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:
- Foreign company that has already had the Principle License. Either from central PTSP or local PTSP, can directly do the construction.
- 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.