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
The Investment Coordinating Board of the Republic of Indonesia
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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.
The Investment Coordinating Board of the Republic of Indonesia
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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
The Investment Coordinating Board of the Republic of Indonesia
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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
The Investment Coordinating Board of the Republic of Indonesia
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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
The Investment Coordinating Board of the Republic of Indonesia
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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
The Investment Coordinating Board of the Republic of Indonesia
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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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9
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.
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12
BUSINESS PROCESS
Fulfillment of commitment;
Compliance with standards, certification, licenses and/or
registration; and / or
Business and/or activity,
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CONTROLLING AND IMPLEMENTATION OF BUSINESS LICENSING
Ministries, institutions, and/or local governments
shall exercise control over:
The Investment Coordinating Board of the Republic of Indonesia
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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.
The Investment Coordinating Board of the Republic of Indonesia
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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)
The Investment Coordinating Board of the Republic of Indonesia
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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'
The Investment Coordinating Board of the Republic of Indonesia
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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*
• Already confirmed by sectorNon-
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
The Investment Coordinating Board of the Republic of Indonesia
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Num Sector Before After Remarks
5Environment and
Forestry
permit 39 permit 16• 20 combined
• Already confirmed by sectorNon-
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
• Already confirmed by sectorNon-
permit44
Non-
permit15
8Communication and
Informatics
permit 36 permit 10 • 32 combined*, 1 changed into
standardization
• Already confirmed by sectorNon-
permit1
Non-
permit8
9 Health
permit 31 permit 15 • 22 combined*, 3 changed into
standardization and 6 standardization
• Already confirmed by sectorNon-
permit2
Non-
permit10
10 Tourism
permit 1 permit 1
• Already confirmed by sectorNon-
permit2
Non-
permit2
LICENSING SIMPLIFICATION (2)
Non-Permit: Standard, Recommendation, Registration, Certification and Confirmation
*Combine with remarks : There are different requirements for different type of permit
The Investment Coordinating Board of the Republic of Indonesia
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Num Sector Before After Remarks
11 Education and Culture
permit 16 permit 6• 2 combined and 2 removed
• Already confirmed by sectorNon-
permit1
Non-
permit3
12Research and Higher
Education
permit 5 permit 3• 2 removed
• Already confirmed by sectorNon-
permit0
Non-
permit0
13 Manpower
permit 9 permit 9• 2 registration removed
• Already confirmed by sectorNon-
permit4
Non-
permit2
14 Finance
permit 12 permit 8• 6 combined and 1 removed
• Already confirmed by sectorNon-
permit8
Non-
permit2
15Energy and Mineral
Resources
permit 43 permit 6• 3 changed into standardization
• Already confirmed by sectorNon-
permit30
Non-
permit3
16 Religion
permit 6 permit 6
• Already confirmed by sectorNon-
permit0
Non-
permit0
17 Food and Beverage
permit 12 permit 11 • 4 combined and 3 removed
Non-
permit8
Non-
permit6 • Already confirmed by sector
LICENSING SIMPLIFICATION (3)
Non-Permit: Standard, Recommendation, Registration, Certification and Confirmation
*Combine with remarks : There are different requirements for different type of permit
The Investment Coordinating Board of the Republic of Indonesia
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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
www.bkpm.go.id
Thank YouTerima Kasih