of occupational accidents, exposure to hazardous materials or product contamination, etc. 

Social Impact

This factor refers to the impact that business activities may have on surrounding communities, such as: 

  • Population relocation
  • Social conflict
  • Economic inequality

Legal Compliance

Enterprises will be assessed based on their level of compliance with applicable rules and regulations. It’s including the environmental, health, safety, and labor laws.

Risk Management Capacity

The ability of enterprises to manage and mitigate risks associated with their operations also factors into the assessment. 

This includes effective risk management systems, employee training, and investment in safe and environmentally friendly technologies.

Key Differences between NIB and NIB at Risk

The main difference between NIB and NIB at Risk lies in three things, namely: 

Management Process

The first point of difference between NIB and NIB at risk is in the process of obtaining them. 

NIB can be obtained through online registration at the OSS system without having to go through an in-depth risk assessment. 

In contrast, to obtain an NIB at Risk, businesses must go through a more rigorous additional assessment process. 

Supervision

Companies that are required to have NIB at risk will receive more intensive supervision than those with ordinary NIB.

This intensive supervision generally involves the authorities, including relevant government agencies. 

License and Requirements

The final difference between NIB and NIB at risk relates to the license and its other requirements.

Businesses with an NIB at risk may need to fulfill some additional requirements from the general NIB, such as: 

  • Special certifications
  • Training for workers
  • The application of environmentally friendly technology 

Examples of Companies that Require NIB and NIB at risk

To make it easier for you to understand, here are some examples of companies that require NIB and NIB at risk: 

  • NIB: retail shops, small and medium enterprises (SMEs) such as food stalls or clothing stores.
  • NIB at risk NIB: chemical plants, mines, or hospitals.

NIB and NIB at Risk are both important for business legality in Indonesia. That’s why you need to know the detail about them correctly. 

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