Client Newsflash

Improvements of Industrial Business Licensing Processes

The Minister of Industry (the “MOI”) issued MOI Regulation No. 30 of 2019 dated October 18, 2019 on Amendments to Minister of Industry Regulation No. 15 of 2019 on the Issuance of Industrial Business Licenses and Expansion Licenses Under the Electronically Integrated Business-Licensing Services Framework (“Regulation 30/2019”). Regulation 30/2019 eases the business licensing process and the issuance of industrial business licenses regulated under MOI Regulation No. 15 of 2019 dated May 6, 2019 on the Issuance of Industrial Business Licenses and Expansion Licenses Under the Electronically Integrated Business-Licensing Services Framework (“Regulation 15/2019”). Regulation 30/2019 is in line with the Government’s vision to increase investment in Indonesia by eliminating barriers to investment.

We set out below the main changes under Regulation 30/2019.

  • No Requirements for Location Permits and Environmental Licenses

Previously, Regulation 15/2019 required a Location Permit and an Environmental License as commitments that an Industrial Business License (Izin Usaha Industri or an “IUI”) holder must fulfill so that the IUI will be effective. Regulation 30/2019 removes these commitments.

Regulation 30/2019 also has new provisions for Small and Medium-sized Industries. Small and Medium-sized Industries are excluded from the requirement to have a Certificate (Surat Keterangan) stating that the company is exempted from the obligation of being located in an Industrial Zone. Further, for Small Industries, the commitment to have undergone technical verification is replaced by a ready-to-operate statement issued by the company.

  • Field Examinations Changed to Technical Verifications

Regulation 30/2019 replaces the requirement of a field inspection with a technical verification. The difference is that a technical verification may be carried out by way of document examination and/or field examination. Regulation 30/2019 also reduces the time for the implementation of a technical verification from 20 (twenty) working days to 7 (seven) working days after the submission of a technical verification application.

  • Amendments of Industrial Business Licenses

To amend an IUI, the relevant directorate general, provincial, or regency/city service office shall conduct a technical verification by document examination and field inspection (only if necessary). Under Regulation 30/2019, the technical verification shall be conducted no later than 7 (seven) working days from the submission of the application for the amendment of the IUI.

  • Issuance of Expansion Licenses

To obtain an Expansion License (i.e., a license to carry out expansion of production capacity in the same business line under an IUI), an industrial company shall fulfil the commitments of submittingthe  Industrial Data through the National Industrial Information System (Sistem Informasi Industri Nasional or the “SIINas”) and it shall be technically verified. Previously, Regulation 15/2019 stipulated that these commitments had to be fulfilled within 3 (three) months as of the date of an Expansion License. Regulation 30/2019 removes this deadline. A company may submit the application for the technical verification through the SIINAs whenever it is ready to carry out the expansion commercially. Before applying for the technical verification, a company shall submit the Industrial Data (also through the SIINAs) of the past 2 (two) years prior to the application for the technical verification.

  • Existing IUIs May Be Notified to OSS

Under Regulation 30/2019, a company that already holds an IUI prior to the enactment of Government Regulation No. 24 of 2018 dated June 21, 2018 on Electronically Integrated Business Licensing Services may notify its existing IUI to the OSS.  Such IUI is deemed effective as of its issuance, provided that there are no changes to the business activities of the holder. There is no need to apply for the re-issuance of an IUI by the OSS as previously stipulated in Regulation 15/2019.

 

December 3, 2019

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