Investment Procedures

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Pursuant to Article 25 (4) of Law Number 25 in 2007 on Investment, it is stipulated that any investment companies that will carry on business activities in Indonesian Republic teritory is obliged to obtain license in accordance with provisions law and regulations from the authorized agency unless otherwise specified in the law. Investment license as described, may be obtained through One Stop Service (PTSP) for Indonesia Investment Coordinating Board (BKPM)/ Provincial Investment Agency (PDPPM)/ the Agency Organizing One Stop Service in the Province/ the Regency/ Municipality Investment Agency (PDKPM)/ the Agency Organizing One Stop Service in the Regency/ Municipality.

Procedures for obtaining investment licensing and non-licensing in Indonesia, one of them is regulated in Regulation of Chairman of BKPM Number 5 in 2013 on Licensing and Non-Licensing Investment Procedures, that has been amanded by Regulation of Chairman of BKPM Number 12 of 3013 on Amandements to Regulation of Chairman of BKPM Number 5 in 2013 on Investment Licensing and Non-Licensing Procedures.

Such regulation is intended as guidelines for implementation of Investment Services related to procedures for submission and requirements of investment licensing and non-licensing application which are addressed to the officials at the agency Organizing One Stop Service in Investment field and business actors and other community.

In addition to matters above, such regulation also aim at:

  1. Realizing equality and uniformity of procedures and requirements for Investment Licensing and Non-Licensing Procedures at the agency organizing One Stop Service in investment field all over the country/ Indonesia.
  2. Providing information of certainty period for completion of Investment Licensing and Non-Licensing application.
  3. Achieving easy, quick, accurate, transparent and accountable services.

As for Procedures of Submission and Requirements for Investment Licensing and Non-Licensing Application which are regulated in such regulation are as follows:

Principle License of Investment

A. Application for Principle License of Domestic Investment (PMDN)

a. For establishment of a new business the Application may be submitted by:

  1. Limited Liability Company (PT) whose capital shares owned by Indonesian citizen;
  2. Commanditaire Venootschap (CV), or Fim (Fa), or private business;
  3. Cooperative or Foundation established by Indonesian citizen;
  4. State-Owned Enterprises (BUMN) or Regional Government-Owned Enterprises (BUMD)

b. Joint Venture Company (PMV) may become a shareholder of the Investment Company on condition that in accordance with provisions of laws and regulations.

c. Equity participation (penyertaan modal) by Joint Venture Company the shares of it owned by Domestic Investor or any element of foreign capital, is required as national equity participation.

d. Equity participation of Joint Venture Company is temporary and may not exceed period of 10 (ten) years and mey be extended a maximum of 5 (five) years.

e. Application is submitted to One Stop Service for Indonesian Investment Coordinating Board (PTSP BKPM), One Stop Service in the Province or One Stop Service in the Regency/ Municipality in accordance with its authority, using an application form as specified in attachment I-A, Regulation of Chairman of Indonesia Investment Coordinating Board (BKPM) No. 5 in 2013 in conjunction with No. 12 in 2013.

f. In the process of issuance of Principle License for Investment in Trade business field and/ or certain business field,w hen necessary the Applicant/ Company must give a presentation before the officials of One Stop Service in accordance with its authority.

g. Application for Principle License as intended is completed with the following requirements:

  1. Copy of Deed of Establishment and its amendments and legalization from the Minister of Law and Human Rights, if any, and the Company’s Taxpayer Registration Number (NPWP).
  2. Copy of Articles of Incorporation for business entity of cooperative, foundation, completed with legalization from the authorized agency.
  3. Statement of activity plan, for industry in the form of flowchart of production (diagram alir produksi), completed with detailed explanation on production process description by specifying type of raw material, while for service sector is the form of description of activitied to be carried out and explaination of the service produced.
  4. Recommendation from the Minister/ Guidance Board (Lembaga Pembina) when required in according to business field.
  5. Application is signed over a sufficient stamp duty by the Board of Directors/ management of the Company and seal.
  6. If the application is not submitted directly by the Applicant, it must be attached with the power of attorney as regulated
    Principle License for Investment submitted, if it has been approved by One Stop Service pursuant to its authority, will be issued by no later tahn 3 (three) working days from the receipt of complete and correct application.

B.Application for Principle License of Foreign Investment

Foreign investment is an investment by building, buying or acquisition of the company. Foreign investment is investment activity in Indonesian teritory either full foreign investment or as a partnership with the local investment. (Article 1 law No 25 in 2007).
Application may be submitted before or after the company has obtained Indonesian legal entity in the form of Limited Liability Company (PT) that has been legalized by the minister of Law and Human Rights. For application for Principle License submitted by the legal business entity from June 1, 2014 must be conducted online through online-spipise.bkpm.go.id

In case of the Application, before having a status of Indonesian legal entity, it can be submitted by:

  1. Other national government, and/ or foreign citizen and/ or foreign business and/ or foreign capital investment
  2. Other national government and/ or foreign citizen and/ or foreign business entity and/ or Foreign Investment Company together with Indonesian citizen and/ or Indonesian legal entity.
  3. Principle License for an application as letters a and b above is obliged to be followed up by drawing up Deed of Establishment of Limited Liability Company and legalized by the minister of Law and Human Rights.

Application for Principle License of Foreign Investment after the company obtained a status of Indonesian Legal Entity in the form of Limited Liability Company is submitted by the Board of Directors/ Management of the company.

Principle License may not be issued if the application does not comply with:

  1. Provisions on business fields closed and business fields open with conditions
  2. Sectoral provisions related to business fields and/ or
  3. Provisions of application requirements.

Application for Principle License for Foreign Investment is submitted to One Stop Service for Indonesian Investment Coordinating Board (PTSP BKPM), One Stop Service for Free Trade Zone and Free Port Zone (PTSP KPBPB), One Stop Service for Special Economic Zone (PTSP KEK) in accordance with its authority, using an application form as specified in attachment I-A, Regulation of Chairman of Indonesia Investment Coordinating Board (BKPM) No. 5 in 2013 in conjunction with No. 12 in 2013, being completed with the following requirements:

a. For the applicant has not yet obtained in Indonesia legal entity and the application is:

Other national government, attaches a document (surat) from the government agency of the relevant country or document issued by the Embassy/ representative office of the relevant party in Indonesia.

Foreign individual, attaches a copy of valid passport specifying clearly the name and signature of the owner.

Foreign business entity attaches a copy of articles of association/ incorporation in English or its sworn translation in Indonesian Language specifying the formation of the latest Board of Directors.

For Indonesian individual attaches Resident’s ID Card and copy of Taxpayer Registration Number (NPWP) and for Indonesian legal entity attached Deed of Establishment of the Company and its Amendments completed with legalization/ notification from the Minister of Law and Human Rights and copy of Taxpayer Registration Number (NPWP)

b. For the applicant that has obtained Indonesian legal entity in the form of Limited Liability Company attaches:

Copy of the Company’s Deed of Establishment and its amendments completed with legalization/ notification from the Minister of Law and Human Rights as well as copy of the Company’s Taxpayer Registration Number.

Personal identity of shareholder, in the event of the shareholder is:

  1. Other national government attaches a documet from the government agency of the relevant country or a document issued by the Embassy/ representative office of the relevant country in Indonesia
  2. Foreign individual attaches a copy of valid passport specifying clearly the name and signature of the owner.
  3. Foreign business entity attaches a copy of articles of association/ incorporation in English or its sworn translation in Indonesian Language specifying the formation of the latest Board of Director.
  4. Indonesian individual attached a copy of valid Resident’s ID Card as well as a copy of Taxpayer Registration Number.

 

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