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Print articleBKPM Regulation No. 1 of 2020: Guidelines on the Provision of Integrated Electronic Business Licensing Services
April, 2020 - Mira Ayu Lestari, Putri Rachelia Azzura
Overview
On 1 April 2020, the Investment Coordinating Board (Badan Koordinasi Penanaman Modal – “BKPM”) issued BKPM Regulation No. 1 of 2020 on Guidelines on the Provision of Integrated Electronic Business Licensing Services (“BKPM Reg. 1/2020”).This regulation was issued to improve and streamline the licensing services provided through the Online Single Submission (“OSS”) System, to implement Article 94 (1) of Government Regulation No. 24 of 2018 (“GR 24/2018”) and Presidential Directive (Instruksi Presiden) No. 7 of 2019 on the Acceleration of the Ease of Doing Business. Therefore, in addition to the existing BKPM regulations related to the OSS system, BKPM Reg. 1/2020 sets out the norms, standards, procedures, and criteria as guidelines on the issuance of business licenses through the OSS system.In principle, BKPM Reg. 1/2020 provides guidance for BKPM to administer the newest version of the OSS system, version 1.1. Hence, this regulation acts as an implementing regulation of GR 24/2018 and reinstates certain BKPM policies applied in order to simplify business licensing through the OSS system.Below is a summary of the key provisions of BKPM Reg. 1/2020.
The Requirement regarding the Value of the Investment and Capital
Article 6 of BKPM Reg. 1/2020 now specifically requires a foreign investment company (PMA) to meet the total investment value of more than IDR10,000,000,000, excluding the value of its land and buildings. The total investment value applies for each line of business categorized under the relevant 5-digit Standard Indonesian Business Classification (Klasifikasi Baku Lapangan Usaha Indonesia – “KBLI”) (currently provided in Presidential Regulation No. 44 of 2016).In addition, BKPM Reg. 1/2020 provides the detailed total investment values which apply to PMA companies engaged in the following sectors:
| Business Activities | Total Investment Value |
| large-scale trading | more than IDR10,000,000,000, excluding land and buildings, for each 2-initial digits of the KBLI |
| food and beverage services(as long as it is open for foreign investment) | more than IDR10,000,000,000 (ten billion Rupiah), excluding land and buildings, within one regency/municipality |
| construction(as long as it is open for foreign investment) | more than IDR10,000,000,000.00 (ten billion Rupiah), excludingland and buildings, for each construction activity |
The above investment and capital values do not apply to PMA Businesses that obtained a valid Investment License before GR 24/2018 came into effect as long as their business activities have not changed.
Please read the complete advisory for further discussion on the key provisions.
Footnotes: M&T Advisory is an email publication prepared by the Indonesian law firm, Makarim & Taira S. It is only intended to inform generally on the topics covered and should not be treated as a legal advice or relied upon when making investment or business decisions. Should you have any questions on any matter contained in M&T Advisory, or other comments generally, please contact your usual M&T contact or [email protected]. Contacts: Yohanes Masengi: [email protected] |
