START NOW – Starting a convection business requires various preparations, one of which – of course – is obtaining a convection business license. 

By having a convection business license, you’ll not only comply with government regulations, but also get more opportunities to growth. 

Definition and Types of Convection Businesses

Convection business is a business sector that engaged in the production or supply of large quantities of clothing or textiles. 

This business sector has a very promising prospect, considering that clothing is one of the primary human needs.

Unlike tailors who work based on orders, convection companies continuously produce some clothes and distribute them to the market.

There are times when the company also receives orders from customers and produces or supply them in certain large quantities.

There are several types of convection companies that we can find operating in Indonesia, including:

Apparel Convection

An apparel convection company focuses on producing ready-to-wear clothes, such as t-shirts, shirts, pants, jackets, and others. 

These companies usually sell their products in bulk to clothing stores or distributors.

Uniform Convection

This type of convection business company specializes in making uniforms for schools, companies, government institutions, and others.

Generally, uniform production requires certain criteria and standards to ensure uniformity and consistent product quality.

The main advantage of this type of convection business is that it already has a definite target market

That way, the level of product sales is more certain.

Formal Wear Convection

This convection company specializes in producing formal clothing that is usually used for official events or work. 

The examples of formal wear that produced by this company may include suits, blazers, dresses, pants, etc. 

Sportswear Convection

As the name implies, this convection company specializes in producing clothing for sports activities, such as jerseys, tracksuits, and swimwear. 

Generally, sportswear requires some different materials and production techniques to ensure comfort and durability.

Kidswear Convection

Not only for adults, there are also convection companies that specialize in providing baby and children’s clothing needs.

Children’s convection companies require special attention in the selection of materials that are safe and comfortable for children’s skin.

Clothing Accessories Convection

In addition to clothing, some convection businesses also produce accessories, such as hats, bags, belts, and others fashioned complements.

Types of Convection Business Licenses 

Just like any other business, a convection company also requires a business license in order to operate legally.

There are several types of convection business license that you need to obtain, namely:

Business Identification Number (NIB)

NIB is a basic license that function as an identity number for every business activities. It is issued by the Investment Coordinating Board (BKPM). 

This NIB can also be used as a Company Registration Certificate (TDP), Importer Identification Number (API), and customs access.

Trade Business License (SIUP)

SIUP is required for businesses engaged in trade, including the buying and selling of convection products. SIUP is issued by the local Trade Office.

There are four types of SIUP whose ownership is adjusted to the scale of the company, namely: 

• Micro SIUP
• Small SIUP
• Medium SIUP
• Large SIUP

Industrial Business License (IUI)

Industrial-scale convection businesses are also required to have an IUI. The authorized party to issue this business license is the Industry Office.

Building Construction Permit (IMB)

If you are going to build or change a building for your convection business, you need to have an IMB. 

This IMB serves to ensure that your building is in accordance with the designation and safety standards.

Environmental Permit

The Indonesian government also requires convection businesses, especially those in the form of manufacturing plants, to have an environmental permit.

This is to anticipate the possibility of the business producing liquid waste or air pollution that can pollute the environment.

Convection Business License Registration Process

Here are the steps you need to take to obtain a convection business license:

Preparing Documents

Documents that you need to prepare for the registration process usually include:

• KTP and NPWP of the owner: The identity of the business owner.
• Business Establishment Deed: A deed that contains information on the establishment of a convection business.
• Business Domicile Certificate (SKDU): A letter explaining the location of the business issued by the local urban village.
• Technical Documents, such as building plans, environmental permits, and others according to the needs of the convection business.

Submitting an Application

You can submit the convection business license applications through:

• OSS (Online Single Submission) website that will make it easy for entrepreneur to take care of licensing online. 

You only need to fill in the e-form and upload the digital file of the requirement documents. 

• Related Agency;  such as the Trade Agency, Industry Agency, or Environment Agency.

Verification and Survey Process

After you submitted the application for business licenses, the relevant agencies will conduct document verification and field survey. 

The purpose is to check the conformity between the documents you’ve submitted and the actual conditions in the field.

Permit Retrieval

If all of the requirements have been met and the verification process is complete, your business license will be issued. 

You can collect the license at the relevant agency office or through the OSS platform (if you’re applying online).

Why is a Convection Business License Important?

To equip your convection company with a business license does require time and effort. However, it will provide benefits that are worth it. 

Here are some of the benefits you can get for having a complete convection business licenses:

Legal Certainty

A business license is proof of legality from the government stating that a business has met certain requirements to operate. 

So, your business will be legally recognized and can avoids the risk of being forcibly shut down by the authorities.

Customer Trust

Of course, you won’t doubt the fact that consumers tend to have more trust in businesses that have official licenses.

You will even have the opportunity to work with government agencies for uniform procurement.

Access to Financing

The banks and financial institutions are also more likely to lend to businesses that have official licenses.

Ease of Export

Having business licenses that ensured the company legal status is one of the main requirements to expand to international markets 

So, make sure to have convection business licenses so that your company can thrive and succeed in this competitive market.