BKPM Updates Investment License Regulations

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BKPM Updates Investment License Regulations

Business License

On 26 October 2015, Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal or “BKPM”) issued 4 (four) new regulations as part of the Indonesian Government’s Economic Stimulus package. The new regulations repealed Head of BKPM Regulation No. 5 of 2012 as amended by Head of BKPM Regulation No. 12 of 2012, and Head of BKPM Regulation No. 3 of 2013.

The new regulations intends to accommodate the online-based BKPM License Application System known as SPIPISE (Sistem Pelayanan Informasi dan Perizinan Investasi Secara Elektronik) and also to simplify the investment procedure in Indonesia, thereby attracting more investors. The regulations will apply to provincial and regional Investment Boards (Badan Penanaman Modal dan Pelayanan Satu Pintu Terpadu “BPMPSPT” Provinsi dan Kabupaten/Kotamadya) in Indonesia, although they will become effective at a later date.

A. Head of BKPM Regulation No. 14 of 2015 on Principle License

Head of BKPM Regulation No. 14 of 2015 establishes in writing the requirements and policies to acquire a Principle License as means for investors to incorporate and start investing in Indonesia. The regulation also introduces a bigger form of Principle License called Izin Investasi (literally meaning “Investment License”) that are meant for Companies established with investment of at least Rp 100.000.000.000,-

Key Updates include: Longer Term of Principle License between (1) and (5) years, Principle License for Merging Companies, Presentation Requirement at BKPM, Minimum Investment Amount, Explicit Ban of “Nominee” Arrangement, and Investment License.

B. Head of BKPM Regulation No. 15 of 2015 on Licensing and Non-Licensing Matters

Head of BKPM Regulation No. 15 of 2015 establishes in writing the requirements and policies to acquire business and operational licenses in order for Companies to start operating or manufacturing in Indonesia. It also regulates the establishment of Foreign Representative Offices and Branch Offices in Indonesia.

Key Updates include: Bigger Scope of License Approval by BKPM, Investment Realization Requirement, Bigger Scope of Representative Office licensed under BKPM.

C. Head of BKPM Regulation No. 16 of 2015 on Investment Facilities

Head of BKPM Regulation No. 16 of 2015 focuses on the granting of fiscal facilities applied through BKPM, mostly in the form of import duty exemptions or reductions.

Key Updates include: Shorter Application Process Time, Classification of Fiscal Facilities and Inclusion of Facilities provided for Sectors previously governed under separate regulation, such as construction, power plants and mining.

D. Head of BKPM Regulation No. 17 of 2015 on Capital Investment Implementation Control

Head of BKPM Regulation No. 17 of 2015 schedules the deadlines for periodical reports to BKPM and other relevant Investment Boards. Periodical reports are now required to be submitted online by investors. This is in line with BKPM’S efforts for the past few years to tighten the monitoring of investment licenses in Indonesia by reminding investors to submit their reports via email alerts.

Key Updates include: Changes in Periodical Report Deadline, Shorter Report Process Time, BKPM Site Visit without Prior Notice, and Removal of some Administrative Sanctions.

HOW CAN SMART LEGAL CONSULTING HELP YOU?

SMART Legal Consulting has extensive experience in assisting Investors to incorporate by establishing PMA Companies, and continue their compliance in Indonesia in regards to the investment requirements set by BKPM. If you need immediate assistance, please contact the SMART Help Desk at:

E:  info@smartcolaw.com

H: +62821-1234-1235

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