easy investing program

Easy Investing Service Program in Indonesia

  • InCorp Editorial Team
  • 30 April 2016
  • 3 minute reading time

This is good news for investors that target Indonesia as their potential market. The Indonesian government through its Investment Coordinating Board (BKPM) has issued two new policies that enable investor to conveniently invest in Indonesia.

The two policies are called Kemudahan Investasi Langsung (KLIK), which is literally translated as Simplicity in Direct Investment as well as the 3-hour service for the investment permit upgrade.

A Memorandum of Understanding regarding those issues was signed on February 22nd, 2016. Presidents and the regional leaders from 6 provinces and regents or mayors from 9 districts or cities sign this memorandum. As a pilot project, only 6 provinces are included in the program. including Central Java (3 industrial areas). East Java (1 industrial area), West Java (5 industrial areas) , Banten (3 industrial areas). South Sulawesi (1 industrial area), and North Sumatra (1 industrial area). Other areas are expected to join the program in the near future.

From a press release made by BKPM, the new “KLIK” program enables foreign enterprise to do the following things:

  1. Foreign company that has already had the Principle License. Either from central PTSP or local PTSP, can directly do the construction.
  2. At the same time, they can also process the Building Permit, Environmental License (UKL/UPL, AMDAL), and other licenses based on the Estate Regulation.

It means that foreign companies can save a lot of time and energy to deal with the long and confusing bureaucracy in Indonesia.

The main reason to issue the two programs are to attract more investors in specific areas to Indonesia and give them opportunity to immediately construct their plant(s) or factories right after getting the principle license. The new policies will be beneficial for both the country and the investors. The vast areas in the program coverage make it possible for investors to expand across Indonesia, whereas the investments themselves will provide countless job opportunities for the local people.

Future Impact for easy investing program

The government predicts that the new program will increase Indonesia’s competitiveness. So that Indonesia can meet its investment target that reaches IDR 594.8 trillion in 2016. Foreign investors had dealt with confusing and long bureaucratic processes while attempting to construct something for their businesses. Now, they can do several processes at once and shorten the chains.

Another great advantage is all foreign investors can enjoy the benefit of these two programs since there is no limitation in the minimum requirements for investment values and number of labors.

If you need further information on this issue, feel free to contact Cekindo. Our experts will assist you to deal with all the documents needed to establish a foreign company in Indonesia legally

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

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Disclaimer: The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.

We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.

We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

Frequent Asked Questions

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.