The Indonesian Investment Coordinating Board (Badan Koordinasi Penanaman Modal/BKPM) has released a regulation that serves as guidelines and procedures for risk-based business licensing services and investment facilities that are electronically integrated, standardized, timely, simple, and transparent.

These guidelines and procedures are outlined in the Indonesian Investment Coordinating Board Regulation No. 4 of 2021 concerning Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities (PER BKPM 4/2021). BKPM releases this regulation to render legal certainty in the process of implementing risk-based business licensing.

Risk-based business licensing refers to business licensing based on the risk level of businesses. Risk-based business licensing is managed and implemented through the Online Single Submission (OSS) System which is administered by an OSS Institution (BKPM).

The guidelines and service procedures are intended as the implementation guidelines of risk-based business licensing and provision of investment facilities for seven parties, inter alia: (i) OSS Institution (BKPM); (ii) ministries/agencies; (iii) provincial One-Stop Investment Service (Dinas Penanaman Modal dan Pelayanan Terpadu Satu Pintu/DPMPTSP) and technical regional apparatus; (iv) regency/municipal DPMPTSP and regency/municipal technical regional apparatus; (v) administrators of Special Economic Zones (Kawasan Ekonomi Khusus/KEK); (vi) Public Service Agency of Free Trade Zone and Free Port (Kawasan Perdagangan Bebas dan Pelabuhan Bebas/KPBPB); and/or (vii) other business players and the general public.

In further detail, two types of services are regulated under PER BKPM 4/2021. First, the business licensing issuance service. This service consists of seven types of services, including: (i) business player data and business data; (ii) issuance of risk-based business licensing; (iii) issuance of business licensing to support businesses; (iv) issuance of risk-based business licensing for micro and small enterprises (MSEs); (v) changes in business data; (vi) business development; and (vii) business mergers, consolidations, and liquidations.

Second, investment facility services. This service includes two types of services, i.e. fiscal facility services and non-fiscal facility services. The guidelines and procedures to acquire investment facility services in the form of fiscal facilities through the OSS system stipulated under this regulation include the following seven facilities:

i.	import duty exemptions on imports;
ii.	income tax for investments in certain business sectors and/or in certain regions;
iii.	corporate income tax reduction;
iv.	corporate income tax reduction and income tax facilities for investments in certain business sectors and/or in certain areas in KEK;
v.	gross income reduction for certain research and development activities in Indonesia;
vi.	gross income for the implementation of internship, apprenticeship, and/or learning in the framework of fostering and developing certain competency-based human resources; and
vii.	net income reduction for new investments or business spin-offs in certain business sectors that constitute labor-intensive industries.

Details of the facility coverage, facility-receiving objects, provisions on the granting of facilities, as well as procedures for the application and provisions on the approval for the granting of facilities for all types of fiscal facilities are outlined in Chapter V of PER BKPM 4/2021.

Moreover, PER BKPM 4/2021 states that business players that already obtain Business Identification Numbers (Nomor Izin Berusaha/NIB) and business licenses based on commitments or have not been effective as stipulated under Government Regulation No. 24 of 2018 shall be notified through the OSS system. The notification states that said business players are obliged to reconfirm the previous business data. Further, the OSS system will adjust the confirmation of business data to the risk-based business licensing.

In the event that the old business license has been adjusted to the risk-based business license, the OSS system will notify the relevant ministries/non-ministerial government agencies as well as the business player. This notification will be employed as the basis for the application process for various investment facilities.

Promulgated on 1 April 2021, PER BKPM 4/2021 shall take effect as of 2 June 2021. The enactment of PER BKPM 4/2021 simultaneously revokes the Indonesian Investment Coordinating Board Regulation No. 6 of 2018 concerning Guidelines and Procedures for Licensing and Investment Facilities as amended by the Indonesian Investment Coordinating Board Regulation No. 5 of 2019.

Moreover, the enactment of PER BKPM 4/2021 also revokes the Indonesian Investment Coordinating Board Regulation No. 1 of 2020 concerning Guidelines for the Implementation of Electronically Integrated Licensing Services.

PER BKPM 4/2021 also stipulates that applications for business licenses submitted before this regulation takes effect shall be processed using the OSS system and/or applicable procedures until the enactment of PER BKPM 4/2021. Business licenses held by business players that are still valid before the promulgation of PER BKPM 4/2021 may continue to be used as per their respective businesses. However, if said business players do not yet have NIB, they are obliged to register for NIB through the OSS system.

Next, for business players that have applied for business licenses prior to the enactment of the PER BKPM 4/2021, but the business licenses have not yet been issued, their licenses shall be processed through the OSS system as per the provisions under PER BKPM 4/2021. On another note, for business players that have obtained business licenses before the enactment of PER BKPM 4/2021 and require new business licenses, the following provisions shall apply:

i.	applications and issuance of business licenses for business development and/or activities or commercial or operational activities shall be carried out through the OSS system by completing data and/or meeting requirements as per statutory provisions;
ii.	business players shall be granted Business Licensing as per statutory provisions.

Procedures for Risk-Based Business Licensing Services and Application of Investment Fiscal Facilities through the OSS System