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Scope of Investment Service

Scope of Investment Service

The Regulation of BKPM 12/2009 is intended as a guide for PTSP organizers in the field of investment, the investors, and the public in understanding the procedures for filing and completing the application process of investment licensing.

In general, the types of investment services as regulated in BKPM 12/2009 regulations are divided into two types, namely: (i) licensing services; and (ii) non-licensing services. “Licensing” shall be defined as any form of approval to make investments issued by the government and local governments which have authority in accordance with the provisions of legislation. While “non-licensing” is defined as any form of ease of service, fiscal facilities, and information on investment, in accordance with the provisions of legislation.

The types of investment licensing under Article 13 paragraph (2) of BKPM Regulation 12/2009 consist of among others:

  1. Investment Registration: also known a registration in a form of preliminary government approval as the basis for starting an investment plan.
  2. Investment Principle Permit: also called a principle permit, is a permit of principle, is a license to start investment activities in a business field that can obtain fiscal facilities and in the implementation of capital investment requires fiscal facilities.
  3. Principle Permit of Capital Investment Expansion: also called an expansion principle license, is a license to initiate an expansion plan of investment in a business that can obtain fiscal facilities and in the implementation of its investment requires a fiscal facility.
  4. Principle Permit of Investment Changes: also called the change principle permit, is a license to make changes to the provisions stipulated in the principle license/license of the previous expansion principle.
  5. Business License: a mandatory permit for a company to carry out production/commercial operations in the production of goods or services as the implementation of the license/principle approval of its investment, unless otherwise provided for by law.
  6. Expansion Business License: License required by a company to carry out production/commercial operations on the addition of production capacity exceeds the production capacity that has been permitted, as the implementation of the principle permit expansion/approval owned by the company, unless otherwise specified by sectoral law and regulation.
  7. Business License of Investment Company Merger (merger): a license must be owned by a company continuing business (surviving company) after the merger, to carry out commercial production activities/commercial operations of the merger company.
  8. Amended Business License: licenses that must be owned by the company to make changes to the provisions that have been specified in the business license/expansion business license previously as a result of changes that occurred in the implementation of investment activities.
  9. Location Permit: a permit granted to a company to acquire the necessary land in respect of an investment as well as a permit for the transfer of rights, and to use the land for the purpose of investing its business.
  10. Spatial Use Approval.
  11. Building Construction Permit (IMB).
  12. Nuisance Permit (UUG/HO).
  13. Underground Water Extraction Permit.
  14. Company Registration Certificate (TDP): a certificate of validation given by the company registration office to a company that has registered the company as regulated in Law No.3 of 1982 concerning Company Registration.
  15. Right on Land.
  16. Other permits for capital investment.
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While other types of non-licensing services and other facilities under Article 13 paragraph (3) of BKPM Regulation 12/2009 among others comprise:

  1. Import duties facility on machine import.
  2. Import duty facility on import of goods and materials.
  3. Proposed to obtain facility of Corporate Income Tax (PPh).
  4. Manufacturers Importer Identity Number (API-P).
  5. Foreign Employment Usage Plans (RPTKA).
  6. Recommended Visa for Work (TA.01).
  7. Permission to Employ Foreign Workers (IMTA).
  8. Regional Incentives.
  9. Information services and complaint services.

Types of licensing and non-licensing handled by BKPM as PTSP based on BKPM Regulation as PTSP Based on BKPM Regulation 12/2009 include:

  1. Investment Registration.
  2. Principle Permit of Investment.
  3. Principle Permit of Investment Expansion.
  4. Principle Permit of Investment Changes.
  5. Business License, Expansion Business License, Business License of Merger, and Change of Business License.
  6. Import duties facility on machine import.
  7. Import duty facility on import of goods and materials.
  8. Proposed to obtain facility of income tax (PPh) of body.
  9. Producer Importer Identity Number (API-P)
  10. Foreign Workers Usage Plan (RPTKA).
  11. Recommendation of work visa (TA.01)
  12. Permission to hire foreign workers (IMTA)

While the licensing and non-licensing mentioned below handling is done by following the provisions issued by the related technical institution/head of LPND, the governor and regent/mayor in the area concerned:

  1. Location Permit.
  2. Approval of Spatial Use.
  3. Building Construction Permit (IMB).
  4. Nuisance Permit (UUG / HO).
  5. Permit to Extract Underground Water.
  6. Company Registration (TDP).
  7. Rights on Land.
  8. Other permits in the framework of the implementation of investment.
  9. Regional Incentives.
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Based on the description above, in addition to licensing and non-licensing that can be maintained through PTSP BKPM, there are still some licensing and non-licensing that must be handled at the related institution/head of LPND, governor and regent/mayor in the relevant area. Thus the PTSP in BKPM is basically unable to unify all the licensing and non-licensing arrangements required in an investment.

Another thing that also needs to be considered in the process of issuing permits in BKPM is still followed by a two-stage licensing process, which prior to the issuance of permanent licenses, then BKPM will issue in advance what is called the principle permit. The fixed business license is basically given there when the commercial operations/production activities of a project have been carried out.

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