The Information Sub-System

​

The information sub-system provides the data necessary to obtain risk-based business licensing and other information related to its implementation.  The information provided consists of: 

​

• KBLI based on risk-level;

• spatial plan;

• provisions on investment requirements;

• the requirements and/or obligations of business licensing, including term, implementation standard of business activities, supporting business activities and other conditions on norms, standards, procedures, and criteria of the business sectors, guidelines, and methods for submission of NIB, standard certificates, and permits;

• primary requirements on the conformity of space utilization activities, PBG, and SLF;

• provisions on investment incentives and facilities;

• supervision of business licensing and reporting obligations;

• simulation on business licensing services, guidance for OSS system users, OSS system dictionaries, and frequently asked questions;

• public complaints service; and

• other information as determined by the OSS Agency.

​

The aforementioned information is accessible to the public without requiring specific access rights.  

​

The Risk-Based Business Licensing Sub-system

​

The risk-based business licensing sub-system manages the issuance process of risk-based business licensing.  This system consists of the following stages of business permitting issuance: 

​

• account or right to access registration;

• low-risk business licensing in the form of NIB;

• medium risk business licensing, which consists of NIB and standard certificates; and

• high-risk business licensing, which consists of NIB and permits.

​​

The business licensing sub-system is accessible using the right to access granted to entrepreneurs, OSS Agency, ministries/agencies, provincial DPMPTSP, DPMPTSP of city/regency, KEK administrators, and KPBPB entrepreneur.  Additionally, the OSS Agency may provide limited access rights to other parties not mentioned above. 

​

The Applicant of Business Licensing

​

Applicants who can conduct an application for business licensing through the OSS system are as follows: 

​

• an individual, being a citizen of the Republic of Indonesia, capable of acting and performing legal acts;

• the business entity, a legal entity incorporated in the Republic of Indonesia conducting business activities in specific sectors, including:

1. limited liability company;

2. limited partnership (commanditaire vennootschap/cv);

3. firm (venootschap onder firma);

4. private partnership;

5. cooperative;

6. foundation;

7. public enterprise;

8. regional public enterprises;

9. other legal entities owned by the state; and

10. broadcasting agencies;

• representative office, comprising (i) an individual, who is a citizen of the Republic of Indonesia; (ii) an individual, who is a foreign citizen; or (iii) a business entity acting as a representative for the foreign entrepreneur, engaging in low-risk business activities;

• the foreign business entity, established outside the Republic of Indonesia, engaging in business and/or activities in specific sectors, including:

1. foreign franchise;

2. foreign futures trader;

3. electronic system operator of private foreign scope; and

4. permanent establishment/bentuk usaha tetap. 

​

The Registration to Get the Right to Access

​

The right to access can be granted to (i) individuals; (ii) the director/person in charge of the enterprise; or (iii) the management of the cooperation and/or foundation.  The access rights for these mentioned institutions can be managed through the assignment of ministry/agency, provincial DPMPTSP, DPMPTSP of city/regency, KEK administrator, and KPBPB entrepreneur.  These administrators possess the authority grant a derived access rights based on this designated authority and necessity.  The OSS Agency will then evaluate the granting of both access rights and derived access rights. 

​

Entrepreneurs are granted the right to access for the following purposes: 

​

• conducting the application for business licensing, including the alteration and revocation;

• submitting a report on investment activities; 

• submitting complaints; and/or

• executing an application for joint facilities.

​

Right to access for ministries/agencies, provincial DPMPTSP, DPMPTSP of city/regency, KEK administrator, and KPBPB entrepreneur are granted for the following purposes: 

​

• conducting technical verification and notification of fulfilment of risk-based business licensing requirements;

• the implementation of supervision schedule; and

• the reporting on the results of supervision/minutes of the performance of business activities.

​

Furthermore, the application of rights can be conducted by the entrepreneurs as follow: 

​

• individuals apply by submitting NIK (National Identification Number);

• business entities apply by submitting the validation number of the business entity;

• public enterprises, regional public enterprises, other legal entities owned by the state, public broadcasting agencies, and/or public service agencies by submitting the legal basis for incorporation;

• limited partnership and/or private partnerships apply by offering a legal basis for the incorporation; and

• representative offices and/or foreign business entities apply by submitting the NIK of the head of usual office/person in charge of citizen of the Republic of Indonesia, or the passport number of the head of the representative office/person in charge for foreign citizens. 

​

NIB

​

1. NIB as Prerequisite for Risk-Based Business Licensing

​

Every entrepreneur is required to have a NIB, as a requirement to conduct business activity. It is issued by the OSS Agency with specific numbers given securely and accompanied by an E-Signature.  NIB serves as both an identity and proof of registration for entrepreneurs to conduct business activities.  Additionally, a NIB has multiple functions, including: 

​

• API;

• right to access custom and excise affairs;

• registration for the entrepreneur membership for social security for health and employment; and

• the mandatory employment report for the entrepreneur’s first period

​​

The entrepreneur requiring an API may choose from the following: 

​

• general API for the import of traded goods; or

• manufacture API for the import of personal goods that are used as capital goods, raw materials, auxiliary materials, and/or materials used to support the production process.

​

The right to access customs and excise affairs is utilized by: (i) entrepreneurs conducting export/import activities; or (ii) individual entrepreneurs capable of conducting export activities.  Furthermore, the NIB consists of the following data: 

​

• profile;

• business capital;

• NPWP;

• KBLI; and

• business location.

​

To obtain an NIB, the individual entrepreneur shall submit the aforementioned data through the OSS system.  For an individual entrepreneur without an NPWP, they can apply for an NPWP through the OSS system.   A business entity is required to submit its profile, business capital, NPWP, and KBLI through the integration between the OSS system and the ministerial system, which manages government affairs in the human rights law sector.  Additionally, the OSS system will validate the NPWP integration between the OSS system and the ministerial system, which manages government affairs in the state financial sector.  Moreover, the business location will be validated by the OSS system through integration between the OSS system and the ministerial system, which manages the government affairs in the spatial sector. 

​

Moreover, the OSS system ensures the conformity of data, as mentioned above, with the provisions of the business sector and other investment provisions, including: 

​

• a business sector that is classified as priority business sector;

• business sector allocation for UMKM and cooperatives;

• obligation to conduct partnership with UMKM and cooperatives; and

• provisions on the specific business sector (single purpose).

​

Conformity with the other investment provisions mentioned above will determine the incentive and/or facilities that entrepreneurs will obtain.  After submitting the required data, the entrepreneurs also need to undergo a clarification process for their business activities, including: 

​

• principal business activities are defined as those stated in the deed of incorporation, serving a commercial purpose, acting as revenue sources, or generating profits for the entrepreneurs;

• supporting business activities as follows:

1. activities that support the main business activities;

2. do not constitute an income source for the entrepreneurs; and

3. can be done and completed before the implementation of the main business activities.

• The administrative branch office, which is a part of its parent company, can be located in a different place and has an organizational function.

​

Furthermore, the entrepreneurs who have submitted the required data shall continue the process to obtain risk-based business licensing through the OSS system. This involves presenting the data for each KBLI code that consists of 5 (five) digits and location, which at least contains: 

​

• type of product that is produced;

• product capacity;

• the number of workers; and

• investment value plan.

​

The OSS system will evaluate the investment value plan submitted by entrepreneurs, considering including the minimum investment amount and conditions on capital for foreign investment.  Thereafter, the issuance of NIB will be based on: 

​

• risk level;

• examination of the business sector provisions;

• analysis of the minimum investment provisions; and

• analysis of the capital provisions.

​

The risk level will be determined in accordance with norms, standards, procedures, and criteria automatically validated by the OSS system.  The NIB will remain valid as long as the entrepreneur continues to conduct their business/activity under the provisions of the laws. 

​

 2. NIB Revocation

​

However, in some cases, the NIB can be revoked under the following conditions: 

​

• the entrepreneur is no longer engaged in the business activity stated in the NIB;

• the entrepreneur is violating provisions of the laws related to the business licensing;

• the application of NIB revocation by the entrepreneur is accepted;

• dissolution of the entrepreneurs; or

• revocation based on a legally binding court decision.

​

The Risk-Based Business Licensing Issuance

​

As previously explained, the risk-based approach to business licensing classifies business activities into the following risk levels: (i) low-risk business activity; (ii) medium-risk business activity; and (iii) high-risk business activity.  Each level entails different requirements for obtaining a business license.

​

1. Low-Risk Business Activity

 

If the business activities are classified as low risk, the OSS system will automatically issue the NIB after the entrepreneurs submit the required data.  The NIB serves as both the legal document allowing for conduct of business activities and the SPPL.  

​

2. Medium-Risk Business Activity

​

The medium-risk activities are further divided into 2 (two) classifications: 

• medium low-risk business activity; and

• medium high-risk business activity.

​

2. A.  Medium Low-Risk Business Activity

​

In accordance with business activities classified as ‘medium-low risk’, entrepreneurs are required to submit a statement of their ability to comply with the business activities’ standards through the OSS system after completing the mentioned data.   Additionally, other required documents must be submitted, such as:

​

• Entrepreneurs shall also submit the SPPL form available in the OSS system to obtain NIB and standard certificates if the business activities are not classified as mandatory to meet UKL-UPL standards. 

• Entrepreneurs must also submit the UKL-UPL form available in the OSS system to obtain NIB and standard certificates, even if the business activities are classified as mandatory to meet UKL-UPL standards. 

​​

Additionally, if the medium low-risk and the medium high-risk business activities require product standardization, the entrepreneurs shall ensure standard product compliance through the OSS system.  The OSS system will then forward the standardized products to the ministry/agency following the respective authorities' verification. 

 

2. B. Medium High-Risk Business Activity

​

In the event that the business activities are classified as medium high-risk, the entrepreneur shall submit a statement of ability to comply with the business activities’ standards. This is done through the OSS system, after completing the abovementioned data.  Furthermore, in addition to the submission of the aforementioned statement of ability:

​

• Entrepreneurs shall also submit the SPPL form available in the OSS system to obtain NIB and standard certificates, if the business activities are not classified as mandatory to meet UKL-UPL standards. 

• Entrepreneurs are required to submit the UKL-UPL form available through the OSS system to obtain the NIB and standard certificate listing unverified marks, if their business activities fall under the category of mandatory compliance with UKL-UPL standards.  The formal certificate listing unverified signatures will serve as the basis for the preparation of business activities. 
   

After obtaining the NIB and a standard certificate listing unverified marks, entrepreneurs must adhere to business activity standards by meeting the specified terms and complying with based on norms, standards, procedures, and criteria through the OSS system.  Subsequently, the OSS system will forward the fulfillment of business activity standards to the relevant authorities, including the ministry/agency, provincial DPMPTSP, DPMPTSP of city/regency, KEK administrator, and KPBPB business entities following their respective authorities to conduct the verification.   The verification is performed by the ministry/agency, regional apparatus, KEK administrator, or KPBPB entrepreneur following the terms and based on norms, standards, procedures, and criteria. 

​

Following the verification, the ministry/agency, regional apparatus, KEK administrator, or KPBPB entrepreneur will provide notification to the OSS system indicating whether the entrepreneurs have met the stipulated requirements.  In conducting the verification process, the KEK administrator or KPBPB entrepreneur may cooperate with ministries/agencies, provincial apparatuses, regency/city apparatuses, regional apparatuses, or other related agencies or certified/accredited based on the laws.  

​

In the event that the notification confirms the entrepreneurs have met the stipulated requirements, the OSS system will indicate that the standard certificate has been verified, allowing the entrepreneurs to proceed with the printing of the certificate.  However, if the notification indicates that the entrepreneurs have not fulfilled the requirements yet, then in that case, the OSS system will notify the entrepreneurs to address the standard certificate’s needs according to the terms set out in the norms, standards, procedures, and criteria.  Subsequently, the entrepreneurs are required to apply through the OSS system to initiate the verification process once again.  If the entrepreneurs still do not meet the requirements, the OSS system will revoke the unverified standard certificate. 

Moreover, if the medium low-risk and the medium high-risk business activities need product standardization, the entrepreneurs are obligated to undertake standard product compliance procedures through the OSS system.  The OSS system will subsequently transmit the product standards to the ministry/agency following verification by the respective authorities. 

​

3. High-Risk Business Activity

​

Before engaging in high-risk business activities, the entrepreneurs must own an NIB which had been issued through the OSS system.  After obtaining said NIB, the entrepreneurs must satisfy the requirements for a permit in accordance with the norms, standards, procedures, and criteria before being able to carry out their operational and/or commercial activities.  For certain business activities require AMDAL.  Subsequently, the OSS system will forward the completion of requirements to the ministry/agency, provincial DPMPTSP, regency/city DPMPTSP, KEK administrator, or KPBPB entrepreneur following their respective authority to conduct the verification. 

​

The verification process is conducted by the ministry/agency, regional apparatus, KEK administrator, or KPBPB entrepreneur of which  is based on established norms, standards, procedures, and criteria.  Based on the verification result, the ministry/agency, regional apparatus, KEK administrator, or KPBPB entrepreneur will notify the OSS system on whether the entrepreneurs have complied with the requirements.  To conduct such verifications, the KEK administrator or KPBPB business may cooperate with those from the ministry/agency, regional apparatus, or other related agencies or professionals who are certified or accredited based on the laws. 

​

If the notification declares/confirms the entrepreneurs’ compliance with  requirements, the OSS system will issue the permit to them.  However, suppose that the report advises that the entrepreneurs have not satisfied the requirements yet, the OSS system will inform the entrepreneurs to meet the criteria again to obtain the permit through the OSS system.  If the ministry/agency, regional apparatus, KEK administrator, or KPBPB entrepreneur do not notify the OSS system of the verification result, the OSS system will issue the permit. 

​

Additionally, in the event that the high-risk business activities are required to meet business activity and/or product standards, entrepreneurs will convey such business activity and/or product standards through the OSS system following the norms, standards, procedures, and criteria. (A bit verbose, possible suggestion: Furthermore, if high-risk business activities necessitate compliance with business activity and/or product standards, entrepreneurs must convey these standards through the OSS system, in accordance with established norms)  Subsequently, the OSS system will forward the following: 
 

• fulfillment of business activity standards to the ministry/agency, provincial DPMPTSP, DPMPTSP of city/regency, KEK administrator, and KPBPB entrepreneur following their respective authorities to conduct the verification and notification; and

• fulfillment of product standards to the ministry/agency to complete the confirmation and information.

 

The Business Licensing Issuance and Facilities for UMK

​

UMK may be eligible for streamlined business licensing through a single licensing process.  If UMK conducts low-risk business activity, the UMK entrepreneur will be able to obtain a NIB through the OSS system as a business identity and legality.  The NIB acquired by UMKs involved in low-risk business activities could be used as SNI and Halal Assurance Statement.  However, for UMK entrepreneurs that are conducting medium or high-risk business activity, in addition to the NIB, UMK entrepreneurs must have the required certificate standard and/or permit.  

​

The OSS system will facilitate the submission of applications to the ministry/agency, regional government, KEK administrator, and KPBPB entrepreneur.  The granting of a certificate and/or permit for UMK is equivalent to the risk-based business licensing as elaborated above. 

​

The Supervision Sub-system

​

The supervision of the Risk-Based Business Licensing Sub-system shall be conducted in an integrated and coordinated manner among ministries/agencies, provincial governments, district/city governments, KEK administrators and/or KPBPB concession agencies, through the Supervision subsystem of the OSS System.  The Supervision Sub-system as referred to in Article 7 (1) BKPM Reg. No. 5/2021 is used as a means to carry out the supervision of: 

​

• standards and/or obligations for the implementation of business activities; and

• development of investment realization, as well as, providing facilities, incentives, and facilities for investment, and/or partnership obligations.

​​

As part of the OSS systems, the Supervision Sub-system serves as a medium to implement Risk-Based Business Licensing supervision.  The Supervision Sub-system contains at least the following components: ​

​

• planning of annual field inspections;

• periodic reports from entrepreneurs and data on the development of business activities;

• supervision work apparatuses;

• assessment of compliance in the implementation of business licensing;

• handling complaints towards entrepreneurs and executors of supervision as well as their follow-ups; and

• providing guidance and implementing sanctions.

​​

This Sub-system can be accessed and carried out by: 

​

• the entrepreneurs;

• the OSS agency;

• ministries/agencies;

• provincial DPMPTSP;

• KEK Administrators; and

• KPBPB Concession Boards.

​

The OSS Agency

​

The OSS system is an electronically integrated system managed and organized by the OSS Agency for the implementation of Risk-Based Business Licensing.  The OSS system is governed by the OSS Agency, namely the government agency that administers the government affairs in investment coordination. 

​

The OSS Agency holds the authority to issue NIBs and to also revoke NIBs for low to high-risk business activities.  The OSS Agency may also grant unverified business activities standard certificates to business activities with medium high-risk levels.   Business licensing, issued by the OSS Agency, shall follow the norms, standards, procedures, and criteria set by the central government and regional governments.  The issuance of business license shall be carried out by: 

​

• the OSS Agency;

• the OSS Agency on behalf of ministers/heads of agencies;

• the head of a provincial DPMPTSP on behalf of a governor;

• the head of a regency/city DPMPTSP on behalf of a regent/mayor;

• KEK administrators; and

• the head of a KPBPB Concession Board.

​​

The business licensing format is standardized based on the OSS System and is available to each business licensing publisher in accordance with their authority.  Business license that will expire can be extended by applying for an extension of the business license through the OSS system no later than 1 (one) month before the end of the business licensing period.  Risk-based business licensing is implemented electronically and in an integrated manner through the OSS system.  The OSS system consists of an information service sub-system, business licensing sub-system, and supervision sub-system. In particular, the OSS system must be used by: 

​

• ministries or agencies;

• provincial governments;

• regency/city governments;

• special economic zone administrators;

• the KPBPB Concession Board; and

• entrepreneurs.

​​

Every entrepreneur may be subject to administrative sanctions for any violations of the following obligations: 

​

• report every replacement of construction workers;

• meet the minimum requirements for the number of main equipment for each sub-classification;

• own and extend construction business entity certificates for a construction service business entity;

• own and extend a Construction Work Competency Certificate for construction workers;

• submit annual business activity reports through the construction services business application system in the integrated construction services information system;

• record the experience of business entities and individual businesses; and/or

• comply with the provisions required for representative offices of foreign construction service business entities and foreign investment construction service business entities.

​

Correlation between BKPM, Central PTSP, and DPMPTSP

Based on the information in the previous sections, it can be concluded that BKPM, Central PTSP, and DPMPTSP have important responsibilities in conducting business licensing, and the roles each institution play are related to one another. The correlation between the three institutions is illustrated in the graphic below: