99% of Indonesian Micro, Small, and Medium Enterprises (MSMEs) are not legally registered.

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Adi Ahdiat 27/10/2023 15:20 WIB

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According to BPS data, in 2022 there were approximately 4.3 million micro and small industrial business units in Indonesia, around 99% of which lacked business entity or legal entity status.

Number of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia by Legal Entity Status (2018-2022)

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99% of Indonesian Micro, Small, and Medium Enterprises (MSMEs) are not legally registered.

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Number of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia by Legal Entity Status (2018-2022)

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According to data from the Central Statistics Agency (BPS), in 2022 there were approximately 4.3 million micro, small, and medium enterprises (MSMEs) in Indonesia.

The MSMEs included in this data are processing/manufacturing industries with fewer than 20 employees per business unit.

In 2022, 99.52% of Indonesian micro, small, and medium enterprises (MSMEs) did not have business entity or legal entity status.

"MSMEs to date are still categorized as informal businesses with low productivity and technology use," said BPS in its report.

Despite this, in 2022 there were also a small number of MSMEs that already had commanditaire vennootschap (CV) status, with a proportion of 0.39%.

Then, MSMEs with limited liability company (PT) status accounted for 0.06%, cooperatives 0.03%, and foundations 0.01%, with the details shown in the graph.

A CV is a business entity that has a distinction between active owners (managers/administrators) and passive owners (investors).

However, a CV is a "business entity without legal entity status," where there is no formal separation between the company's assets and the personal assets of its owners.

Business entities that have implemented this asset separation are called "business entities with legal entity status," and their status can be a PT, foundation, or cooperative.

According to the Director General of General Legal Administration (AHU) of the Ministry of Law and Human Rights, Cahyo R. Muzar, legal entity status can provide advantages for business actors.

"With a formal legal entity, if a dispute arises, it can separate personal and business responsibilities," said Cahyo, as reported by *Katadata.co.id*, Thursday (12/10/2023).

"Business actors with a formal legal entity can also gain credibility and trust from business partners," he continued.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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99% of Indonesian Micro, Small, and Medium Enterprises (MSMEs) are not legally registered.

99% of Indonesian Micro, Small, and Medium Enterprises (MSMEs) are not legally registered.

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99% of Indonesian Micro, Small, and Medium Enterprises (MSMEs) are not legally registered.

99% of Indonesian Micro, Small, and Medium Enterprises (MSMEs) are not legally registered.

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