Licensing Reform : Online Single Submission (OSS) OSS BKPM... · • CPOTB LICENSING STAGE Post Audit 3x application with Different licensing format 1 xapplication ‘One’ Licensing

Jakarta, August 2018

Licensing Reform :

Online Single Submission (OSS)

The Investment Coordinating Board of the Republic of Indonesia

2

INDONESIA COMPETITIVENESS

5,03%3,90%

6,08%

6.70%

5,90%

Indonesia have to increase its

competitiveness with other Countries

especially in the region

One of the main driver of economic

growth is through investment.

Indonesia has to foster and

accelerate its investment in order to

be competitive.

1

2

GDP=

Consumption + Investment+ Government Spending

+ Net Exports

ASEAN Economic Growth 2017


3

Country

India

DB 2018DB 2017

130

78

3540

123 125

100

China

Russia

Brazil

Country

Singapore

Malaysia

Thailand

Brunei

Vietnam

Indonesia

Lao PDR

DB 2018DB 2017

2

23

46

72

82

91

139

99 113

78

91

2

24

26

56

68

72

141

72

Philippines

Indonesia

Indonesia’s Doing Business Comparison to ASEAN and BRIC Countries

120114

91

106

2014 2015

Ease of Doing

Business Indonesia,

2013-2017

19

72

2016 2017 20182013

129

ASEAN Country BRIC

BKPM started to enganged in EODB reform since 2014 by assignment from

Coordinating Minister of Economic Affairs.


4

32.6% 17.3%15.2%

Based on 190 investment cases in Working Group 4 Coordinating

Ministry of Economic Affairs, the main obstacles in investment are:

MAIN INVESTMENT OBSTACLES

LICENSINGLAND

AQUISITIONREGULATION

AND POLICY

• Central Government

• Local Government

Required a

breakthrough

in licensing

reform


5

PRO INVESTMENT POLICY

16 Economic Packages

Predictable Minimum

Regional Wages

Easier Visa

Application and Working Permits

Tax incentives for labor intensive industry

Shorter dwelling time

Negative List of

Investment Reform

Incentives for

Transport Industry

Acceleration on infrastructure and electricity

3 hours

licensing

Lower

electricity rate for industry

Incentive for

property

Land

aquisition acceleration

EODB

Ease of Doing

Business Improvement

%Affordable housing

e-commerce

Incentive for e-commerce

Industry

Logistic

INSW and lower logistic

cost

OSS

Online Single Submission


6

ACCELERATION ON DOING BUSINESSTRHOUGH S I K

“Licensing reform by

changing the business

process and its

environment”

1. STANDARDIZATION

(National and International)

2. System improvement –

INTEGRATION

3. Commitment 4. Monitoring by certified officers

5. Ensure the Safety, Health, Security and

Environmental aspect (K3L)

REGULATION

REGULATION:

1. Presidential Regulation

Number 91 Year 2017

2. Government Regulation

Number 24 Year 2018

3. BKPM Regulation Number 6

Year 2018

4. BKPM Regulation Number 7

Year 2018


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OSS PARADIGM SHIFT

COMMITMENT FROM BUSINESS ACTOR AND GOVERNMENT OFFICER

• Business actors to realize the investment sereiously (provision: beyond the time limit of fulfillment of commitment, the permit is not valid/revoked)

• More responsive governmental apparatus (provision: negligence in checking the fulfillment of commitments of business actors, the license is considered effective)

BEHAVIOUR

CHANGE

Business

Actors

Government

Officers


8

GOVERNMENT REGULATION (PP)NUMBER 24 YEAR 2018

1. Regarding : Online Single Submission (OSS)

2. Effective since 21 June 2018

3. Starting from 1 June 2018, all licensing process are done through the OSS

system. Ministries and Local Government are no longer allowed to issue

licenses within the sectors stated in this regulation.

4. The purpose of the government regulation:

a. To simplify the process business licensing to become more efficient,

simple and modern.

b. Simplification of regulation (standardization, integration, coordination).

c. To increase investment.

d. Reformation of services system in line with current technology.

OSS has officially launched on 9 July 2018, with the Coordinating Ministry for

Economic Affairs as the lead institution.

Scope of Sectors

All sectors of business except:

Mining, Oil and Gas and Finance.

License Issuance Authority

The government regulation supersedes all licensing authority from

Ministers, Governors, Regents and Mayors to the OSS System.

Who are the Business License Applicants?

The Government Regulation stipulates applicants as follows:

a. Individual person.

b. Legal business entity (ie. Foreign Company (PT PMA), Local Company

(PMDN), State owned/region owned company (BUMN/BUMD), SME (Koperasi,

firm, CV/Persekutuan Commanditer), etc)

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OSS SCOPE

1

2

3

1. Business Identification Number (NIB)

a. as the company’s identification

b. also valid as Company Registration (TDP), Import

Identification (API) and Customs Access

c. each company can only have 1 (one) NIB

2. RPTK

3. Location Permit

4. Building Permit (IMB)

5. Environmental Permit (UKL/UPL, AMDAL)

6. Business License

7. Operational Permit

• Perseroan Terbatas;

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TYPE OF LICENSES

What type of licenses are issued through the OSS System ?

1. The OSS System is a processor which holds the principle of “self

declaration” to the investors applying for a license. This means that

the investor must provide valid information.

2. OSS issues the business license upfront before the investor fulfils

the requirements for the business license.

3. The Investor who has obtained a business license must then fulfil the

commitment along with the requirements necessary.

4. If the investor fails to follow through with the commitment, then the

business license will be null and void.

5. There will be a post audit by the local government officials who will

monitor the progress of the investor’s commitment.

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PRINCIPLE OF BUSINESS LICENSE ISSUANCE THROUGH OSS

Business Process through the OSS System:

• Investors register at OSS. OSS will then issue the Business

Identification Number (NIB)

• OSS will then issue the Business License and Commercial License

or Operational License based on the commitment;

• Investors are required to fulfill their Business License and

Commercial License or Operational License commitment to the

related Ministries both at national and regional level.

• Investors conduct payment (if any);

• Ministries, Agencies, Regional Government monitor the progress of

the investor to fulfill their commitment for the Business License and

Commercial License or Operational License.

12

12

BUSINESS PROCESS

Fulfillment of commitment;

Compliance with standards, certification, licenses and/or

registration; and / or

Business and/or activity,

13

13

CONTROLLING AND IMPLEMENTATION OF BUSINESS LICENSING

Ministries, institutions, and/or local governments

shall exercise control over:


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NEW BKPM REGULATION

BKPM Regulation Number 6 and 7 Year 2018

• Investment licensing procedures for sectors that are not yet regulated

in Government Regulation Number 24 of 2018 (29 types of licenses)

and investment facilities are regulated under BKPM regulation

number 6 of 2018 (Permit and License that are not included in

Government Regulation Number 24 Year 2018 will still be processed

via SPIPISE PTSP BKPM).

• The procedure of reporting of investment activity (LKPM) is regulated

in BKPM Regulation number 7 year 2018. Investors are still obliged

to submit LKPM to BKPM.


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TRANSITION OF STARTING A BUSINESS

EODB Online Single Submission (OSS)

NO. PROCEDURES

DB 2018

TIME TO COMPLETE

ASSOSIATED COST

1 Pay fee for obtaining clearance of company name 1 day Rp. 100.000

2Obtain clearance for the company’s name at the Ministry of Law and Human Rights

Online Included in procedure 3

3

Arrange for a notary to obtain the standard form of the company deed and notarize company documents. (In accordance with Law 30/2004 on Notaries, Article 36: 1 - 2,5% from object value in certificatee)

1 day (simultaneous with procedure 2)

In accordance with the provision of law

4Apply to the Ministry of Law and Human Rights for approval of the deed of establishment

Less than 1 day (online)

Included in procedure 6

5 Apply for the certificate of company domicile 2 days No charge

6Pay for the non-tax state revenue (PNBP) fees for legal services at a bank

1 day ± Rp. 900.000

7

Apply at the Ministry of Trade for the permanent business trading license (SIUP) and the company registration certificate (TDP) from DPMPTSP for Jakarta

7 days No charge

8

Register with the Ministry of Manpower through The Information System on Company’s Manpower Mandatory (Sistem Informasi Wajib LaporKetenagakerjaan /Sinlapnaker)

1 day No charge

9Apply for the Workers Social Security Program (BPJS Ketenagakerjaan)

7 days (simultaneous with procedure 10)

No charge

10 Apply for Healthcare Insurance with BPJS Kesehatan7 days (simultaneous with procedure 11)

No charge

11Obtain a taxpayer registration number (NPWP) and a VAT collector number (NPPKP)

1 day (simultaneous with procedure 12)

No charge

Total 11 Procedures for Starting a Business 22 days Rp. 1.000.000

Businesses shall first obtain Article of Association through AHU online system, before setting up OSS account

• Investment Registration• Certificate of company

registration (TDP)• Importer Identification

Number (API)• Customs Access (Akses

Kepabeanan)

• Article of Association• NPWP

Business Identification Number (NIB)

• Business licence, i.e SIUP

• BPJS Ketenagakerjaan

• BPJS Kesehatan• Fiscal incentives

(TA, TH)


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TRANSITION OF LICENSING APPLICATION

Sumber: Kantor Kemenko Perekonomian, 2018

PREPARATION CONSTRUCTION PRODUCTION

Principal License/

Investment Registration

Facilities + Ministries License+ Regional License

Business License + Requirement of other licensing standard

OLD MECHANISM

Business Identification Number

'NIB'

Business License Commercial/Operational License

NEW

MECHANISM

SPIPISE SPIPISE + Ministries and regional system

SPIPISE

COMMITMENT

SELF DECLARATION

• Enviromental Permit

• IMB

• SLF

COMMITMENT

SELF

DECLARATION

• SNI

• CPOB

• CPAKB

• CPOTB

LICENSING

STAGE

Post

Audit

3xapplication with

Different licensing format

1xapplication

‘One’ Licensing Format

BKPM Regulation Number 13 Year 2017

BKPM Regulation Number 6 Year 2018

'OSS System'


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LICENSING SIMPLIFICATION (1)

Num Sector Before After Remarks

1 Transportation

permit 68 permit 46 • Permit integration and removal

• Non-Permit integration and removal.

Approval is classified as permit

• Already confirmed by sectorNon-

permit129

Non-

permit73

2 Agriculture

permit 26 permit 12• 29 combined*


permit35

Non-

permit18

3 Marine and Fishery

permit 32 permit 11• Permit integration and removal. SIUP is

principal permit for each sub-sector

• Non-Permit integration and removal

• Already confirmed by sector

Non-

permit47

Non-

permit33

4Public Works and

Housing

permit 15 permit 5 • 5 combined*, 2 integrated process with

Environmental Permit (AMDAL) and 3

removed

• Already confirmed by sector

Non-

permit8

Non-

permit3

Non-Permit: Standard, Recommendation, Registration, Certification and Confirmation

*Combine with remarks : There are different requirements for different type of permit


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5Environment and

Forestry

permit 39 permit 16• 20 combined


permit5

Non-

permit7

6 Trade

permit 86 permit 41• 68 combined* and 14 removed

• 10 removedNon-

permit55

Non-

permit4

7 Industry

permit 6 permit 5 • Some permits are combined and 3 are

removed


permit44

Non-

permit15

8Communication and

Informatics

permit 36 permit 10 • 32 combined*, 1 changed into

standardization


permit1

Non-

permit8

9 Health

permit 31 permit 15 • 22 combined*, 3 changed into

standardization and 6 standardization


permit2

Non-

permit10

10 Tourism

permit 1 permit 1


permit2

Non-

permit2





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11 Education and Culture

permit 16 permit 6• 2 combined and 2 removed


permit1

Non-

permit3

12Research and Higher

Education

permit 5 permit 3• 2 removed


permit0

Non-

permit0

13 Manpower

permit 9 permit 9• 2 registration removed


permit4

Non-

permit2

14 Finance

permit 12 permit 8• 6 combined and 1 removed


permit8

Non-

permit2

15Energy and Mineral

Resources

permit 43 permit 6• 3 changed into standardization


permit30

Non-

permit3

16 Religion

permit 6 permit 6


permit0

Non-

permit0

17 Food and Beverage

permit 12 permit 11 • 4 combined and 3 removed

Non-

permit8

Non-

permit6 • Already confirmed by sector





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OSS IMPLEMENTATION

1. An existing business that currently hold the business license, no need toresubmit their application through OSS portal, and still be able to continuetheir commercial operation with the existing license.

2. An existing business that currently hold the business license, and wishes to,for example, expand its business or investment, will have to apply all requiredlicenses through OSS portal.

3. There are 17 sectors covered in OSS. Otherwise, a list of 29 business licenseswhich are not to be issued under OSS (not included in GovernmentRegulation Number 24 Year 2018), includes licenses within sectors:a. Energy and Natural Resources, with electricity as subsectorb. Energy and Natural Resources, with petroleum and natural gas as

subsectorc. Energy and Natural Resources, with mineral and coal as subsectord. Public works and Housinge. Custom and Tax facilitiesf. Investment (i.e. License for foreign representative and branch office)

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Badan Koordinasi Penanaman Modal

(BKPM)

Indonesia Investment Coordinating Board

Jln. Jend. Gatot Subroto No. 44

Jakarta 12190 - Indonesia

t . +62 21 525 2008

f . +62 21 525 4945

e . [email protected]

www.bkpm.go.id

Thank YouTerima Kasih

Documents

Licensing Reform : Online Single Submission (OSS) OSS BKPM... · • CPOTB LICENSING STAGE Post Audit 3x application with Different licensing format 1 xapplication ‘One’ Licensing