three hour license service

Update from BKPM: Three-Hour License Service For Energy Sector

  • InCorp Editorial Team
  • 14 February 2017
  • 3 minute reading time

Three-hour licensing procedure was issued by Indonesian Investment Coordinating Board (BKPM) on January 30, 2017.

This is a good news for foreign investors related to energy and mineral resources. This rapid licensing procedure is for nine types of operations (eight of which are for oil and gas sectors and one of them is for electricity procurement industry).


The Nine Types of Operations

The nine types of operation in the field of energy sectors that are served by the three-hour licensing service include:

  1. LPG (oil, fuel, liquefied petroleum gas) Temporary business license
  2. CNG (storage of processed products or compressed natural gas) Temporary business license
  3. LNG (liquefied natural gas) Temporary business license
  4. Oil residue processing industry Temporary business license
  5. General trade of oil and fuel Temporary business license
  6. Trade of processed products Temporary business license
  7. Oil refining Temporary business license
  8. Natural gas processing, Temporary business license
  9. Electricity procurement industry Temporary business license

The Difference between the Regular Licensing Process and three hour license service

This new system is to boost the investment in Indonesian energy sectors because similar licenses usually take between 20 to 45 business days to complete if finish through the regular service in BKPM—which often requires companies to deal with complicated bureaucracy systems. This is often considered overwhelming, especially when there is some error in the documents as the company has to start the process from the very first step due to the unavailability of license or document revision policy.

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The Administrative Requirements

The issuing of the three-hour license service is an effort by the government of Indonesia that expects to improve foreign investment in this field. Although it is also said that investors may still experience several challenges, including the transportation and difficult topography in Indonesia that make the transportation and distribution cost becomes extremely expensive. Infrastructure is also to be another obstacle that need to improve by the government. However, this government’s attempt to cut the bureaucracy procedure in licensing, especially in the energy sector wants to be a fresh air for the foreign investors.

Check more updates from BKPM: OSS System Services Begin to Operate at BKPM

Companies of those nine categories can obtain the licenses if they can fulfill all of the documents and technical requirements that are set to be the administrative requirements. This written in the Decree No. 15/2016. Issued by the Ministry of Energy and Mineral Resources. This concerning the three-hour licensing service. Especially for infrastructure in the field of energy and mineral resources.

How Cekindo Can Help You

Cekindo has assisted many companies in setting up their businesses in Indonesia. Cekindo can help you to prepare every documents needed so that you can take the benefits of this three-hour licensing service.Cekindo can help you starting from the initial preparation of the prerequisite documents up to the final issuing of the licenses. Cekindo is also willing to answer all of your questions related to the Indonesian policies concerning the foreign investment in energy sectors. Please contact us for more details or simply leave your comments under the article. Our professional team will assist you further.

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.

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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.

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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.

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.

Yes, you must apply for it to be able to issue work permits for your foreign employees. This permanent business license is also a prerequisite for the applications for other business licenses and import licenses.