The government has issued Government Regulation No. 6 of 2021 concerning the Implementation of Regional Business Licensing (Gov. Reg. 6/2021). Effective from 2 February 2021, this regulation has been released to provide swift, easy, integrated, transparent, efficient, effective, and accountable implementation of regional business licensing.
Gov. Reg. 6/2021 is also intended as the legal basis for integrating regional business licensing through electronic means based on the norms, standards, procedures, and criteria set by the central government. The quality of regional business licensing is improved to provide legal certainty in doing business, improve the investment ecosystem, and maintain accountable quality of licensing.
The scope of the implementation of regional business licensing stipulated under the government regulation includes: the authority to administer regional business licensing; implementation of regional business licensing; regional regulations and regional head regulations concerning business licensing; reporting on the implementation of regional business licensing; guidance and supervision; funding; and administrative penalties.
This regulation outlines that the central government, provincial government, and district/city governments shall exercise the authority to implement regional business licensing as per their respective authority based on statutory provisions.
The authority of the provincial government in implementing business licensing is delegated by the governor to the head of the provincial Investment and One-Stop Integrated Service (Dinas Penanaman Modal dan Pelayanan Terpadu Satu Pintu/DPMPTSP). In contrast, the regency/municipal regional government authority in the implementation of business licensing is delegated by the regent/mayor to the head of regency/municipal DPMPTSP. The delegation of authority to DPMPTSP includes the implementation of business licensing which falls under the central government’s authority but has been delegated to the governor or regent/mayor.
DPMPTSP refers to a regional apparatus with the task and function of administering government affairs in the investment sector which constitutes the regional authority. In providing business licensing services, DPMPSTP is obliged to apply the Management of Regional Business Licensing, which includes: implementation of services, management of public complaints, management of information, outreach to the community, consulting services, and legal assistance.
The business licensing service provided by DPMPTSP is free of charge. However, certain business licenses at DPMPTSP are subject to regional retribution as per statutory provisions. Certain types of permit retribution include retribution for building construction permits, retribution for permits for venues selling alcoholic beverages, retribution for routing permits, and retribution for fishery business permits. DPMPTSP, however, does not bear the target of local retribution revenues for certain licensing services it provides.