Mechanism on the Application for Investment Licenses

Background

To create an order in the investment activity, the authorized body needs to set out a line of licensing process before an investor could conduct the investment activity in the territory of Indonesia. Investment Coordinating Board (Badan Koordinasi Penanaman Modal) (“BKPM’) introduced a system, namely Integrated One Door Service (Pelayanan Terpadu Satu Pintu) (“PTSP”) whereby investors can enjoy certain facilities. The implementation of PTSP shall comply with all the guidelines and procedures for investment application, as stipulated in the Regulation of Chairman of BKPM No. 12 tahun 2009 (“Perka BKPM 12/2009”) in order to create a uniformity in the licensing process of investment and to achieve the purposes of PTSP which are easy, fast, precise, and transparent for the investors.

 

PTSP

Article 1 paragraph 5 of Perka BKPM 12/2009 mentioned the definition of PTSP as an activity of organizing the licenses and non-licenses for investment, which obtain the delegation from the authorized body. The process of PTSP, started from the application to the document issuance will be done in one place.

The basic principles to be achieved by PTSP are as follow:

  1. Easy, a simple flow for the application that is easily understood by the investor;
  2. Fast, a short period of time needed for the settlement of the application process;
  3. Precise, the conformity of the product and the governing Law;
  4. Accurate, the facilities provided to the investors such as facility to import the machinery, goods and materials in accordance with the production requirements;
  5. Transparent and accountable, a clear and accountable flow for the application process.

The implementation of PTSP by BKPM is based on the authority delegation by the minister who has the authority for governmental affairs in the investment field. In this case, the implementation of PTSP by BKPM covers investment issues that can be divided into:

  1. Investment in which the scope covers cross border provinces;
  2. Investment related to un-renewable natural resources with a high level of environmental damage;
  3. Investment in the industrial field with a national scale priority;
  4. Investment related to the national defense and security;
  5. Foreign investment and investment using foreign capital, which covers:
    1. Foreign investment that is conducted by the government of other state;
    2. Foreign investment that is conducted by foreign citizen or foreign legal entity;
    3. Investment using foreign capital that comes from the government of other state.
    4. Other field of investment that become governmental affairs according to the Law.

In this regard, the Chairman of BKPM shall coordinate with the minister/head of relevant agencies to inventarize the agreement that is made by the Government and the government of other state in the field of investment.

 

Renintha Karina

 

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