Important Update on Licensing Procedures for Location Permit

Important Update on Licensing Procedures for Location Permit

InCorp Editorial Team

Table of Content

The Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency of Indonesia has recently made effective Regulation 17/2019 on Location Permit on September 20, 2019, replacing the previous Regulation 14/2018. This new regulation was enacted to clarify the location permit issuance framework under the Online Single Submission system (OSS).

Regulation 17/2019 made changes to the licensing procedures to obtain the location permit and it covers the following major provisions:

  • Location permit’s subjects and objects
  • Licensing procedures and the period of validity
  • Permit holder’s rights and obligations

Location Permit’s Subjects and Objects

Location permit’s subjects consist of businesses that need land to run their business but they have not owned the land yet. These subjects include the following:

  • Limited liability companies
  • Public companies
  • Legally capable individuals
  • Regional public companies
  • Non-individual businesses
  • Public service entities
  • State-owned legal entities
  • Broadcasting agencies
  • Limited partnerships
  • Civil partnerships
  • Enterprises established by foundations
  • Firma partnerships
  • Cooperatives

Licensing Procedures and Period of Validity

Regulation 17/2019 puts location permit into two categories based on commitment requirements:

  • Location permit issued with commitments
  • Location permit issued without commitments

Location Permit Issued with Commitments

The main issuance procedure of location permit in Indonesia is listed in the following steps:

1. Register through the OSS system

2. Submit application of location permit along with the below documents:

  • Commitments fulfillment statements and application
  • Business identification number or NIB
  • Sketch or map including the location’s coordinates
  • Business activity plan proposal
  • Possessed land area affidavit

3. Issue location permit and relevant location map

4. Fulfill commitments

In accordance with Regulation 17/2019, applicants no longer need to submit valid service fee’s payment receipt together with the location permit applications.

Location Permit Issued without Commitments

However, the submission of payment receipt is still in fulfillment of commitments:

1. Submit requirements

  • Submit prerequisite documents within 10 working days of the OSS releasing the location permit
  • Location permit will be canceled if failing to fulfill the said condition

2. Conduct technical land considerations

  • The Land Office conducts the technical land considerations and releases results within 10 working days of the commitment submission alongside the valid proof of service fee payment
  • If the result is not issued, the application is considered as approved automatically
  • Approved technical considerations result must be sent to relevant regional governments

3. Issue approval

  • Regional government will approve or reject the location permit commitment fulfillment application within two working days upon the receipt of the technical considerations result
  • If the regional government doesn’t issue the rejection or approval within the time period, the application is considered approved automatically
  • The OSS agency must inform the Ministry of Agrarian Affairs and Spatial Planning through the OSS system regarding the approval

The location permit in Indonesia is valid for three years from its effective date with the right legalization of documents in Indonesia. Businesses may be allowed to extend the location permit for another one year if the land acquisition has reached at least half of the target of initial acquisition for their business permits in Indonesia.

Permit Holder’s Rights and Obligations

Regulation 17/2019 permits businesses to obtain land titles relating to other overlapping land titles via the below legal steps:

  • Indemnification
  • Sale and purchase
  • Land consolidation
  • Other legal acts

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Tjhia Edy Tarlesno

Legal & Compliance Manager at InCorp Indonesia

Edy Tarlesno holds various certifications and a respectable degree to be an expert on internal and external legal compliance in Indonesia. His experience starts from bankruptcy and insolvency, leading to a prominent social foundation consultancy in Indonesia.

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