Luring Investors by Shunning Additional Licenses

Amid a tight competition with neighboring Asian countries, the Indonesian government has adopted a national policy seen to attract more investors, particularly those who find long government checklists of requirements time-consuming.

Aptly referred to as bureaucratic layers, the Indonesian government is on a sustained effort to ease the tedious process of securing business permits, clearances and additional licenses for each and every entrepreneurial venture.

In other countries, business ventures outside of what has been stipulated in their original application of permits are required to have additional licenses. Meanwhile, Indonesia waived the need for such covering a long list of entrepreneurial ventures.

As such, entrepreneurs—both local and foreign—have every reason to get their business rolling. This is in view of Indonesia’s economic policy encouraging investments into the country.

Part of Indonesia’s bid to become a business-friendly country is the imposition of a simplified business license application process with the Online Single Submission (OSS) system.

Aside from the significantly streamlined checklist, the Indonesian government also added 45 business fields where an entrepreneur can actually start operations immediately after securing a Business Identification Number.

Fast, Convenient Business Licensing Process

OSS refers to a web-based app designed to process online business permit applications in Indonesia. What makes the app favorable to entrepreneurs is that the tedious process which usually takes weeks could be all wrapped up in just two hours.

The integrated, web-based application also trims down the cost of an over-the-counter business permit application. This makes OSS a proto-type app among Asian countries.

Since the application is web-based, entrepreneurs can actually be spared from having to travel to various government agencies in securing business permits and licenses. This effectively saves time and resources.

With a business permit and licensing service app in place, entrepreneurs can already comply with business licenses for any business activities by both local and foreign-owned businesses.

Given its advantages, OSS—which has been in effect since July 2018—has become Indonesia-based companies’ most preferred method of securing business permits and licenses for companies operating in the archipelago.

Added Economic Perks

After completing the online business registration via the OSS, the local economic policy automatically assigns a business identification number a day after the registration. However, if the entrepreneur fails to provide all required documents a delay may occur.

For business ventures that the government deemed as “economic essential,” Indonesia offers an added leniency. This would see the release of the business license simultaneous with the assignment of business identification number.

The economic perk basically waives the need for the investor to secure additional licenses. In effect, this allows them to immediately start the business.

No More Additional License Required

Among the economic essentials in Indonesia are those which have something to do with food, medicine, transportation, information technology, culture and the arts, logistics and finances.

These businesses (or related businesses) no longer require additional licenses.

cargo & logistics (loading & discharging)
eatery
drink stall (coffee shop, juice counter)
traditional/ herbal medicine
technical installation
photography
security system
education/ training
water-related businesses
water management system
food huckster
food merchant
drinks huckster
recording studio
music publisher
travel agency
support service provider
cleaning service
office administration support services
call center
event organizer
debt collection
other supporting activities undefined in other categories
entertainer (i.e. photographer, make-up artist)
cultural park management
others cultural tourism activities
gambling (online and offline)
funeral
other amusement and recreation activities
others supporting electrical system
headquarters/office management
transportation consultancy
public relations
advertising
interpreter/translation
business consultancy and brokerage
lease for sport equipment & outdoor activities without option rights
party equipment without option rights lease
household equipment without option rights lease
publishing goods without option rights lease
flower and plants without option rights lease
music instrument without option rights lease
household equipment without option rights lease
water transportation vehicle without option rights lease
non-financial assets without option rights lease

While Indonesia may have imposed an economic policy seen to make life easier for entrepreneurs, it is still best to consider consulting business advisors with a solid track record of excellence in securing business license application in Indonesia.

We are 3E Accounting would be happy to help you form a business.