LEGAL UPDATES BY BEPARTNERS
Corporate
OSS 1.1 – Unwritten Policies Have Finally Been Written
14 May 2020

The Indonesian government has finally issued the long-awaited implementation regulation for Government Regulation No. 24 of 2018 concerning Electronic Integrated Business Licensing Services (“GR No. 24/2018”) or better known as the Online Single Submission system (“OSS”). This implementing regulation was released as BKPM Head (or the Indonesian Investment Coordinating Board) Regulation No. 1 of 2020 Guidelines for the Implementation of Electronic Integrated Business Licensing Services (“Perka No. 1/2020). Previously, the OSS system was under the authority of the Coordinating Ministry for Economic Affairs. Subsequently, based on the Regulation of the Coordinating Minister for Economic Affairs No. 13 of 2018 the Business Licensing and Management of OSS was then transferred to BKPM since 2 January 2019.

 

The issuance of this Perka is clearly very helpful for businesses actors that are going to obtain business licenses in Indonesia via the OSS system. This regulation contains provisions that were previously only known when consulting with BKPM, and were answered by the officers verbally with the "BKPM unwritten policy" appendage.

 

Given the very broad scope of Perka No. 1/2020, this article will discuss some matters that have finally been regulated that affect the OSS system and new aspects that should be known based on Perka No. 1/2020.

Note: N/A – Not previously stipulated in GR 24/2018.

 

The following are aspects that must be underlined since the enactment of Perka No. 1/2020:

  1. Businesses who do not have an NIB (Business Identity Number) but has Company Registration Certificate, Importer Identification Numbers, and Customs Access Rights that are still valid or expired or have its data changes, are required to register for NIB; and

 

  1. Business who have obtained a Business Permit and / or Commercial or Operational Permit prior to the enactment of GR No. 24 of 2018 concerning Electronic Integrated Business Licensing Services, must obtain an NIB and register their business activities through the OSS system. Keep in mind that the business license will continue to apply if there is no change in business activities.

 

Indeed, the issuance of Perka No. 1/2020 will help business actors. Keep in mind since the OSS continuously "improves" its system, this will cause side effect related to changes in regulation arising from its improvement of the system. For example, since OSS 1.1 was introduced the government, especially the BKPM, expects business to be able to quickly adapt without adequate counseling or socialization.

 

Such socialization is very much required, especially for Notaries who are currently the main gate in the selection of the KBLI and the Negative Investment List. Subsequently, because the OSS system has been integrated with AHU online, there are some information that strictly cannot be changed through OSS, which then requires business actors to make changes through AHU by making a new deed of change. If there is a writing error from the Notary, it will cause the data entered into AHU to become incorrect, so it cannot be pulled successfully into the OSS system.

 

Furthermore, regional DPMPTSP and OSS must be synergized, in this case the central BKPM on licenses that must go through regional approval. As now current practices, there are still many overlapping licenses, where even some regions do not recognize the licenses issued by the OSS on the grounds that they do not know or have no prior approval from the regions.

 

The factors mentioned above may be input for the government, especially BKPM in operating the OSS system. We strongly agree if there is an opinion that the OSS system is very helpful in assisting business to obtain business license that was previously hindered by bureaucracy. Improvement of this system will always be awaited by business actors, which will then help attract more investment towards Indonesia because of the ease of licensing. Hopefully this will continue to develop and bring the Indonesian economy to a better level.  

 

If there are any queries with regards to how this may affect your business, please contact us for further legal consultation.

 

This information does not, and is not intended to, constitute as legal advice; instead, all information, content, and materials are for general information only.

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