Sunglasses—check. Beach gear—check. Leave the work laptop behind—check. There’s no question Indonesia continues to attract beachlovers and adventure-seekers from across the globe. The impact of and dependency on tourism cannot be overstated in many areas of Indonesia’s archipelago. In fact, tourism continues to be one of the most flourishing industries with new companies seeking to capitalize.
The Indonesian Government launched new licensing procedure system in the middle of 2018: the Government Regulation No. 24 of 2018 concerning Integrated Business Licensing E-Service (the “OSS Regulation”). The new system is commonly called the Online Single Submission (the “OSS”) system. The government is trying to implement a one-stop-shop policy for business licensing. Under the OSS system, all business licenses shall be issued through this OSS system. However, referring to Article 41 of the OSS Regulation, Business License and/or Commercial License or Operational License shall be effectively valid if the businessmen or business actors fulfill the Commitment (the capital sum pledged to be invested and other specific requirements under prevailing regulations to be satisfied) and fully pay the business licensing fees in accordance with the prevailing law and regulations (if any).
As the consequence, many ministries and agencies are issuing implementation regulations to ensure the legal certainty for business actors investing in Indonesia. Of course, we aim to focus on the Ministry of Tourism here.
In response to the OSS Regulation, the Ministry of Tourism issued the Minister of Tourism Regulation No. 10 of 2018 concerning Integrated Business Licensing E-Service in the Tourism Sector (“Tourism OSS Regulation”). Based on Tourism OSS Regulation, a tourism business consists of these following business fields:
- Tourist attraction;
- Tourism area;
- Tourist transportation services;
- Travel services;
- Food and beverage services;
- Provision and accommodation;
- Organizing entertainment and recreational activities;
- Organizing meetings, incentive trips,
- Conference and exhibition;
- Tourism information services;
- Tourism consulting services;
- Guide services;
- Water tourism; and
The Tourism OSS Regulation stipulates required tourism business licenses as follows:
- Business License, in the form of Tourism Business Registration License or Tanda Daftar Usaha Pariwisata (TDUP); and
- Commercial or Operational License, in the form of Tourism Business Certificate or Sertifikat Usaha Pariwisata.
The TDUP mentioned above is issued via OSS based on the Commitment. Therefore, to make the TDUP effectively valid, business actors must fulfill the Commitment of the TDUP as follows:
- Location License;
- Environmental License;
- Building Permit or Izin Mendirikan Bangunan (“IMB”) or office lease agreement, if the business actors rent an office for their business; and
- Water Location Permit and Water Management Permit regulated by the minister in charge of government affairs in the field of maritime (specific requirement for tourism businesses that use the sea permanently).
After the issuance TDUP via OSS, the businesses (which have obtained Tourism Business Standard and Tourism Business Certification Institution) must acquire the Tourism Business Certificate (“TBC”) within a specific time period based on the size of their business category. Large businesses must obtain the TBC within 2 (two) years; medium sized businesses within 4 (four) years; and small/micro businesses within 6 (six) years.
There no doubt that the OSS System has made impressive improvements toward making the process of forming a tourism company more transparent and efficient. For information on how SLF can further assist you to best comply with the ins and outs involved with your new tourism business,please contact us.
Written by Juliani Hanly, S.H.