The Indonesian Investment Coordinating Board (BKPM) recently issued new guidelines for investment licences and facilities applications. The new guidelines, set out in the BKPM Regulation concerning Guidelines and Procedures for Investment Licensing and Facilities (13/2017), took effect on January 2 2018 for the BKPM Central One Stop Integrated Services (PTSP) Office, but will not apply to the regional PTSP offices or PTSP offices in the free trade zone or special economic zone until July 2 2018.
This update examines the key provisions of the regulation which concern issues not regulated in the previous BKPM regulations on the same subject.
A company investing in a specific business field may apply for a business licence directly without obtaining an investment registration if it:
- has acquired legal status and complies with the share limitation imposed by the prevailing laws and regulations;
- has a tax identification number and an office or business place; or
- already has a business or expansion licence and intends to change its status.
Regulation 13/2017 is relatively more lenient than the previous regulation with regard to the divestment obligation imposed on foreign companies.(1) Under the new regulation:
- foreign joint venture companies are not required to divest where their general meeting of shareholders (GMS) document states that their Indonesian shareholders do not want their shares to be divested as stipulated in the business approval or licence; and
- foreign companies with a 100% foreign shareholding are not required to divest where the shareholders state in the GMS document that they have not made any commitment or agreement with an Indonesian party to sell their shares.
The regulation further states that in the event that an Indonesia party demands divestment in the future, the shareholders will be responsible for doing so.
Capital participation by venture capital companies
The maximum period of capital participation in an investment company by a venture capital company has been extended from 15 to 20 years.(2)
All applications for investment registration must be conducted online through the Electronic Investment Information and Licensing Services.(3)
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