Online Single Submission (OSS) for Investment Ease in Indonesia

Online Single Submission (OSS) for Investment Ease in Indonesia

The brand-new online single submission (OSS) is the real evidence that the Indonesian government can make betterment in economic stability.


Planning to open a company in Indonesia? That would be such a dazzling idea. There are plenty of benefits you can have while investing in the archipelago. As one of the paramount markets in Southeast Asia, the nation discloses a mass of opportunities for foreigners to get the most out of their business.



Not only does the administration offer varied business classifications from property to restaurant, but it makes the investment process a lot easier.  The work of the local government in producing the reform is such a brilliant indication.



One of the recent innovations that the authority successfully makes is nothing else but the online single submission licensing system known as OSS. Unlike the previous business licensing system, OSS is impactful. So, what is it? OSS is a service of business licensing that uses the presence of digital technology.



The administration’s agency issues the license. For more information about OSS; there is no better way other than checking these following things out!





Why the Online Single Submission (OSS) System is Created

The objective of issuing the online single submission portal is pretty clear – that’s to ease the business registration in Indonesia. In other words, OSS is a system that allows the business players to acquire a business license efficiently and effectively.



How does the indication go? It turns out that the online single submission (OSS) business licensing service that is electronically integrated has been mapped out to mitigate the Indonesian bureaucratic procedure, relatively lengthy and complicated.



The conventional procedure, in line with convoluted bureaucracy, hampering the business people in obtaining an official certification from the government has caused some troubles. That’s why this invention is eventually made.




Regulations regarding the Online Single Submission Portal

Generally speaking, how the technical matter and mechanism of OSS licensing system is carefully regulated by the local administration. The presence of online single submission concerns two official measures.



They include president regulation number 91 the year 2017 on business implementation acceleration and government regulation number 24 the year 2018 on integrated business license service (PP OSS). Specified in the civil law, the legal position of OSS licensing system is nothing but robust.



When it comes to parties behind this successful project, you will find it fully promoted. The interesting fact indicates that the system is supported by some ministries and governmental elements from an assortment of Indonesian ministries to administrative agencies of Indonesia.



The groups embrace the Ministry of Justice and Human Rights (the General Law Administration System), Ministry of Home Affairs (from population administration information system), and not to mention the system of INSW (the Indonesian National Single Window).  Moreover, the system is fully supervised by the Coordinating Ministry for Economic Affairs at the present moment.



How is the key contribution of the ministries and related bodies after the issuance of the government regulation number 24 year 2018 (PP OSS)? There is nothing to question when it comes to dealing with the performance of the people. According to a credible source, each element of ministry technically and financially supports the existence of the online single submission licensing system.



The campaign conveyed to the public keeps ongoing. The thing that is worth noting is when the Indonesian president summons some heads of regions for an important meeting. The Indonesian leader has ensured that the application of online single submission licensing system (OSS) is trouble free and fully carried out across the country.




What does the Government Regulation Number 24 the Year 2018 (PP OSS) Refer to?

Some of you that belong to the active applicants might go with a query, i.e., “how are the business license validity and its policy regulated prior to the government regulation number 24 year 2018 (PP OSS)?



Here is the thing; as a matter of fact, this enactment has a basis – article 25 of law number 25 the year 2007 on capital investment and not to mention article 6 and 7 of law number 23 the year 2014 concerning the local government. In addition to the previous laws, the government regulation number 24 the year 2018 (PP OSS) is concerning the amended law named law number 9 the year 2015.



The earlier regulation stipulates that the licensing and authorization of a business establishment must be by the prevailing laws. Unlike the recent application electronically integrated, the licensing system used to be known as a one-stop integrated service (pelayanan terpadu satu pintu or PTSP).



This condition is specified in act 5 of article 25 of 2007’s government law. This type of service is way more effective than preceding systems, but it remains offline. The licensing process from application to document issuance is performed in one place.





Get to Know the Mechanism of OSS Licensing System

Those who are not familiar with the brand-new system, it’s time for you to figure out the exact procedure in doing it. At the bottom, the mechanism of online single submission is arguably straightforward. Simply follow the provided procedure online, and everything will be all right.



The earliest step that a business player is required to do is doing the registration using the OSS system. While taking this procedure, you need to submit your data and information. Before the process of data submission, be sure that the personal information about you and your company is valid and can be accounted for.



After registering it, you will obtain a business identification number (it’s called Nomor Induk Berusaha or NIB in Bahasa Indonesia). The number is always active as long as the business people keep carrying out their business activities in accord with the prevailing local laws.



Although this kind of thing is less noticeable, this is impactful. The NIB will find its misshapen side once the business players no longer operate their enterprise. To put it in another way, the people should be responsible for their main duties.



In addition to a business identification number, you need to get to know that NIB comes with a couple of essential functions. Not only does the number serve as investment registration (better known as pendaftaran penananaman modal) but it also becomes a certificate of company registration (tanda daftar perusahaan or TDP).



Two additional roles of NIB include a customs access right as well as an importer identification number (recognized as API (angka pengenal importir). The signification of the function of NIB is that the business individuals are not subjected to get hold of each of four licenses.



Aside from the fact that there is no need to acquiring the additional licenses from investment registration to API, those who fruitfully registered have access for being a participant of healthcare social security as well as manpower – these terms refer to BPJS Kesehatan and BPJS Ketenagakerjaan.



Once the business identification number is released, the following thing that the applicant is required to perform is nothing else but fulfilling an array of commitments. This step lets the applicants – once again – submit some required documents and reward with an administration fee. The payment is based on the guideline of each sector.



Is the length of the application process specified in the government regulation number 24 the year 2018 (PP OSS)? As claimed by the recent fact, there is no definite information regarding how long the related agency responsible for issuing the OSS.



What about the previous business license issued before the freshest government regulation? It turns out the existing license is considered valid. Hence, there is nothing to get worried about if your document is according to the preceding regulation.




Types of Online Single Submission Users

In essence, there are two kinds of users of online single submission. The first one is named individual while the second sort refers to non-individuals. To elucidate the second category, it’s vital that you savvy the groups.



In short, they belong to general companies, limited liability companies, agencies focusing on public service, local common companies, entities legally owned by the state, agencies of broadcasting, and not to mention the legal bodies set up by joint ventures, groundwork or foundation, civil partnership, and cooperatives.




Some Details on the Subject of Business License Application Process

Let’s specify the additional information by clarifying some necessary points in the matter of gaining a NIB (business identification number). To make anything accessible, be sure to provide some required information.



The evidence includes the ID number, the individuals’ address, capital investment’s location, type of business, plan of manpower utilization, rate of capital investment carefully planned, contact number of the business as well as the enterprise activity, identification number of individual tax (recognized as NPWP), and plan in requesting the fiscal or other sorts of legal matter.



What about non-individual users? Is the required information as same as the individual users? It is slightly poles apart. The information for the procedure of submission encompasses name of the legal entities as well as the deed of registration number, kind of capital investment, business line, the origin country of the shareholders (particularly the foreigners), contact number of company, plan of labor force utilization, value of capital investment planned, NIK of the business, the NPWP of the non-individual users as well as plan to request the legal classifications.



When the subject is the limited liability company, the keynote is that the legal business entity is in need of providing a deed of establishment that is fully certified and the official consent from the Ministry of Law and Human Rights. The type of submission carried out by the body is somewhat different as it directly is linked to the good name of the company. Once the information is false, it will result in a fatality not only for one person but also to many.



Subsequent to acquiring the NIB (business identification number) issued by the OSS agency, the business players, for sure, can take a couple of benefits such as obtaining land, setting up a building and operating it, revamping the size of land, gaining equipment and facilities, hiring people for work, generating some products and services, and many others.



The issuance of the business license in Indonesia is in accord with the allowed business fields. The sectors include tourism, food and pharmaceuticals, education and culture, finance, environment and forestry, agriculture, transportation, enterprises (from small to big) and cooperatives, communication and information, and some others.



Aside from business license, the business people are asked to acquire another additional permit known as a commercial or operational license. Fundamentally, this determination applies to particular business activities as well as products. This type of license is merely not about a license. It can certificate, standard, and the same is true of the product standard. Everything submitted should agree with the prevailing regulations and laws.





How does the BKPM (Indonesian Investment Coordinating Board) Transfer Its Authority concerning the One-Stop Licensing to Economy Ministry?

The authority transfer from BKPM to the Indonesian Ministry of Economy (specifically the Coordinating Ministry for Economic Affairs or CMEA) is in a temporary state. For the licensing process by way of online single submission to run well, the related ministry is supported by the system of Indonesia National Single Window (INSW). According to a credible source, BKPM will re-take over the OSS system in November 2018. In brief, the transfer is performed temporarily.



During the transition period, the applicants who have submitted the application using the traditional system but don’t obtain any business license (before the issuance of government regulation number 24 the year 2018), they are still required to re-do the application procedure using OSS system.



This condition is also applicable to business players who have already gained either a commercial or operational license before the enactment and now plan to get a fresh license because of the business expansion.




How is the Investment Value for Foreign Companies (PT PMA) Filled after the issuance of government regulation number 24 the year 2018?

There is no specific determination about the number of investment values for PT PMA after the government regulation number 24 the year 2018 is released. The stipulation about the minimum value of the share, i.e. 10 million rupiahs is likely nothing to change. Under the regulation of 13 of 2007, the foreign companies still go with the minimum investment which is more than 10 billion rupiahs and paid-up capital which is more than 2.5 billion rupiahs.



In addition to the investment value applicable for PT PMA, another form that is considered unclear is none other than how the OSS system accommodates the regulation about the negative investment list. As we know that the latest foreign ownership toward the wholesale distribution business is about 67 percent – it used to be 100 percent.  It also doesn’t specify – whether or not – the business lines are in line with KBLI classifications. Apart from the obscurity, the OSS system comes with great forwardness regarding the operation.





Other Impacts of Online Single Submission (OSS)

As it mentions before, the tangible impact of the business players can greatly take advantage of is the single registration number. The brand-new term refers to NIB. With this, you are, without doubt, accessible to benefit the employment social security and national health care.



For the foreign companies, the presence NIB is nothing yet valuable. It effectively replaces the In-Principle license that is previously issued by the Indonesian Investment Coordinating Board (BKPM).



The OSS system has let the business establishment more accelerated and simplified. Based on someone’s testimony, it turns out the issuance of the business identification number (NIB) and business license only require a day. Compared to the preceding state, this fact truly is mesmerizing.



Everything looks straightforward and fast. The fresh system letting the business players acquire two types of license is a meaningful sophistication that the Indonesian government has to offer.



The fact that OSS system is such a continuous improvement has led the responsibility of notaries rises. The related people arguably take over the main task of the Indonesian Investment Coordinating Board (BKPM) particularly in examining the foreign investment.



The best description of notaries’ job is to make sure that the line of business that the foreign companies (PT PMA) take is compatible with the code of Indonesian Standard Business Classification or KBLI as well as the set of restrictions assigned in the latest negative investment list.



Finally, the online single submission (OSS) is finally in the hand of OSS agency. The related party highly supervises everything in the system. As the government and its supporting elements count on what OSS agency does, the full authority is given to it. Don’t you know that the accomplice of the administration has a right to impose any sanctions concerning the administrative matter?



In conclusion, online single submission license (OSS) for investment ease in Indonesia is a great reform that the local administration has offered to the public. It is an effective step to boost the economic growth of Indonesia and attract more foreigners to invest in the country.




Relefance: Fintech Organizers in Payment System Now Must Register at Bank Indonesia


SMART Consulting is an Indonesian Corporate Legal Services firm. SMART has assisted Clients in dealing with matters related to Investment Law, such as assist Client to establish Foreign Direct Investment Company and Representative Office. We also assist Clients regarding the Compliance and Corporate Legal Services.


Contact Us Now to get your legal solution for your business goals, and still comply with the prevailing laws and regulations.


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