Indonesia to boost investment through easy, fast licensing service
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The Indonesian government held a closed-door meeting to discuss efforts to boost investment and business through the implementation of an easy and fast licensing service.
“We should improve all aspects of licensing in relation to issuing building and environmental permits as well as authorization,” President Joko Widodo stated during the opening of the meeting here on Tuesday.
The president remarked that the government should improve the licensing process as part of the efforts to improve the business climate in Indonesia.
In the 2016 Ease of Doing Business 2016 survey, the World Bank ranked Indonesia 109th out of 189 countries. Singapore topped the list, with Malaysia ranking 18th, Thailand 49th, Brunei 84th, and Vietnam 90th.
The president also called for the integrated management of the business licensing and registration process to improve efficiency and boost the business climate.
The meeting was attended by Coordinating Minister for Economic Affairs Darmin Nasution, Coordinating Human Development and Culture Minister Puan Maharani, Coordinating Political, Legal and Security Affairs Minister Luhut Binsar Pandjaitan, Public Works and Public Housing Minister Basuki Hadimuljono, Agrarian and Spatial Planning Minister Ferry Mursyidan Baldan, as well as Justice and Human Rights Minister Yasonna Laoly.
Earlier, the Indonesian government had decided to prepare guidelines and revise various regulations that will make it easier to do business as part of the efforts to facilitate investors who want to start a business in Indonesia.
“These guidelines should be formulated soon and will be tabled in a cabinet meeting,” Coordinating Minister for Economic Affairs Darmin Nasution remarked after a coordination meeting here on Thursday.
The 10 indicators, which are being assessed, include the ease of starting a business, building permits, registration of ownership, payment of taxes, access to credit, and a cooperation agreement.
“In the 2016 Ease of Doing Business 2016 survey, the World Bank ranked Indonesia 109th out of 189 countries.”
Other indicators are the ease in getting an electricity connection, cross-border trade, problem-solving for bankruptcy, and protection for Micro, Small and Medium Enterprises (SMEs).
One of the rules that has been fixed is the basic capital for the establishment of a Limited Liability Company (PT).
The government will then revise Trade Regulation No. 90 of 2014 concerning the organization and development of warehouses. As a result, a warehouse registration certificate can be obtained in just a single day.
However, a warehouse, with an area of less than 98 square meters, will not require a warehouse registration certificate.
The Ministry of Public Works and Public Housing (PUPR) will also revise Ministerial Regulation No.24 of 2007 on Technical Guidelines for Building Permits (IMB). The IMB will be processed in seven days, and the costs will be reduced by half.
“We will disseminate information on all regulations in relation to the ease of doing business. The dissemination will be conducted by ministries and other institutions,” the minister affirmed.
Meanwhile, state-owned electricity company PLN will improve its procedures for granting an electricity connection. The procedures will be divided into four stages. Obtaining a new connection will take 22 days.(*)
Questions & Answers
Q.What is the primary goal of the Indonesian government's new initiative discussed in the meeting?
What is the primary goal of the Indonesian government's new initiative discussed in the meeting?
The main goal is to boost investment and business by implementing an easy and fast licensing service. This aims to improve the overall business climate in Indonesia.
Q.How will the process for obtaining a warehouse registration certificate be altered under the new regulations?
How will the process for obtaining a warehouse registration certificate be altered under the new regulations?
The government will revise Trade Regulation No. 90 of 2014, allowing a warehouse registration certificate to be obtained in a single day. Warehouses under 98 square meters will no longer require one.
Q.How quickly will building permits be processed and what cost reduction is expected?
How quickly will building permits be processed and what cost reduction is expected?
The Ministry of Public Works and Public Housing will revise Ministerial Regulation No.24 of 2007. This will enable building permits to be processed in seven days, with the costs reduced by half.
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