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Online Single Submission (OSS) System – New Regime of Business Licensing Process in Indonesia

KSP LEGAL UPDATES Online Single Submission (OSS) System – New Regime of Business Licensing Process in Indonesia ossOnline Single Submission (OSS) System – New Regime of Business Licensing Process in Indonesia
Overview

A big movement to simplify licensing process in Indonesia was made by the Government of Indonesia (“GOI”). The OSS System was launched in the mid of July under the Governmental Regulation Number 24 of 2018 on Online Integrated Business License (“GR 24/2018”).

The Online Single Submission (OSS) System significantly shifted the government’s responsibility to monitor compliance of companies to companies who are expected to be more proactive to fulfill all licensing requirements to conduct their business activities.

Registration

The OSS System applies to individual and non-individual businesses. It means that local companies (PT Lokal), foreign investment companies (PT PMA), foundation (yayasan), firm (firma or CV), etc. should be registered in the OSS System.

The registration in the OSS System is not immediately required for the existing licensed businesses. In case of licenses renewal or new application for business licenses, companies must be registered and then proceed the application through the OSS System. Meanwhile, new businesses is required to register with the OSS System.

New Business Licenses

Principally, there are 3 (three) licenses that should be obtained by Indonesia companies through the OSS System:

1. Business Identity Number (Nomor Induk Berusaha - NIB)

Upon registration in the OSS System, companies shall obtain a Business Identity Number (Nomor Induk Berusaha - NIB). The NIB shall now serve as the Company Registration Certificate (TDP), the Importer Identification Number (API) and the customs access right (Hak Akses Kepabeanan). It will be valid for as long as companies run their business.

2. Business License (Izin Usaha)

After obtaining the NIB, companies must apply for Business License (Izin Usaha). Business License shall be granted if companies have fulfilled their commitment listed in the OSS System such as Location Permit (Izin Lokasi), Aquatic Location Permit (Izin Lokasi Perairan), Environmental Licenses (Izin Lingkungan) and/or Building Construction Permit (IMB).

Business License shall apply in all regions of Indonesia. Once it is obtained, companies may conduct land procurement, expansion, building construction, hiring workers, commissioning and/or production. Similar with NIB, this license will be valid for as long as the business is in operation.

3. Commercial License (Izin Komersial)

Before selling products and/or services to the market, companies must obtain Commercial License (Izin Komersial). At this stage, companies must fulfill commitments to obtain standard, certification and/or licenses and/or registration of their products and/or services. Validity of this Commercial License is specifically stipulated in the laws and regulations governing such license.

The OSS System is a self-assessment concept where failing to fulfill the agreed commitments in the OSS System shall lead to suspension of business activities or revocation of business licenses. The relevant departments which have been linked through the OSS System shall monitor companies’ responsibility to their commitments.

Other Compliances

The OSS System is basically the platform for business licensing process, while reporting requirements, such as Investment Report (LKPM) and representative office reports, are still under supervision of the Investment Coordinating Board (BKPM). To avoid any sanctions of non-compliance, companies must keep themselves updated with new compliance/reporting requirements from the relevant departments.

KSP Law Office can assist clients to apply NIB, Business License and Commercial License through the OSS System, please call us at +6221 3972 2042 or drop us an email at mail@ksplaw.co.id.
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