Investors will find it easier when investing in Indonesia. Since the creation of the Job Creation Law on November 2, 2020, the government has reformed the licensing process to the Risk-Based Licensing Approach through a single platform, Online Single Submission (OSS). By referring to Government Regulation Number 5 of 2021 concerning the Implementation of Risk-Based Business Licensing, this electronic system aims to simplify and speed up the licensing process.
The OSS-RBA, or Online Single Submission Risk-Based Approach, replaces the previous version, OSS 1.1. In OSS-RBA, the business permit will be made through a risk approach. The businesses only need to take care of licensing according to the level of business risk. For example, a low-risk business only requires a Business Identification Number (NIB). Meanwhile, high-risk businesses require NIB and permits.
Business licensing flow
How is the flow of business licensing issuance through OSS-RBA in general? First, the businesses apply through the OSS-RBA website to gain access by creating username and password. The Indonesian citizens’ businesses only need a Single Identity Number (NIK), while foreigners need a passport number; both need an active email to make a new account on OSS-RBA. The next step is to input the business field and investment value. Once all the data is complete, the system will issue the NIB. The notification will go to each official office as the issuer of business licensing. Should there be any verification required, the relevant authorized institution will verify the compliance.
The OSS-RBA system then will verify whether the applications are approved, incomplete, or rejected. The system also will submit a request to complete the deficiency if the results are preliminary.
Low-risk and medium-low-risk businesses can complete their business license in OSS RBA. The law regulates that businesses that do not significantly affect the environment, natural resources, or are practically easy to perform, can begin their operations immediately after getting a NIB. Meanwhile, medium-high risk and high-risk businesses must have a NIB, and the ministry/institution/region will verify the requirements/standards and carry out supervision of the company.
OSS-RBA is a one-stop system. Therefore the businesses do not need to visit many places to take care of the license. The OSS-RBA system has been integrated with the Ministry of Home Affairs (Dukcapil), Ministry of Finance (Tax Service Office), Ministry of Law and Human Rights (company information), and Ministry of Agrarian and Spatial Planning (detailed spatial plan) for company establishment. OSS is also integrated with the Technical Ministry and Regional One-Stop Integrated Service (PTSP) regarding business permits, location permits, and environmental permits. Meanwhile, the OSS registration process and business development are under the Ministry of Investment/Indonesia Investment Coordinating Board (BKPM).
The Ministry of Investment/Indonesia Investment Coordinating Board (BKPM) will give fiscal and non-fiscal incentives for investors who invest in the Priority Business Sector. Fiscal incentives consist of tax allowances, tax holidays, or investment allowances. In addition, investors will get customs incentives in exemption from import duties on imports of machinery and goods and materials for industrial construction or development.
Meanwhile, non-fiscal incentives include ease of business licensing, provision of supporting infrastructure, a guarantee of energy availability, guarantee of the availability of raw materials, immigration, employment, and other facilities under the conditions of applicable laws and regulations. In addition, the allocated business fields or partnerships with cooperatives and MSMEs are also determined.