On July 2018, Indonesia’s Investment Coordinating Board (BKPM) launched an upgraded version of Online Single Submission system. This updated system is a web-based business licensing system aimed at removing excessive bureaucratic procedures involved when a foreign investors try to get a business license in Indonesia. Excessive bureaucratic procedure is considered as the main obstacles when it comes to investments in Indonesia and that is the reason why government has introduced new the OSS system.
The OSS system was initially run by the Coordinating Ministry of Economic Affairs because BKPM was still not ready to handle the new system. However, BKPM finally took charge of the OSS system’s operations on 2 January 2019.
The new system launched was not flawless. Mainly because it seems that Online Single Submission system was created and launched in a rush. Therefore, various bugs and other problems followed the launch. The problems included weak cooperation between regional governments (some of them refused to use the system) and the central, outdated software, the inability of the system to help investors who are eligible for tax holidays, and many more.
Thomas Lembong as BKPM Chairman has stated that coordination and synchronization between myriad governments, ministries, and institutions (central and regional) has been improved although there has been no explanation yet about upgrades in Online Single Submission system.
Actually, Online Single Submission System was created to attract more foreign investors to invest in Indonesia. In 2018, the total amount of direct investment had reached IDR 721.3 trillion which was 4.1 percent higher than the previous year. However, it still missed the initial target of IDR 765 trillion set by the government. Domestic direct investment saw growth of 25.3 percent compared to previous year. However, foreign direct investment experienced quite the opposite. It fell by 8.8 percent from last year to only IDR 392.7 trillion.
It was because foreign investors would wait until legislative and presidential election which was held on April 17 2019. The high degree of persistent global uncertainties was most likely reduce the foreign investors’ intention as well.
In last March, BKPM annual meeting gathered all 560 central and regional branches. In this meeting, which also invited Indonesian president Mr. Joko Widodo, the upgraded version of the system was released. Let’s hope that the latest will attract many foreign investors in Indonesia.
What can businesses do with OSS in Indonesia?
The OSS system makes it possible for businesses to get all licenses in one place. Businesses can also apply their Business Registration Number (NIB) with OSS which can now be used as:
Goods and Services Exempt from VAT in Indonesia:
- Import license (previously known as API-U)
- Business registry number (previously known as TDP)
- Customs Identification Number (previously known as NIK)
How do businesses register with OSS?
Businesses first need to get approval from Ministry of Law and Human Rights in Indonesia through Deed of Establishment. After this, businesses can register for OSS system. For this registration, businesses need the NIK (Single Identity Number) of the director of the company or anyone else in charge. After obtaining OSS, businesses can apply for different licenses.
How MAM Corporate Solutions can help?
MAM Corporate Solutions helps many investors on daily basis to incorporate companies in Indonesia. Part of this process is to setting up their OSS system so that all licenses can be easily applied. If you need help with registration of OSS system, contact MAM Corporate Solutions for expert advice.
Contact MAM Corporate Solutions
If you wish to register for OSS system, Contact us here or provide below as much detail about your inquiry as possible to receive the most relevant response.