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Business Licensing Application through Online Single Submission in Indonesia

By January 9, 2019 No Comments

Online Single Submission

Key Term

The followings are the several key terms used in this article:

Online Single Submission (“OSS”) means a business licensing for Business Actor being operated by OSS Institution through the utilization of an integrated electronic system and on behalf of the minister, head of government agency, governor, or regent/mayor.

Business lincense being issued through OSS consists of the Business License and Commercial or Operational License.

Business License means a license being issued by OSS Institution on behalf of the minister, head of government agency, governor, or regent/mayor to the registered Business Actor for starting the business and before the commencement of business operation in accordance with the requirements and commitment available.

Commercial or Operational License means a license being issued by OSS Institution on behalf of the minister, head of government agency, governor, or regent/mayor to the Business Actor that has already obtained its Business License and for commencing business operation in accordance with the requirements and commitment available.

Commitment means a statement by Business Actor to fulfill the requirements available for the validation of the issued Business License and/or Commercial License in a given period of time.

Procedures

  1. Business Actor must first register itself and its business through OSS at oss.go.id. OSS Institution will then issue a Business Registration Number (“NIB”) to the registered Business Actor. NIB is the Business Actor’s identity that is required for obtaining and fulfilling the commitment for the validation of the issued Business License and/or Commercial License.
  2. NIB will also serve as a TDP (Certificate of Company Registration), Importer Identification Number (“API”), and Customs Access Rights.
  3. Business License must be issued through OSS with commitment that needs to be fulfilled for the sake of its effectiveness. The aforesaid commitment is subject to the infrastructures required for the business operation.
    • In case the Business Actor does not require any infrastructures to operate its business, the Business License will be issued with commitment.
    • In case the Business Actor requires an infrastructure and already obtained it, the Business License will be issued with commitment.
    • In case the Business Actor requires an infrastructure but is yet to obtain it, the Business License will be issued following the issuance of Location Permit, Location Permit for Waterground, Environmental Permit, and Building Construction Permit (“IMB”), each one of them
      with commitment to be fulfilled. The fulfillment of commitment of the aforementioned permits is basically the fulfillment of commitment of the Business License itself.
  4. The issued Business License and/or Commercial License wiil only be declared effective after all of its available commitments being fulfilled and the licensing fees being paid off.
  5. The issued Business License and/or Commercial License will be declared null and void in case the fulfillment of its commitment is yet to be done in the provided time period.

Dispute Resolution in the Licensing Process

  1. Minister, head of government agency, governor, and regent/mayor is obliged to settle any disputes arising out of the utilization of OSS within its licensing sector. In case there is a report from the public to the minister, head of government agency, governor, or regent/mayor as the institution that operates a licensing process through OSS or a report to the District Attorney or Police regarding any fraud or an abuse of authority in the utilization of OSS, the dispute must be settled by prioritizing an administerial procedures in accordance with administration law. Governor and regent/mayor that has failed to provide Business Licensing Services and/or Commercial Licensing Services to the Business Actor that has fulfilled its requirements in accordance with OSS regulation, is subject to sanctions in the form of written warning.
  2. In case that even after being imposed with 2 (two) consecutive written warnings, the governor and regent/mayor still has failed to provide Business Licensing Services and/or Commercial Licensing Services in accordance with OSS regulation, then :
    • Minister of Internal Affair must takeover the governor’s authority in the operation of it’s Business Licensing Services and/or Commercial Licensing Services and the minister must then delegate the licensing issuance to OSS; or
    • Governor must takeover the mayor’s/regent’s authority in the operation of it’s Business Licensing Services and/or Commercial Licensing Services and the governor must then delegate the licensing issuance to OSS.

Transitional Provisions

  1. Licensing service that has been submitted but are still yet to be issued even after the introduction of OSS, will be processed through OSS.
  2. Business License and/or Commercial License that has been obtained and is still valid for its sector, must be declared valid and must be registered with OSS.
  3. The submission and issuance of business licensing for business expansion must be conducted through OSS by providing data, commitment, and/or fulfilling commitment.

Licensing in Property Sector through OSS

Business licensing in property sector that is being processed through OSS consists of:

  1. Business License
    • Building Construction Permit (“IMB”);
    • Groundwater Extraction Permit;
    • Flood Control Permit;
  2. Commercial License
    • Condominium Function Planning and Utilization Permit;
    • Permit to Revise the Condominium Function Planning and Utilization;
    • Certificate of Feasible Function (“SLF”);
    • Title of Division Legalization;
    • Certificate of Right of Ownership over Condominium Unit (“HMRS”) under the name of the Developer;

Location Permit

Object and Subject

  1. The object of Location Permit must be a land which according to the Regional Spatial Plan (“RTRW”) is intended to be used in accordance with the business plan prepared by Business Actor.
  2. The limitation of control over land that is subject to a Location Permit for Business Actor or other Business Actor which constitutes a holding company with the previous Business Actor, must not exceed: For housing and settlement development business, it is 400 hectares in 1 province and 4000 hectares throughout Indonesia.
    • For hotel resort area, it must not exceed 200 hectares in 1 province and 4000 hectares throughout Indonesia.
    • For industrial area/special economic zone, free trade zone, free port area and/or other zone which has been designated as a national strategic project, it must not exceed 400 hectares in 1 province and 4000 hectares throughout Indonesia.
    • For plantation business being cultivated in a form of a large sugarcane plantation with a Cultivation Rights (“HGU”), it must not exceed 60.000 hectares in 1 province and 150.000 hectares throughout Indonesia.
      Whereas for other food commodities, it must not exceed 20.000 hectares in 1 province and 100.000 hectares throughout Indonesia.
      For fish embankment business in Java, it must not exceed 100 hectares in 1 province and 1000 hectares throughout Indonesia. Whereas in a territory outside Java, it must not exceed 200 hectares in 1 province and 2000 hectares throughout Indonesia.
      The limitation of possession over land in Papua or West Papua Province are two times the limitiation of possession over land in other single province.In determining the total area to be designated in a Location Permit, Business Actor must submit a written statement regarding the location and area of land that has been possessed by Business Actor or any other Business Actor which constitutes a holding company with the previous Business Actor.

      The limitation of possession over land that is subject to a Location Permit as aforementioned above does not apply to Regional State Owned Enterprise (“BUMD”), State Owned Enterprise (“BUMN”) in a form of Public Company (“Perum”), a Business Entity whose its entire or majority shares are state’s owned, and a Limited Liability Company (“PT”) whose its shares are owned by the public.

  3. The subject of Location Permit is an individual Business Actor and non-individual Business Actor. Individual Business Actor must be an Indonesian citizen who is subject to law, whereas for non-individual Business Actor, it must be in a form of PT, Perum, Regional Perum, other state owned legal entity, public service agency, broadcasting agency, business entity established by a foundation, and cooperation.

Location Permit Issuance Procedures

  1. General
    Location Permit with commitment to be fulfilled is issued to Business Actor through OSS. Location Permit can also be issued without commitment in case :

    • The land to be used for the business is located in an area designated to be used for the business itself in accordance with Detailed Spatial Planning (“RDTR”) and/or general urban spatial planning;
    • The land to be used for the business is located in a special economic zone, industrial area, free trade zone, or free port zone;
    • The land to be used for the business was provided to Business Actor by the previous owner which had already obtained a Location Permit for the land;
    • The land to be used for the business was provided by an authority or a development organizing body of an area in accordance with the spatial planning of the development area;
    • The land to be used for the business is required for business expansion and located next to the current location of the business;
    • The land to be used for the business as stated on the Location Permit planning must not exceed :
      • 25 hectares for agricultural business;
      • 5 hectares for low income housing;
      • 1 hectare for non-agricultural business.
    • The land will be used for national strategic project.
  2. Procedures for petition and its requirements
    1. Business Actor submits the petition for registration of Location Permit through OSS electronically.
    2. The requirements for the petition for Location Permit are:
      • NIB;
      • Statement regarding the readiness to fulfill the Location Permit commitment.
      • Statement regarding the fulfillment of requirements for the issuance of Location Permit without commitment;
      • Petition for the fulfillment of Location Permit commitment;
      • Mapping/Sketching containing the coordinate of the location to be granted with Location Permit;
      • Business planning;
      • Legal proof of payment for licensing services;
      • Letter containing statement regarding the total amount of land that have been obtained by the Businesss Actor or other Business Actor constituting a holding company with the aforementioned Business Actor.
  3. Location Permit Issuance
    • Location Permit is electronically issued through OSS in a form of decision to grant Location Permit.
    • In case the Location Permit is issued with commitment, Business Actor will only be allowed to conduct land acquisition after the issued Location Permit is declared effective for the area as mentioned on the land technical consideration mapping.
    • In case the Location Permit is issued without commitment, the issued Location Permit will be declared

Environmental Permit

  1. General
    • OSS Institution issues an Environmental Permit with commitments, where such commitments can be in a form of an Analysis of Environmental Impacts (“Amdal”) completion for businesses that require Amdal or an Environmental Management and Supervisory Effort (“UKL-UPL”) completion for businesses that require UKL-UPL. Lastly, Business Actor must also fulfill the Environmental Permit commitment by not conducting any activities as long as the Amdal or UKL-UPL completion progress is still on going.
    • Environmental Permit is not required if :
      • The business is located in a special economic zone, industrial area, or free trade zone dan free port zone.
      • Micro and small business, business that does not require an Amdal completion or business that does not require an UKL-UPL completion.
  2. Environmental Permit with an Amdal as a form of Commitment to be fulfilled
    1. The procedures for completing Amdal consist of :
      • Announcement of business plan and public consultation;
      • The filling and submission of reference framework form;
      • Inspection and approval of reference frame form;
      • The production and submission of Andal and RKL-RPL;
      • The assessment of the submitted Andal and RKL-RPL and the issuance of environmental worthiness decision, or the issuance of environmental unworthiness decision.
        Time period for the announcement of business plan, public consultancy, filling of reference frame form, and examination of reference frame form must be conducted in no later than 30 business days after OSS has issued the Environmental Permit with commitment.Time period for the assessment of the submitted Andal-RKL-RPL, transfer of assessment result recommendation, and the issuance of environmental worthiness decision or the issuance of environmental unworthiness decision must be conducted no later than 60 business days after the Andal and RKL-RPL documents were received by Amdal Assessment Commission (“KPA”) and were declared to be administratively complete.

        In case Business Actor has failed to fulfill its commitment to complete an Amdal, Minister of Environment and Forestry (“Minister”) / Governor / Regent/Mayor will notify OSS regarding the failure to complete Amdal and the issued Environmental Permit will be declared null and void.

        Amdal is now integrated with another type of environmental protection and management permits, such as hazardous and toxic waste management (“B3”) permit, permit on waste disposal to the sea, permit on waste disposal to the water sources, permit on the utilization of waste to the ground, air pollution control, and traffic impact analysis (“Andalalin”).

    2. The announcement of business plan and public consultation must be conducted through :
      • The announcement of business plan must be submitted through OSS, mass media, or announcement on business location.
      • Public consultancy can be held both before and after the issuance of Environmental Permit, thus in case it is held after the issuance of Environmental Permit, it can be held before the announcement of the business plan, at the same time as the announcement of the business plan, or even after the announcement of the business plan.
      • Other than inviting the community member to attend the public consultation, Business Actor must also cooperate with relevant agencies and public figures to be involved in the public consultation.
      • Business Actor must record and prepare the opinions, feedbacks, and suggestions provided by the community to be used as a basic in filling the reference frame form.
      • Business Actor must announce the business plan and conduct the public consultation in no later than 20 business days after the issuance of Environmental Permit.
    3. The filling, submission, examination, and approval of the reference framework form.
      • Business Actor fills and submits the written and electronic reference frame form to Central KPA / Provincial KPA / District/City KPA no later than 20 business days after the issuance of Environmental Permit.
      • Examination and approval of the form must be provided no later than 10 business days after the form was received from Business Actor.
    4. Business Actor produces and submits the Andal and RKL-RPL to the Central KPA / Provincial KPA / District/City KPA based on the approved reference framework form.
      Time period for the production and submission of Andal and RKL-RPL is determined based on the commitment of the Business Actor as also stated on the approved reference framework form, with the maximum period that is allowed to be approved for is not exceeding 180 business days after the form approval was granted.
    5. Assessment of Andal and RKL-RPL as well as the issuance of environmental worthiness decision or the issuance of environmental unworthiness decision is conducted both administratively and technically.
      Andal and RKL-RPL that need to be revised will be returned to the Business Actor.Time period for the Andal and RKL-RPL assessment, including for the Andal and RKL-RPL revision and re-submission, is 50 business days after Andal and RKL-RPL documents were declared administratively complete.
    6. Time period for the transfer of Andal and RKL-RPL assessment result recommendation containing environmental worthiness recommendation or environmental unworthiness recommendation to the Minister / Governor / Regent/Mayor are 5 business days after the assessment being completed.
    7. Minister / Governor / Regent/Mayor must issue the environmental worthiness decision or environmental unworthiness decision based on the Andal and RKL-RPL assessment result recommendation in no later than 5 business days after the recommendation being received from KPA.
  1. Environmental Permit with an UKL-UPL as a form of Commitment to be fulfilled
    1. The procedures for completing UKL-UPL consist of :
      • The filling and submission of UKL-UPL form to the Minister / Governor / Regent/Mayor through OSS;
      • UKL-UPL examination as well as the approval of UKL-UPL recommendation through OSS.
        Time period for the filling and submission of UKL-UPL is in no later than 10 business days after the issuance of Environmental Permit.In case Business Actor has failed to submit the UKL-UPL in the available time period, the issued Environmental Permit will be declared null and void.

        UKL-UPL is now integrated with another type of environmental protection and management permits, such as B3 permit, permit on waste disposal to the sea, permit on waste disposal to the water sources, permit on the utilization of waste to the ground, air pollution control, and traffic impact analysis Andalalin.

    2. UKL-UPL examination and the approval of UKL-UPL recommendation.
      UKL-UPL examination is conducted both administratively and technically in no later than 5 business days after UKL-UPL being received from Business Actor.In case based on the examination result the UKL-UPL is declared incomplete and needs to be revised, Minister / Governor / Regent/Mayor will return the UKL-UPL to the Business Actor through OSS to be revised and re-submitted no later than 5 business days after the UKL-UPL being returned by the Minister / Governor / Regent/Mayor.

      In case based on the examination result the UKL-UPL is declared complete, Minister / Governor / Regent/Mayor must approve the UKL-UPL recommendation and the Environmental Permit will be declared effective through OSS.

      In case Minister / Governor / Regent/Mayor has failed to provide its approval of the UKL-UPL recommendation in the available time period, the UKL-UPL recommendation and Environmental Permit commitment will be considered to has been completed and approved.

Environmental Permit Amendment

  1. Business Actor must submit the petition for amendment of Environmental Permit through OSS if there is a plan to make some alterations on the business which already has an Environmental Permit.The criteria of alterations in business consists of :
    1. Alterations in business ownership;
    2. Alterations in environmental management and supervisory;
    3. Alterations that affect the environment such as :
      • Alterations in the equipment being used for production purposes that affect the environment;
      • Alterations in the supervisory of production capacity;
      • Alterations in technical specification that affect the environment;
      • Alterations in business tools;
      • Expansion of land and building being used for the business;
      • Alterations in time period or duration of the business;
      • Business located in an area which is yet to be included in the Environmental Permit;
      • Alterations in government policy in an effort to tighten the environmental protection and management;
      • Alterations in the environment which is fundamental as a result of natural disaster or other causes, before and during the business operation.
    4. Alterations in the impacts and/or risks to the environment based on an obligatory environmental risk analytical study and/or obligatory environmental audit.
    5. The business plan is yet to be implemented in 3 years since the Environmental Permit was issued.
    6. Alterations in business which does not affect the environment such as :
      • Alterations in business as caused by corporate splitsing and/or merger, whether partially or wholly;
      • Alterations in the name of the person in charge of the business operation;
      • Alterations in the name of the business without changing the line of the business;
      • Decrease in business operation and/or decrease in the total amount of area being used for the business.
  2. Business Actor that will amend its Environmental Permit must first submit a petition for guidance for Environmental Permit amendment to the Minister / Governor / Regent/ Mayor through OSS. The guidance will then be used as a basis for the submission of petition for Environmental Permit amendment.
    Minister / Governor / Regent/Mayor will evaluate the petition and provide guidance for the Environmental Permit amendment through OSS, by considering whether the alterations in business will or will not have any impacts on the environment.
  3. If based on the guidance, the alterations in business are declared to be having an impact on the environment; the Environmental Permit must be amended by submitting a petition for Environmental Permit amendment in order to amend the environmental worthiness decision or UKL-UPL recommendation through OSS. The amendment of environmental worthiness decision must be conducted through :
    • The submission and assessment of a new Amdal for business alteration plan that requires an Amdal to be completed; or
    • The submission and assessment of an Andal and RKL-RPL addendum for business alteration plan that requires an Amdal to be completed.
  4. Building Construction Permit (“IMB”)
    1. IMB is issued through OSS with commitment.
      The fulfillment of commitment must be conducted by supplementing:

      • Proof of ownership of rights over land or proof of agreement on the usage of the land;
      • Building owner’s data;
      • Building technical plan which has obtained a technical consideration provided by a Building Expert Team (“TABG”).
        The Urban Planning Information (“KRK”) is electronically provided through OSS.Time period for the fulfillment of IMB commitment is no later than 30 business days after the issuance of IMB, or if the issuance of IMB requires an Amdal to be completed then the time period would be 30 business days after the Amdal was completed.

        If the technical consideration shows that the technical plan has not fulfilled the requirements available, Pemda will provide OSS with a statement that the IMB must be declared null and void.

        If the technical consideration shows that the technical plan has fulfilled the requirements, Pemda will provide OSS with a statement that the IMB must be declared effective.

    2. IMB is not required if:
      • The building is located in a special economic zone, industrial area, or free trade zone and free port zone, as long as the area manager has set an estate regulation for the area.
      • It is a a project owned by the government or is a national strategic project, as long as the business entity winning the auction or another business entity that will run the project has been determined.
  1. Certificate of Feasible Function
    1. Business Actor submits the petition for the issuance of SLF to Pemda through OSS with requirements to be fulfilled such as :
      • As-built drawings;
      • Statement from the Supervisor or Construction Management for newly-built building or Technical Reviewer for existing building, that the building has been built according to the IMB and it is feasible functionally;
      • Supporting attachments regarding its feasibility function.
        If based on the result of feasibility function examination the building is declared functionally not-feasible, then the petition for examination of feasibility function will be returned to Business Actor, thus retrofitting must be conducted by the Business Actor before the next submission of the petition.
    2. If the requirements for the issuance of SLF have been declared to be complete, Pemda must notify OSS for the SLF to be issued.
      OSS must issue the SLF no later than 3 business days after the notification was received by Pemda.If the requirements for the issuance of SLF has been declared to be incomplete, Pemda must notify OSS that the SLF cannot be issued.

Jourdan Phillip Daniel
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