Licensing Reform :

Online Single Submission (OSS)

Jakarta, August 2018

 INDONESIA COMPETITIVENESS

3,90% ASEAN Economic Growth 2017

5,03%
6,08%
6.70% 1 Indonesia have to increase its
competitiveness with other Countries
especially in the region

5,90% 2 One of the main driver of economic

growth is through investment.
Indonesia has to foster and
accelerate its investment in order to
be competitive.

GDP=
Consumption + Investment
+ Government Spending
+ Net Exports
The Investment Coordinating Board of the Republic of Indonesia
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Indonesia’s Doing Business Comparison to ASEAN and BRIC Countries

ASEAN Country BRIC

Country DB 2017 DB 2018 Country DB 2017 DB 2018

Singapore Russia 40 35
2 2

Malaysia 23 Indonesia 91 72
24

Thailand 46 26 China 78 78

Brunei 72 56 India 130 100

Vietnam 82 68 Brazil 123 125

Indonesia 91 72

Philippines 99 113
19
Lao PDR 139 141 Ease of Doing 72
Business Indonesia,
91
2013-2017 106
114
120
129

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

2013 2014 2015 2016 2017 2018
Coordinating Minister of Economic Affairs. The Investment Coordinating Board of the Republic of Indonesia
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 MAIN INVESTMENT OBSTACLES

Based on 190 investment cases in Working Group 4 Coordinating

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

32.6% 15.2% 17.3%

LAND REGULATION
LICENSING
AQUISITION 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


Tax incentives
for labor Shorter
  
dwelling time
Negative List of
Investment
Reform
Easier Visa
Application and
Regional Wages intensive Working Permits
industry


Incentives for

Acceleration on
infrastructure
  Lower

Incentive for
Transport 3 hours electricity rate
Industry and electricity licensing for industry property

e- OSS
 EODB
Ease of
% commerce
Logistic
INSW and
lower logistic Online Single
Land Doing Affordable Incentive for cost Submission
aquisition Business housing e-commerce
Industry
acceleration Improvement

The Investment Coordinating Board of the Republic of Indonesia

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 ACCELERATION ON DOING BUSINESS
TRHOUGH S I K

“Licensing reform by
1.
changing the business STANDARDIZATION
process and its (National and
International)
environment”

5. Ensure the Safety, 2. System

REGULATION: Health, Security and improvement –
Environmental
1. Presidential Regulation aspect (K3L) INTEGRATION
Number 91 Year 2017
2. Government Regulation
Number 24 Year 2018
REGULATION
3. BKPM Regulation Number 6
Year 2018
4. BKPM Regulation Number 7
Year 2018 4. Monitoring by
3. Commitment
certified officers

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
BEHAVIOUR
CHANGE
Government
Officers

• 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)

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.

The Investment Coordinating Board of the Republic of Indonesia

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 OSS SCOPE

Scope of Sectors
1 All sectors of business except:
9

Mining, Oil and Gas and Finance.

License Issuance Authority

2 The government regulation supersedes all licensing authority from
Ministers, Governors, Regents and Mayors to the OSS System.

Who are the Business License Applicants?

3 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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 TYPE OF LICENSES

What type of licenses are issued through the OSS System ?

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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

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 PRINCIPLE OF BUSINESS LICENSE ISSUANCE THROUGH OSS

1. The OSS System is a processor which holds the principle of “self 11

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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 BUSINESS PROCESS

Business Process through the OSS System:

12
• 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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 CONTROLLING AND IMPLEMENTATION OF BUSINESS LICENSING

13

13

Ministries, institutions, and/or local governments

shall exercise control over:
 Fulfillment of commitment;
 Compliance with standards, certification, licenses and/or
registration; and / or
 Business and/or activity,
 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)

DB 2018 Businesses shall first obtain Article of Association
NO. PROCEDURES TIME TO
ASSOSIATED COST through AHU online system, before setting up OSS
COMPLETE
1 Pay fee for obtaining clearance of company name 1 day Rp. 100.000
account
Obtain clearance for the company’s name at the
2
Ministry of Law and Human Rights
Online Included in procedure 3 • Article of Association
Arrange for a notary to obtain the standard form of
1 day
• NPWP
the company deed and notarize company documents. In accordance with the
3 (simultaneous
(In accordance with Law 30/2004 on Notaries, Article provision of law
with procedure 2)
36: 1 - 2,5% from object value in certificatee)
Apply to the Ministry of Law and Human Rights for Less than 1 day
4 Included in procedure 6
approval of the deed of establishment (online)
5 Apply for the certificate of company domicile 2 days No charge
Business Identification Number
Pay for the non-tax state revenue (PNBP) fees for legal
6 1 day ± Rp. 900.000 (NIB) •
services at a bank Investment Registration • BPJS
Apply at the Ministry of Trade for the permanent • Certificate of company Ketenagakerjaan
7
business trading license (SIUP) and the company
7 days No charge
registration (TDP) • BPJS Kesehatan
registration certificate (TDP) from DPMPTSP for • Importer Identification
Jakarta • Fiscal incentives
Number (API)
Register with the Ministry of Manpower through (TA, TH)
• Customs Access (Akses
The Information System on Company’s Manpower
8
Mandatory (Sistem Informasi Wajib Lapor
1 day No charge Kepabeanan)
Ketenagakerjaan /Sinlapnaker)
7 days
Apply for the Workers Social Security Program (BPJS (simultaneous
9 No charge
Ketenagakerjaan) with procedure
10)
7 days • Business licence, i.e SIUP
10 Apply for Healthcare Insurance with BPJS Kesehatan (simultaneous No charge
with procedure 11)
1 day
Obtain a taxpayer registration number (NPWP) and a
11 (simultaneous No charge
VAT collector number (NPPKP)
with procedure 12)
Total 11 Procedures for Starting a Business 22 days Rp. 1.000.000
The Investment Coordinating Board of the Republic of Indonesia
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 TRANSITION OF LICENSING APPLICATION
BKPM Regulation Number 13 Year 2017

BKPM Regulation Number 6 Year 2018

LICENSING PREPARATION CONSTRUCTION PRODUCTION
STAGE

OLD Principal License/ Facilities + Ministries License + Business License+ Requirement of

Regional License other licensing
MECHANISM Investment Registration standard
3xapplication with SPIPISE
SPIPISE SPIPISE + Ministries and regional
Different licensingformat
system

NEW Business Identification Business License Commercial/Operational Post

MECHANISM Number License Audit
COMMITMENT COMMITMENT
'NIB'

1 SELF DECLARATION SELF

• Enviromental Permit DECLARATION
xapplication • IMB • SNI
•
• SLF 'OSS System' •
CPOB
CPAKB
‘One’ Licensing Format• CPOTB

The Investment Coordinating Board of the Republic of Indonesia

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Sumber: Kantor Kemenko Perekonomian, 2018
 LICENSING SIMPLIFICATION (1)

Num Sector Before After Remarks

permit 68 permit 46 • Permit integration and removal

• Non-Permit integration and removal.
1 Transportation Non- Non- Approval is classified as permit
129 73 • Already confirmed by sector
permit permit

permit 26 permit 12
• 29 combined*
2 Agriculture Non- Non-
35 18 • Already confirmed by sector
permit permit
permit 32 permit 11
• Permit integration and removal. SIUP is
principal permit for each sub-sector
3 Marine and Fishery Non- Non-
47 33 • Non-Permit integration and removal
permit permit • Already confirmed by sector

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

Public Works and Environmental Permit (AMDAL) and 3
4 Non- Non-
Housing 8 3 removed
permit permit • Already confirmed by sector
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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 LICENSING SIMPLIFICATION (2)

Num Sector Before After Remarks

permit 39 permit 16
Environment and • 20 combined
5 Non- Non-
Forestry 5 7 • Already confirmed by sector
permit permit
permit 86 permit 41
• 68 combined* and 14 removed
6 Trade Non- Non-
55 4 • 10 removed
permit permit
permit 6 permit 5 • Some permits are combined and 3 are
7 Industry Non- Non- removed
44 15 • Already confirmed by sector
permit permit
permit 36 permit 10 • 32 combined*, 1 changed into
Communication and
8 Non- Non- standardization
Informatics 1 8
permit permit • Already confirmed by sector
permit 31 permit 15 • 22 combined*, 3 changed into
9 Health Non- Non- standardization and 6 standardization
2 10 • Already confirmed by sector
permit permit
permit 1 permit 1
10 Tourism Non- Non- • Already confirmed by sector
2 2
permit permit
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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 LICENSING SIMPLIFICATION (3)

Num Sector Before After Remarks

permit 16 permit 6
• 2 combined and 2 removed
11 Education and Culture Non- Non-
1 3 • Already confirmed by sector
permit permit
permit 5 permit 3
Research and Higher • 2 removed
12 Non- Non-
Education 0 0 • Already confirmed by sector
permit permit
permit 9 permit 9
• 2 registration removed
13 Manpower Non- Non-
4 2 • Already confirmed by sector
permit permit
permit 12 permit 8
• 6 combined and 1 removed
14 Finance Non- Non-
8 2 • Already confirmed by sector
permit permit
permit 43 permit 6
Energy and Mineral • 3 changed into standardization
15 Non- Non-
Resources 30 3 • Already confirmed by sector
permit permit
permit 6 permit 6
16 Religion Non- Non- • Already confirmed by sector
0 0
permit permit
permit 12 permit 11 • 4 combined and 3 removed
17 Food and Beverage Non- Non-
8 6 • Already confirmed by sector
permit permit
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 to

resubmit their application through OSS portal, and still be able to continue
their 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 required
licenses through OSS portal.
3. There are 17 sectors covered in OSS. Otherwise, a list of 29 business licenses
which are not to be issued under OSS (not included in Government
Regulation Number 24 Year 2018), includes licenses within sectors:
a. Energy and Natural Resources, with electricity as subsector
b. Energy and Natural Resources, with petroleum and natural gas as
subsector
c. Energy and Natural Resources, with mineral and coal as subsector
d. Public works and Housing
e. Custom and Tax facilities
f. Investment (i.e. License for foreign representative and branch office)

The Investment Coordinating Board of the Republic of Indonesia

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 Thank You
Terima Kasih

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. info@bkpm.go.id

www.bkpm.go.id
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