REGULATION OF INVESTMENT COORDINATING e-licensing BOARD NO. 13 of 2017

Transcription

1 Shifting to digital age : Toward paperless licensing REGULATION OF INVESTMENT COORDINATING e-licensing BOARD NO. 13 of 2017 Deputy Chairman for Investment Services ONE STOP SERVICE CENTER - BKPM Jakarta, February 2018

2 BASIC PRINCIPLES OF FOREIGN DIRECT INVESTMENT (FDI) Law No. 25/2007 definition of FDI (Article 1 (3)) Foreign investment is an investment activity to conduct business in the territory of the Republic of Indonesia by foreign investor, whether fully funded by foreign capital or in partnership with domestic investor Law No. 20/2008 Large Companies Qualification for FDI having net assets of more than ten billion Rupiah exclusive of land and building at their place of business; or having maximum annual sales proceeds of more than fifty billion Rupiah Presidential Regulation No. 44/2016 Lists Of Business Fields That Are Closed To And Business Fields That Are Open With Conditions To Investment: Foreign investors should check whether their business field is Closed or Open With Conditions To Investment i.e. reserved for or should be in partnership with Small, Micro, and Medium Enterprises and/or Cooperatives; limited foreign capital ownership; should be in certain locations; should has special licenses/permits Regulation BKPM No. 13/2017 procedure of investment license 2

3 INVESTMENT LICENSING PROCEDURES

4 BASIC PROCEDURE FOR INVESTMENT LICENSING 1 Pemerintahan Daerah Preparation Penanaman Construction persiapan Modal 3 4 Pelayanan Production Publik 2 PERIZINAN REGIONAL DAERAH LICENSING PERIZINAN TECHNICAL TEKNIS LICENSING 4

5 Before (Chairman of BKPM Regulation No. 14 / 2015) investment procedures are not differentiated base on location and business fields AFTER BKPM Regulation No. 13 of 2017 investment procedures are differentiated base on location and business fields BUSINESS FIELD a. Investment in the business field that requires construction phase before their production phase (phases for building construction, machine installation, fiscal facility utilization, enviromnetal pollution potential, etc). BUSINESS LOCATION a.investment located INSIDE SEZs, KPBPB, IEs dan KSPN b.investment located OUTSDIE SEZs, KPBPB, IEs dan KSPN b. Investment in the business field that does not requires construction phase before their production phase Special Economic Zones (SEZs), Free Ports and Free Trade Zones (KPBPB), Industrial Estates (IEs) and National Tourism Strategic Zones (KSPN) Investment Licensing Products: -Investment Registration (PI) -Business Licenses (in accordance with business license format on each Ministerial Regulation) 5

6 INVESTMENT NOT REQUIRED CONSTRUCTION PHASE

7 direct BUSINESS LICENSE PREPARATION CONSTRUCTION PRODUCTION For business field that is not required construction phase, example: trade, consultation services, etc. BUSINESS LICENSE PT (Indonesia Legal Entity) 1. Notarial Deed + Decree of the Minister of Justice and Human Rights 2. Tax registration 3. Domicile legality OTHER LICENSES if applicable Business License is valid during operational phase Except if it is stated otherwise by Law. 7

8 ASSESSMENT OF BUSINESS LICENSE 1. Legal Aspect of Legal Entity Notarial Deed + Decree of the Minister of Justice and Human Rights Tax registration, company registration, etc 2. Legal Aspect of Domicile Right to Build, Building permit, Leasing proof BUSINESS LICENSE Foreign companies is only able to conduct their business based on approval from government as stated on their licenses Every changes in licenses MUST be registered. 8

9 INVESTMENT REQUIRED CONSTRUCTION PHASE

10 Project location is INSIDE SEZs/KPBPB/IEs/KSPN Preparation* Pemerintahan Penanaman Construction persiapan Pelayanan Production Daerah Modal Publik INVESTMENT REGISTRATION + 7 LICENSES* + CHECKLIST REGISTER * Notes: 1.Notarial Deed + Decree of the Minister of Justice and Human Rights 2.Tax registration 3.Company registration 4.Employment plan 5.Working permit 6.Import identification 7.Customs registration 2 PERIZINAN REGIONAL DAERAH LICENSING PARALLEL PERIZINAN TECHNICAL TEKNIS LICENSING 10

11 Project location is OUTSIDE SEZs/KPBPB/IEs/KSPN (START FROM JANUARY 2018) Preparation* Pemerintahan Penanaman Construction persiapan Pelayanan Production Daerah Modal Publik INVESTMENT REGISTRATION + 3 LICENSES* *Notes: 1. Notarial Deed + Decree of the Minister of Justice and Human Rights 2. Tax registration 3. Company registration 2 PERIZINAN REGIONAL DAERAH LICENSING PERIZINAN TECHNICAL TEKNIS LICENSING 11

12 ASSESSMENT OF BUSINESS LICENSES 1. Legal Aspect of Legal Entity Notarial Deed + Decree of the Minister of Justice and Human Rights Tax registration, company registration, etc 2. Legal Aspect of Domicile Right to Cultivate, Right to Build, Building permit, Leasing proof 3. Legal Aspect of Business Activities Recommendation from Ministries/Government Agencies Technical/operational licenses 4. Legal Aspect of Environment Environmental and Social Impact Assessment (AMDAL/UKL-UPL) + Environmental Licenses 5. Investment Online Report (LKPM) Every reporting period Foreign companies is only able to conduct their business based on approval from government as stated on their licenses Every changes in licenses MUST be registered. 6. Minutes of Inspection (BAP)* for industrial sector *) Minutes of Inspection (BAP) is a report of field inspection on the investment realization. 12

13 LICENSE ISSUANCE MECHANISM AT ONE STOP SERVICE (OSS) CENTER AT BKPM Manual submission of Business license*) Online submission and product digitalization Investment Registration and Business License On Stop Service Center at BKPM Applicant License submitted to Ministries liaison officer 1 Back office 2 Applicant 1 Apply through BKPM On-Line System Back office Administration 4 Signing Stored at Company Folder License can be dowloaded by investor Approval Approved License will be Signed with Digital Signature *) gradually depend on the readiness of the related Ministries Shifting to digital age : Toward paperless licensing 13

14 INVESTMENT PROVISIONS

15 REPRESENTATIVE OFFICE TYPE IN INDONESIA Foreign Representative Office (KPPA) Foreign Trade Company Representative Office (KPPPA) Foreign Construction Company Representative Office (BUJKA) Foreign Oil and Gas Company Representative Office (KPPA Migas) Presidential Decree No. 90 of 2000 Ministry of Trade Regulation No. 10 of 2006 Ministry of Public Work & Public Housing No. 10 of 2017 Law no. 22 of 2001 & Ministry Energy and Mineral Resources Decree No 1454 K/30/MEM/2000 Issued by OSS Center at BKPM 15

16 OPENING BRANCH OFFICES IN INDONESIA BRANCH OFFICES may be opened in all regions of Indonesia FDI Company OSS Center at BKPM Unless otherwise specified by Law (Trade, Transportation (JPT)) 16

17 IMPLEMENTATION OF DIVESTMENT OBLIGATION DIVESTMENT Company licenses before Obligation based on BUSINESS FIELDS PROVISION Divestment obligations according to its business fields MUST EXECUTE the divestment provision in accordance with laws and regulations. The Obligations based on Government Regulation No. 20/1994 Divestment obligation CAN BE NOT EXECUTED if General Meeting of Shareholers (GMS) Document does not state commitment/agreement with any Indonesian party to sell the shares. If in the future there are Indonesian parties demand to do divestment obligations and approved by all shareholders, then it becomes shareholders/company s responsibility TO EXECUTE THE DIVESTATION. Implementation of Divestment: conducted based on GMS Document minimum share is IDR 10 million It is possible to buyback, with reference to the DNI regulation 17

18 VENTURE CAPITAL COMPANY PROCEDURE Venture Capital Company (PMV) can be a shareholder in the investment company DOMESTIC PMV FOREIGN PMV are treated as a nationwide capital investment Capital investment PMV is temporary and should not exceed 10 (ten) years* The time period can be extended twice with a total renewal period should not exceed 10 (ten) years. If the time period is expired, the company must transfer the PMV shares to another party. *Since it is approved by Ministry of Law and Human Rights 18

19 INVESTMENT FACILITIES

20 PROCEDURE ON EXEMPTION OF IMPORT DUTY ON IMPORTED MACHINERY, GOODS AND MATERIALS MoF regulation 176/2009 Jo. 76/2012 application is submitted online INVESTMENT REGISTRATION Main requirements to get import duty exemption for goods and materials : having a valid business license (IU) Submitted at the latest 2 years after IU is issued Decree of the MOF on Determination for Granting Exemption Facility of import duty on the imported machines (2 Years) BUSSINESS LICENSE *only for industrial sector ALTERATION/REPLACEMENT ADDITION* EXTENSION PERIOD OF IMPORTATION MOVING LOCATION OF IMPORTED MACHINES Main requirements to get import duty exemption for machines: -having a valid investment registration / Principle license -Submitted at the latest 3 years after PI/IP is issued ALTERATION/ REPLACEMENT EXTENSION PERIOD OF IMPORTATION (1 Year) Decree of the MoF on Determination for Granting Exemption Facility of import duty on the imported goods and materials * (2 years) *the ALTERATION application could be submitted 3 months BEFORE the Decree of Facility is issued, unless it s completed with import documents (Bill of Landing, Invoice, Contract) 20

21 PROVISION OF LOADING AND UNLOADING PORT IN ONE KPPBC Facility of Import Duty for Machinery Loading and unloading location for imported machineries that have received fiscal facility can be done in several ports located in one KPPBC If it is still located in one KPPBC, company does not need to submit masterlist amandment 21

22 PROCEDURE ON IMPORT DUTY EXEMPTION FOR CAPITAL GOODS (ELECTRICITY) APPLICATION IS SUBMITTED ONLINE BUSINESS ENTITY: A. PT. PLN (PERSERO) B. Electric Power Supply Business License (IUPTL) Holders Investment Registration (PI) & IUPTL RIB (approved by Directorate General of Electricity, Ministry of Energy and Mineral Resources) Decree of the Minister of Finance on Determination for Granting Exemption Facility of import duty on the Imported machine (2 YEARS) ALTERATION/ REPLACEMENT*) ADDITION*) EXTENTION PERIOD OF IMPORTATION *) *Based on recommendation from Plan to Import Goods (RIBP) from Directorate General of Electricity, Ministry of Energy and Mineral Resources 22

23 PROCEDURE ON IMPORT DUTY EXEMPTION FOR GOODS (KK/PKP2B) APPLICATION IS SUBMITTED ONLINE CONTRACTOR CONTRACT OF WORKS (KK)/PKP2B Masterlist Recommendation Letter from Directorate General of Mineral and Coal Decree of the Minister of Finance on Determination for Granting Exemption Facility of import duty on the importation machine (VALID SINCE EFFECTIVE DATE until 31 DEC current year) ALTERATION/ REPLACEMENT*) ADDITION*) EXTENTION PERIOD OF IMPORTATION *) *Based on recommendation from Directorate General of Mineral and Coal, Ministry of Energy and Mineral Resources 23

24 TAX ALLOWANCE FACILITY 30 TAX ALLOWANCE Government Regulation No. 18 of 2015 jo. No. 9 of 2016 % of investment value Reduction of corporate net income tax for 6 years, 5% each year. 145business fields Eligible for tax allowance, expanded from 143 segments in the previous regulation with additional segment: clothing industry. Under certain requirements among others: investment value or export orientation, manpower absorption, local content, and project location (especially outside Java island). Agriculture Livestock Corn Plantation Soybean Plantation Rice farming Tropical fruits plantation Power Generation Geothermal Alternative/energi terbarukan Oil and Gas Industry Oil refineries Liquefied Natural & Petroleum Gas Lubricants Manufacturing Industry Iron and Steel Clothing Semi conductors Electronic components Computer Communication devices Television Wheel Pharmaceutical Comsetics Fish and Shrimp processing For those taxpayers who have : Principal licenses (IP) and its changes issued by BKPM; Principal Licenses for Expansion (IP-PL) and its changes issued by BKPM; or Investment licenses issued by other authorized agency These three types of license must be issued after 5 May 2015 Tax payers who have chosen to obtain Tax Allowance according to PP No. 18/2015 jo. No. 9/2016. Taxpayers who have applied for import duty facility or corporate income tax reduction according to Article 29 of Government Regulation No. 94 of 2010 is rejected by Ministry of Finance Notes: Certain business fields and location are based on on Attachment I and II of Government Regulation No. 18 of 2015 Jo. No. 9 of 2016 SOP to process TA facility is 25 working days 24

25 TAX HOLIDAY FACILITY TAX HOLIDAY Ministy of Finance Regulation No. No.159/PMK.010/2015 jo. No. 103/PMK.010/2016 Rp1 trillion Minimum investment plan (~USD 80 million) years tax exemption With potential 20 years exemption for project that considered strategic for Indonesia economy. 8 ELIGIBLE PIONEER INDUSTRIES: 1. Basic metal industries; 2. Oil refinery industries including PPP 3. Basic organic chemicals from natural oil and gas; 4.Machinery industries; 5. Communication devices industries. 6.Agricultural processing 7. Marine transportation 8.Economic infrastructures other than PPP. CRITERIA: New Taxpayers One of pioneer industries The investment plan is IDR 1 trillion at minimun Fulfilling the DER (Debt to Equity Ratio) as stipulated in this MOF Regulation which regulate the determination of the ratio of the debt and capital of the company for the purposes of calculating the Income Tax; Statement of placement funds in Indonesian banking at minimum 10% of investment value; A legal entity whose legalization is established on or after August 5 of % CIT deduction The amount of corporate income tax deduction shall be granted at the same percentage every year for the period of granting of the facility SOP to process TH facility is 45 working days 25

26 Thank You Terima Kasih CONTACT US BADAN KOORDINASI PENANAMAN MODAL (BKPM) Jl. Jend. Gatot Subroto No. 44, Jakarta P.O. Box 3186, Indonesia Contact Us: Indonesia Investment Promotion Centre (IIPC) LESTARI INDAH : One Stop Service Contact Center: BKPM (2576) or Front Office at 2 nd fl OSS office or to info@bkpm.go.id 26