There is no special requirement or procedure to obtain national interest clearance of a transaction. If an investment is permitted by the DNI and satisfies the foreign investment capitalisation requirement, the transaction need only be completed, which the MOLHR must either approve or acknowledge after receiving notice of the transaction. This will be followed by the MOLHR’s online system automatic update to the OSS system. This means that business entities in Indonesia are required to be registered with the OSS system to have any changes of their business entity’s data automatically included within the OSS system. In the case where the OSS account is created upon the completion of a transaction, the OSS system will already record the data of the business entity based on the data recorded in the MOLHR’s online system.
Even though the OSS system does not refer to the BKPM regulations on the amount of capital investment, the OSS Institution announced on its website and OSS officials recently confirmed that the paid-up capital of a PMA company must be least 2.5 billion rupiah upon commencement of its investment. This is a change to the previous BKPM policy of 10 billion rupiah in paid-up capital. However, the total investment required remains the same (ie, more than 10 billion rupiah, 7.5 billion rupiah of which may consist of loan capital).
As an example, new investors must arrange for their limited liability company to be established prior to registering with the OSS system. This requires that they execute the deed of establishment for the limited liability company, for which MOLHR approval is required, and pay in their issued and paid-up capital. Once the company is established, it must create an account in the OSS system through the OSS website (www.oss.go.id) to obtain its NIB. This is required for all companies. Then, if the company is subject to article 4(2) of BKPM Regulation 6/2018, it must obtain a specific licence from the BKPM through its online system (ie, the National Single Window for Investment (NSWI)) (https://nswi.bkpm.go.id/).
The data required for registration in the OSS system are, inter alia:
- name and identity number (ID card or passport) of the company’s representative;
- residential address;
- business field, identified by a five-digit KBLI code.
- location of the capital investment;
- amount of planned capital investment;
- plan for the use of workers;
- business or activity contact number, or both;
- any request for fiscal, customs facilities and/or other facilities; and
- the tax identification registration number (NPWP) of an individual business executive. If a business actor that wishes to register a company with the OSS system has not yet obtained an NPWP, the integrated systems of the OSS and the Directorate General of Taxation will process the issuance of the NPWP.
Along with the NPWP, business actors can also obtain the registration documents for the Employment Social Security (BPJS) and the Health BPJS certificate of membership, the approval letter for the foreign employee utilisation plan, and fiscal incentives.
The OSS system implements business licensing, which includes the activities of the registration and issuance of permits, information on the compliance with permits, (ie, post-audit requirements), the provision of information on the obligation to pay certain fees to the relevant technical ministries, and the facilitation and supervision of licensing administration.
The attachment of GR 24/2018 lists the type of licences relevant to the above-mentioned sectors. Certain businesses are sufficiently licensed if they have acquired an IU but others may be required to obtain both an IU and an IKO. For example, based on the attachment of GR 24/2018, a web portal business is required to obtain an IU and an IKO, whereas business management consulting needs only an IU.
Through the OSS system, every business entity must acquire a NIB upon registration. A NIB serves as a certificate of company registration (TDP) and an importer identification number (API), and allows customs access for the business entity. A NIB is a mandatory requirement for a business entity to obtain a business licence.
Once the NIB has been obtained, a PMA company may directly proceed to obtain the IU. The OSS system will ask whether the PMA company’s business requires any construction of facilities. If the answer is yes, the OSS system will inform the PMA company that its IU will be issued immediately but that it must fulfil certain commitments, specifically to obtain a location permit, a water location permit, an environmental permit (Environmental Impact Analysis/Amdal or Environmental Management Effort and Environmental Monitoring Effort (UKL-UPL)), and a Building Construction Permit (IMB) upon the issuance of the IU. This commitment requirement does not apply to PMA companies that do not need to construct a facility to operate their business. For example, a PMA company that engages in management business consulting is not required to make a commitment because it can rent office space to operate its business.
Commitments imposed must be completed by one or more deadlines, which are determined by the type of the commitment. This is further explained in the response to question 11. Article 40 of GR 24/2018 provides that the OSS Institution may revoke the IU if the commitments imposed on the holder of an IU or an IKO are not fulfilled. Although an IU or an IKO can be obtained by a PMA company by completing the information required by the OSS system, the IU and IKO are not valid until the post-issuance requirements, if any, are fulfilled. Once the post-licensing commitments have been fulfilled and any relevant licensing fees (in the form of non-tax revenues) have been paid, the evidence of such fulfilment must be submitted to the OSS system, and the OSS system will then automatically be updated to indicate that the IU is effective. Some technical ministries also have online licensing systems that have been linked to the OSS system, and once the relevant ministry issues the permit or approval which serves as a post-licensing commitment, the ministry’s online licensing system will notify the OSS system that the commitment has been fulfilled.
An IU without a commitment requirement will be issued with a statement that it is already effective.
An IKO can also be issued the same day as the issuance of the IU, but may not be necessarily effective. The relevant ministry must determine and confirm whether the commitment has been completed. The BKPM and the relevant technical ministry will supervise and review the completion of the commitment for an IKO. Once the required commitment has been fulfilled and non-tax state revenues have been paid, the IKO issued by the OSS system will be valid.
Business entities need to determine what licences are required to be obtained by checking the attachment to GR 24/2018. However, in practice, the relevant ministries may not yet understand the procedure. For example, web portal companies are subject to the jurisdiction of the Ministry of Communication and Informatics (MOCI). Pursuant to GR 24/2018, internet companies must obtain both an IU and an IKO. The OSS system will issue the IU and IKO for web portal companies. However, when it comes to the requirement to register with the MOCI, the MOCI only requests at this time the NIB and IU of the web portal companies.
Although most PMA companies must comply with the mandatory requirement to file and obtain a NIB through the OSS system, the BKPM continues to supervise the licensing process of those business entities that are subject to the BKPM’s jurisdiction. In such cases, the licence application must be conducted online through the NSWI with the prerequisites listed in article 8 of BKPM Reg 6/2018, after the company obtains the NIB through the OSS system. In the event that the application cannot be submitted online, the application can be submitted offline at the BKPM’s Central PTSP using the format set out in the attachment of BKPM Regulation No. 6/2018.
The licensing procedure of the OSS and the BKPM may be carried out by the prospective investors themselves or their representatives, such as legal advisers or business consultants through a power of attorney (POA). The form of the POA is provided in the attachment to BKPM Regulation No. 6/2018 and must be submitted online along with other supporting documents. The OSS Institution does not provide any specific format for its POA.
Owing to the promulgation of GR 24/2018, the licences set out in the attachment of GR 24/2018 are no longer issued by the BKPM. However, if a company already obtained an IU, a licence of principle or an investment registration number from the BKPM during the BKPM regime, such documents continue to be valid and the reference numbers of such documents can be used to register with the OSS system.
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