OSS RBA A New Guideline for Business Registration in Indonesia

March 1, 2022

Since the enactment of the Job Creation Law on November 2, 2020, the government has changed the business licensing procedure to a Risk-Based Licensing Approach, which is carried out through one platform, namely Online Single Submission (Integrated Online Licensing or OSS). In accordance with Government Regulation Number 5 of 2021 concerning Implementation of Risk-Based Business Licensing, this electronic system aims to simplify and speed up the business licensing process so Investors will find it easier to register the business in Indonesia

Online Single Submission Risk-Based (OSS-RBA) replaces the previous version, namely OSS 1.1. Businesses only need to take care of licensing according to the level of risk of their business activities. For example, low-risk business activities only require a Business Identification Number (NIB), while high-risk business activities require an NIB as well as a business license such as the ministry/institution/regional government licenses

OSS-RBA is a one-door system, therefore, businesses do not need to visit many places to apply for permits. The OSS-RBA system has been integrated with the Ministry of Home Affairs (Dukcapil), Ministry of Finance (Tax service office), Ministry of Law and Human Rights (company information), and Ministry of Agrarian and Spatial Planning (detailed spatial planning) for the establishment of business activities. OSS is also integrated with the One Stop Integrated Service (PTSP) of the Technical Ministry and Regional Institutions for business permits, location permits, and environmental permits, while the registration process at OSS and business development is managed by the Ministry of Investment/Investment Coordinating Board (BKPM).

BKPM will provide fiscal and non-fiscal incentives for investors who invest in Priority Business Sectors. Fiscal incentives consist of income tax incentives (tax allowance), reduction of corporate income tax (tax holiday), and reduction of net income in the context of investment as well as reduction of gross income in the context of certain activities (investment allowance). Furthermore, investors will receive customs incentives in the form of exemption from import duties on machinery and goods and materials for industrial construction or development.

Meanwhile, non-fiscal incentives include ease of business licensing, provision of supporting infrastructure, guarantee of energy availability, guaranteed availability of raw materials, immigration and employment incentives, as well as other facilities in accordance with the provisions of laws and regulations. In addition, special business fields or partnerships with Cooperatives (Koperasi) and Small Medium Enterprise (SME) are also considered.

For more information please contact your Tricor representative.

Sources : BKPM publication

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Topics: Indonesia, Regulatory Updates

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