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Per 2 January 2019 operations of the online single submission (OSS) system are transferred from the Coordinating Ministry of Economic Affairs to the Indonesia Investment Coordinating Board (BKPM).
The OSS system - based on (1) Presidential Regulation No. 91/2017 on the Acceleration of Business Implementation, and (2) Government Regulation No. 24/2018 on the Electronically Integrated Business Licensing Service - was designed to cut lengthy bureaucratic procedures (red tape) in Indonesia, thereby attracting more direct investment. One of the key bottlenecks that undermines the realization of direct investment into Southeast Asia’s largest economy is a huge pile of paperwork that needs to be done before obtaining all investment licenses.
Moreover, regulations between various government institutions tend to be different, resulting in a situation where the investor needs to go back and forth between officials at several institutions - on various occasions - to get some insight into how the process needs to be completed. The subsequent result: a delay.
The OSS licensing system is therefore designed to simplify business registration in Indonesia as several permits – the business registration number (NIB) and operational permit – can be obtained within two hours if all required data is submitted into the system. This allows investors to immediately start further preparations to run their future business in Indonesia while awaiting other formal documents.
However, the OSS has already experienced various problems, while some persistent bottlenecks continue to undermine the attractiveness of Indonesia's investment climate. For example, some regional governments simply ignore the OSS system.
This articles discusses:
• the reasons why the Indonesian government came up with the OSS System
• the problems that occur in the OSS, such as design errors, and weak coordination and cooperation between the central and regional authorities
• the progress that has been made with the OSS system
Read the full article in the January 2019 edition of our monthly research report. This report is scheduled to be released in early February 2019. You can purchase the report by sending an email to email@example.com or a WhatsApp message to the following number: +62(0)8788.410.6944