three hour license service

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

  • InCorp Editorial Team
  • 14 February 2017
  • 3 minutes 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.

Verified by

Hotdo Nauli

Senior Legal & Delivery Manager at InCorp Indonesia

Hotdo heads the Legal and Delivery team at InCorp Indonesia, managing Product Registration, Legal Advisory, and Business Licensing. With over 8 years of experience, she focuses on compliance and integrity, ensuring all client operations align with Indonesian laws and regulatory standards, including contract reviews and sector-specific licenses. She is also a licensed advocate and a member of the Indonesian Advocates Association (PERADI). 

Frequently Asked Questions

    The investment requirement for PMA companies in Indonesia varies based on their classification under the Indonesia Industrial Standard Classification (KBLI). Generally, a minimum investment of IDR 10,000,000,000 (ten billion Indonesian Rupiah), excluding investment in land and buildings, is needed to conduct one business activity in one location.

    You can transfer the license if your local distributor agrees to change the product license holder.

    According to Presidential Regulation No. 10/2021 and the amended version, all businesses are open for domestic and foreign investment with these limitations and classifications:

    • Eight businesses are closed to foreign investment and may be operated by the central government.
    • Designated business sectors or joint ventures with cooperatives (koperasi) and micro, small, and medium enterprises
    • Open businesses are subject to specific conditions, such as those that are exclusively available to 100% local investors, those with restricted foreign shareholding, and investments requiring special licenses

    Certain sectors are closed to foreign investment, including narcotics cultivation, gambling, and environmental conservation activities.

    Register the product with BPOM (National Agency of Food and Drugs) and MoH (Ministry of Health). The type of testing and document requirements depend on the type of product you want to register. Also, the time frame for registration could vary between 3 to 15 months.

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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.