Are SIUP and NIB the Same? Here Are the Differences, Functions, and Their Impact on Culinary Businesses

Many business owners still wonder, are SIUP and NIB the same? This question has become more common since Indonesia implemented a risk-based business licensing system through OSS. 

Some assume that NIB has completely replaced SIUP. Others believe both are still necessary to ensure full legal compliance.

If you are building a business, especially in the culinary sector, understanding the difference between SIUP and NIB is not just an administrative matter. 

Legal compliance affects credibility, ease of expansion, and opportunities to collaborate with online platforms and business partners. To avoid confusion, let’s start from the basics.

Are SIUP and NIB the Same? Here Is the Explanation

The short answer is no.

SIUP and NIB serve different functions and hold different positions within Indonesia’s business licensing system. The difference lies in the fundamental role of each document.

What Is SIUP and What Is Its Function?

SIUP, or Surat Izin Usaha Perdagangan, is a specific license granted to businesses engaged in trading goods or services.

The functions of SIUP in business practice include:

• Official proof that a business is licensed for trading activities
• A requirement for obtaining additional operational permits
• Supporting documentation for business partnerships
• A requirement for certain export and import activities

Before the implementation of the risk-based OSS system, SIUP was the primary license required for almost all trading businesses.

What Is NIB and What Is Its Function?

NIB, or Nomor Induk Berusaha, is an official business identification number issued through the OSS system.

Unlike SIUP, which is a sector-specific license, NIB functions as a national business identity number.

The functions of NIB include:

• A single official identity for the business
• Proof of formal business registration
• The basis for obtaining further operational permits
• Integration with taxation and customs systems

Therefore, businesses of all sizes, including home-based culinary businesses, are required to have an NIB as the foundation of their legal status.

Why NIB Is the Key in the Risk-Based Licensing System

Source: freepik.com

Since the implementation of the risk-based business licensing system, the licensing approach in Indonesia has changed significantly. The government no longer applies a single type of license to all businesses. 

Instead, licensing requirements are adjusted based on the level of risk associated with the business activity.

Risk in this context refers to the potential impact of a business on health, safety, the environment, and resource management. The higher the potential impact, the stricter the licensing requirements.

In general, risk levels are classified into four categories:

1. Low Risk

Only an NIB is required, and it also serves as the operational license.

2. Low Medium Risk

Requires an NIB and a Standard Certificate, usually in the form of a self-declaration of compliance.

3. High Medium Risk

Requires an NIB and a Standard Certificate that must be verified or validated by the government before full operation.

4. High Risk

Requires an NIB and additional specific permits issued by the relevant authorities.

Most businesses in the trading sector, including many culinary businesses such as restaurants, cafés, and coffee shops, fall into the low or low medium risk categories. That is why, in many cases, an NIB alone is sufficient as the legal foundation.

This is the main reason why NIB has become the key element in the current licensing system. Without an NIB, the process of obtaining other permits cannot proceed.

Has NIB Completely Replaced SIUP?

This is a common misconception. The honest answer is not entirely.

It is true that most low-risk trading businesses are no longer required to have a separate SIUP. In such cases, NIB effectively replaces SIUP.

However, there are certain conditions where SIUP is still required, especially for businesses categorized as high risk or those with specific KBLI classifications.

Examples of businesses that may still require SIUP include:

• Large-scale wholesale trading operations
• Certain export and import activities requiring additional customs documentation
• Businesses dealing with high-risk products such as pharmaceuticals or hazardous materials
• Specific types of direct selling activities with special classifications

This means that the assumption that SIUP is completely obsolete is inaccurate. The obligation to obtain SIUP depends on the business’s risk level and its classification under KBLI.

Therefore, before applying for permits, it is important to confirm the business risk category and KBLI code to avoid misunderstanding licensing requirements.

Read more: COGS in Business: Definition, How to Calculate It, and Management Strategies

Why SIUP and NIB Are Important for Culinary Businesses

In the food and beverage industry, legal compliance is often seen as purely administrative. In reality, its impact is much greater.

Here are several reasons why NIB, and in certain cases SIUP, are important for culinary businesses:

1. Legal Protection

Having an NIB ensures the business is officially registered and protected from potential sanctions or legal issues.

2. Increased Credibility

Suppliers, online platforms, and potential investors are more likely to trust a legally registered business.

3. Requirement for Online Platforms

Many food delivery platforms require proof of legal registration as part of the onboarding process.

4. Access to Funding and Expansion

Business loan applications and large-scale partnerships almost always require legal documentation such as NIB.

For culinary businesses aiming to grow from small to larger scale, legal compliance is not optional. It is essential.

How to Apply for NIB and SIUP Through OSS

Business licensing is now processed online through the OSS system. This system makes business registration faster and more integrated.

The documents typically required include:

• The business owner’s ID card
• Tax identification number
• Deed of establishment for incorporated entities
• Proof of business location ownership or lease
• Information about business activities according to KBLI

After the NIB is issued, the system will determine whether additional permits are required based on the business risk level.

For many small to medium-scale culinary businesses, the process is relatively straightforward compared to previous procedures.

Read more: Learn 9 Steps to Obtain Halal Certification for Your Culinary Business

Frequently Asked Questions About SIUP and NIB

1. Are SIUP and NIB the same?

No. NIB is a business identity number, while SIUP is a trading license that in many cases has been replaced by NIB.

2. Is NIB mandatory for all businesses?

Yes. Businesses of all sizes, including micro and small enterprises, must have an NIB as their legal foundation.

3. If a business already has an NIB, is SIUP still required?

It depends on the business risk level and KBLI classification. For most low-risk trading businesses, NIB is sufficient.

4. Do home-based culinary businesses need an NIB?

Yes. Legal registration is important for partnerships, online platforms, and access to financing.

5. Is the NIB application process complicated?

No. As long as the required documents and data are complete and accurate, the process can be completed online through OSS.

Conclusion

The question of whether SIUP and NIB are the same is common, especially among new business owners. 

The answer is clear: they are different. NIB has become the primary business identity within Indonesia’s risk-based licensing system and in many cases replaces SIUP. 

However, for businesses with certain risk levels, SIUP may still be required.

Understanding these differences helps culinary businesses operate more securely, professionally, and with greater readiness for growth.

Once legal compliance is secured, the next step is ensuring operations run efficiently and in an integrated manner.

The ESB ecosystem provides a digital solution for food and beverage businesses, covering POS systems, ERP, kiosks, online food ordering systems, supply chain management, and queue management systems.

ESB POS is a comprehensive cashier application specifically designed for culinary businesses. 

It helps detect and prevent fraud, manage menus and promotions, provides advanced table management features such as table linking and split bills, supports multiple cashiers, and includes a customer display for order verification.

It is integrated with GrabFood, GoFood, and ShopeeFood, and includes loyalty programs, reservation systems, digital vouchers, and a kitchen display system that helps kitchen staff process orders faster. 

A deposit system for food court concepts is also available. For businesses looking to fully digitalize their culinary operations, the ESB ecosystem can be a strategic next step.

Contact the ESB team to consult your restaurant and culinary business needs.