Online Single Submission System (OSS) and Business Identification Number (NIB) in Indonesia

Like in almost every country, starting a new business in Indonesia used to mean navigating a myriad of government offices at both local and provincial levels. Different regions in Indonesia might require different types of licenses based on business activities, and multiple applications and forms must be completed. In addition, various fees must be paid throughout the process.

Now, the government of Indonesia has devised a much better way to help both local and foreign investors start businesses through the Online Single Submission System (OSS) with a Single Business Identification Number (NIB), making Indonesia truly a business-friendly country.

Overview of Online Single Submission System (OSS) and NIB

According to Presidential Regulation No. 91 Year 2017, Indonesia has enforced the OSS to keep pace with the digital economic trends by digitalizing license applications for businesses in Indonesia. The OSS has been fully operational since July 2018. It is aimed at facilitating business in Indonesia, particularly for foreign investors.

Before implementing the OSS system, this paperless one-stop concept had been tested in different locations in Indonesia. It has now integrated with several governmental systems and will continuously integrate with more systems in the future.

What is OSS-RBA? 

The Online Single Submission – Risk Based Approach (OSS RBA) is a system introduced as part of the implementation of Law Number 11 of 2020 on Job Creation, which was recently updated to Law Number 6 of 2023 on Job Creation (the “Job Creation Law”). 

OSS-RBA processes business permits by assessing the level of risk and scale of business activities.

What is NIB? 

The Business Registration Number (also known as the Business Entity Number or Business Identification Number—NIB) is regarded as the new single registration number for various business purposes. 

Since then, the NIB has replaced many other licenses, permits, and documents, such as TDP, Import License (API-U/API-P), and Custom Registration Number (NIK). The procedure to obtain SIUP and other business licenses has also been simplified.

Similarly, companies that complete their business registration via OSS will be potentially certified to be registered for National Social Security Insurance (BPJS) automatically.

As a result, business registration processed through OSS enables foreign-owned companies PT PMA to forgo the principal license and use NIB to proceed with other operational and commercial permits.

Functions of NIB

Unlike the former business license or permit application process, which required a thorough and lengthy review from the BKPM (Indonesian Investment Coordinating Board), OSS makes online license registration possible in one place with NIB. 

An NIB is essential for companies operating in Indonesia, as the government cannot grant a business license without it.

When companies acquire their NIB, they gain official recognition from the government and are protected under applicable laws and regulations. Additionally, they will be automatically included in the registry of state-recognized companies in Indonesia.

Overview of OSS Regulation in Indonesia 

With the introduction of OSS-RBA, the business licensing system, which covers information services for business licensing, the application process for permits for primary and supporting business activities, and licensing supervision, is now fully integrated and can be managed through a single system.

The regulations supporting OSS-RBA in Indonesia include

• Government Regulation Number 5 of 2021 on the Implementation of Risk-Based Business Licensing (GR No.5/2021);
• BKPM Regulation Number 3 of 2021 on the Electronically Integrated Risk-Based Business Licensing System;
• BKPM Regulation Number 4 of 2021 on Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities; and
• BKPM Regulation Number 5 of 2021 on Guidelines and Procedures for Supervising Risk-Based Business Licensing.

Steps to Obtain Business Identification Numbers through OSS

The application process for the NIB involves three steps, typically taking around 5 to 10 weeks to complete.

It is important to note that the company must apply for a physical NPWP card at the tax office. However, the NIB application can proceed before obtaining this physical card.

Requirements to Get a Business Identification Number

There are some documents needed to apply for a Business Identification Number (NIB). Those are: 

• Deed of establishment for the business
• Approval from the Ministry of Law and Human Rights
• Tax identification number (NPWP)

Replacing Other Permits and Licenses

Business Registration Number (also known as Business Entity Number or Business Identification Number—NIB) is regarded as the new single registration number for various business purposes. Since then, the NIB has replaced many other licenses, permits, and documents, such as TDP, Import License (API-U/API-P), and Custom Registration Number (NIK). The procedure to obtain SIUP and other business licenses has also been simplified.

Similarly, companies that complete their business registration via OSS will be potentially certified to be registered for National Social Security Insurance (BPJS) automatically.

As a result, business registration processed through OSS enables foreign-owned companies PT PMA to forgo the principal license and use NIB to proceed with other operational and commercial permits.

Should You Use OSS?

While the previous business registration process took weeks, the OSS system introduced a one-stop licensing solution with NIB that will only take hours. You will most likely obtain your NIB in 30 minutes. Furthermore, issuing NIB can avoid license or permit duplication.

What if Your NIB Registration Is Rejected?

AHU online is the administrative system responsible for all legal entity registration and company data change. At the same time, OSS acts as an agency that authorizes and issues commercial and operational licenses for companies listed on the AHU online.

Only some sectors are allowed to register for NIB through OSS even though they are registered at AHU online. In this case, these companies must adjust their business type, intent, and purpose following the OSS standards within a year to obtain their NIB.

Seamless Business Set Up with InCorp 

Introducing the Online Single Submission (OSS) system in Indonesia aims to simplify business registration. However, the process can still be confusing for newcomers. InCorp Indonesia, a leading market entry expert, is here to guide you through this process. 

Our experts offer comprehensive company registration and business license services, ensuring compliance with all applicable regulations and a seamless business setup. Contact our team for more information, and let us help you navigate the complexities of starting your business in Indonesia.