In April 2020, the Investment Coordinating Board (Badan Koordinasi Penanaman Modal – “BKPM”) issued BKPM Regulation No. 1 of 2020 on Guidelines on the Provision of Integrated Electronic Business Licensing Services (“BKPM Regulation 1/2020”). This regulation was issued as an implementing regulation of Government Regulation No. 24 of 2018 on Integrated Electronic Business Licensing Services (“Government Regulation 24/2018”) and President Instruction No. 7 of 2019 on Acceleration of the Ease of Doing Business.
Several key provisions set out in this regulation are as follows:
Investment Value and Capital Requirements
BKPM Regulation 1/2020 requires a foreign investment company (PT PMA) to comply with (A) the minimum investment value of more than IDR 10 billion (excluding land and buildings) for each line of business activity as categorized under the relevant 5-digit Standard Indonesian Business Classification (Klasifikasi Baku Lapangan Usaha Indonesia – “KBLI”) and for each location project, and (B) the minimum issued and paid-up capital amount of at least IDR 2.5 billion. However, note that: (i) for wholesale business activities, such minimum investment value applies for each line of busines activity as categorized under the relevant 2-initial digit KBLI only; (ii) for food and beverage services business activities, such minimum investment value applies for projects within one regency/municipality; and (iii) for construction business activities, such minimum investment value applies for each construction activity.
BKPM Regulation 1/2020 also provides that the investment value and capital requirements set out above do not apply to PT PMAs which had obtained valid Investment License prior to the enactment of Government Regulation 24/2018 as long as there is no change to their business activities.
Business Identification Numbers
BKPM Regulation 1/2020 requires business actors to have a Business Identification Number (Nomor Induk Berusaha – “NIB”). Business actors who already obtained a Business License and/or Commercial/Operational License prior to the enactment of Government Regulation 24/2018 must obtain a NIB and register their business activities through the Online Single Submission system. In line with the relevant regulations in the manpower sector, BKPM Regulation 1/2020 re-affirms that a NIB now also serves as evidence of initial submission of a Mandatory Manpower Report (Wajib Lapor Ketenagakerjaan – “WLTK”) for business actors who have not yet submitted their WLTKs and not obtained any NIB previously.
BKPM Regulation 1/2020 provides that that business actors are allowed to have a supporting project, provided that (i) the supporting project is outside the scope of its relevant KBLI number stated in its NIB, (ii) the supporting project merely serves as supporting activities to its main project, (iii) the supporting project is not performed to generate profit, and (iv) the supporting projects is performed in accordance with the relevant prevailing laws and regulations. The supporting project requires a separate Business License (izin Usaha) and/or Commercial/Operational License (Izin Komersial/Operasional) from the main project.
Business Licenses and/or Commercial/Operational Licenses
BKPM Regulation 1/2020 sets out types of issuance of Business License and Commercial/Operational License, which are divided into the following types:
- Type 1: Business License and Commercial/Operational License issued without commitment fulfilment.
- Type 2: Business License and Commercial/Operational License issued with technical requirements.
- Type 3: Business License and Commercial/Operational License issued with fee requirements.
- Type 4: Business License and Commercial/Operational License issued with technical and fee requirements.
BKPM Regulation 1/2020 provides that business actors can carry out business merger under their relevant business licenses. The merger can be carried out upon the Merger Deed has been approved by the Ministry of Law and Human Rights (“MLHR”) through the legal entity administration system managed by the MLHR. Following the approval from the MLHR, the Online Single Submission system will issue a Merger Business License. The surviving entity must still satisfy the commitment relating to the relevant Business License and/or Commercial/Operational License as well as comply with relevant business sector requirements in accordance with the prevailing laws and regulations.