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

Good news for foreign investor related to energy and mineral resources came from BKPM, they just issued Three hour license service.

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.

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Pandu Biasramadhan

Pandu is the Consulting Manager at Cekindo. He has extensive experience in working with government agencies. Notably, he has provided market-entry solutions for enterprises in Indonesia and managed regional partnership channels in Southeast Asia. At Cekindo, Pandu aspires to lead the consulting team to provide top-quality market-entry services and maintain a portfolio of global clientele. His specialty is market-entry advisory and business process outsourcing.