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New OSS System Makes Business Licenses Easier Than Ever

New OSS System Makes Business Licenses Easier Than Ever

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When entrepreneurship in on the mind, the last thing anyone wants is a loss of momentum. Getting a business license shouldn't feel like walking in the sand when it comes to the paperwork involved. Great news!

The Indonesian Coordinating Ministry for Economic Affairs already officially announced a new system in Integrated Licensing Services Electronics on Monday, 9 July 2018. This new Online Single Submission (OSS) launch is launched based on the Government Regulation Number 24 Year 2018 regarding Electronic Integrated Licensing Services (“PP 24/2018”). The issuance of OSS demonstrates the government's effort to simplify business licensing and create a fast, inexpensive licensing service model. In fact, investors will be able to have business licenses within 1 (one) hour. Wow!

In the previous licensing process, all license applications were submitted through One Stop Integrated Service or Pelayanan Terpadu Satu Pintu (PTSP). But for foreign investors, business licenses were submitted through PTSP to the Indonesia Investment Coordinating Board or Badan Koordinasi Penanaman Modal (BKPM). However, the OSS system launched under the Coordinating Ministry for Economic Affairs with the cooperation among related ministries and other institutions. Minister for Economic Affairs of Indonesia, Mr. Darwin Nasution, said that for the current moment, OSS is held under the Ministry for Economic Affairs and supported by Indonesia National Single Window (INSW) and other related Ministries. However, this is just a transitional period while preparing the permanent execution in BKPM.

The issuance of this new system also launched a new license called the Business Registered Number or Nomor Induk Berusaha (NIB), which can be obtained by all investors. The NIB itself is based on the PP 24/2018 as a businesses’ identity issued by the OSS after businesses register their business activities in the OSS system. Businesses can be individuals, business entities, and/or legal entities. Pursuant to the provisions within article 26 PP 24/2018, which state that NIB is also valid as:

  • Company Registered Certificate or Tanda Daftar Perusahaan (TDP);
  • Import License or Angka Pengenal Import (API); and
  • Custom Access Rights.

Basically, all business licenses currently are now issued through the OSS system. However, based on the Announcement Letter No. 2/Pengumuman/A.8/2018 issued by BKPM concerning Central PTSP execution in BKPM relating to PP. 24/2018, it states that Central PTSP in BKPM remains open as usual to serve businesses who need information, assistance, and consultation, including:

  1. Giving consultation regarding information on investment policies in certain sectors;
  2. Processing business licensing applications which are not regulated in PP. 24/2018, served through the Center's PTSP at BKPM;
  3. Helping to clarify the procedure of requesting permits through the OSS system;
  4. Helping to facilitate the problems faced by businesses in realizing their investment in Indonesia;
  5. Synchronizing and coordinating with relevant Ministries / Institutions including with Provincial, Regency / Municipal Governments, Administrators of Special Economic Zones and Free Trade Zone and Free Ports.

Meanwhile, there are still several types of business licenses, which have not been regulated in PP 24/2018. They are as follows:

No. Sectors License Type
1 Energy and Mineral Resources

Subsector Electricity:

  1. Geothermal License;
  2. Approval of Geothermal Business Support.

Subsector Oil and Gas:

  1. Oil and Gas Data Utilizing License;
  2. Survey License;
  3. Oil and Gas Storage Business License (Temporary/Permanent);
  4. Oil and Gas Processing Business License (Temporary/Permanent);
  5. Oil and Gas Transportation Business License (Temporary/Permanent);
  6. Oil and Gas Common General Trading Business License (Temporary/Permanent);
  7. Representative Office of Oil and Gas Subsector License.

Subsector Mineral and Coal:

  1. Exploration Mining Business Permit;
  2. Termination of Mining Business Permit due to reversion;
  3. Production Operation Mining Business Permit specialize to the transportation and selling and its extension;
  4. Production Operation Mining Business Permit and its extension;
  5. Production Operation Mining Business Permit specialize in processing and/or refining and its extension;
  6. Temporary License for transportation and selling;
  7. Production Operation Mining Business Permit for selling;
  8. Mining Services Business License and its extension;
2 Public Works and Public Housing
  1. Property Enterprise and Developing Business License;
  2. Residential Business License
3 Finance
  1. Providing facilities for the import of machinery, capital goods and materials for investment in industrial sectors and industrial that produce services;
  2. Providing facilities for the import of machinery, capital goods of the electricity sector;
  3. Providing facilities for the machinery, capital goods for work-contracts and PKP2B;
  4. Proposing Tax Holiday facilities;
  5. Proposing Tax Allowance facility.
4 BKPM
  1. Representative Office, other than for the oil and gas sectors, trading and construction;
  2. Opening Branch Office Permit, other than the trade and transportation sectors (transportation management services) which business license is issued by Central PTSP in BKPM;
  3. Limited Stay Visa Permit Recommendation as the shareholders;
  4. Recommendation of changing status from visit stay permit into Temporary Stay Permit or Izin Tinggal Sementara (ITAS);
  5. Recommendation from Temporary Stay Permit (ITAS) to become Permanent Stay Permit (ITAP).

Making the process simpler and more transparent will surely encourage growth and help tip the scales for those considering starting a new venture. However, legal advice should be sought on which type of business licenses are necessary to avoid any potential problems. Please contact Schinder Law Firm for assistance.

Jakarta, 13 August 2018

Written by Juliani Hanly, SH




New OSS System Makes Business Licenses Easier Than Ever