CAPITAL INVESTMENT PROCEDURES
By Bali and Lombok Regional Investment Coordinating Board of Bali and Lombok ProvinceA. PMDN/Domestic Capital Investments
A prospective capital investor , who will conduct an undertaking in the framework of law number 6 of 1968 as already amended by law Number 12 of 1970, shall first study the list of business sectors, closed for capital investments , and if a further elucidations is required, the BKPM / Capital Investment Coordinating Boar or the BKPMD/Regional Capital investment Coordinating Board can be contacted.
After having conducted inadequate study concerning the business sectors which are open, and other provisions concerned the prospective capital investor forwards an application for capital investment to the MENINVES ( Minister of Investment Fund Mobilization )/Chairman of the BKPM/Capital Investment Coordinating Board , by using the Application Procedures, stipulated by the MENINVES / Chairman of the BKPM
If said application is in accordance with the provisions of the legislative regulations and the prevailing conditions for Domestic Capital Investment, the MENINVES/Chairmen of the BKPM issues a Capital Investment Approval Letter, which is also effective as an Approval in Principle
To accelerate the capital investment process, the MENINVES/Chairman of the BKPM for Wards a copy of the capital investment approval letter to involved Government Agency.
If the Capital investor has already obtained a Capital investment Approval Letter and after the stipulated conditions have been met, then :
A. The MENINVES/Chairman of the BKPM issues :
A Limited Imported Identification Number ;
A Decree for the granting of import duty facilities and other import levies;
An approval for the RPTKA/Plan for the utilization of Expatriate Manpower required, as basis for the chairman of the BKPM in issuing a work permit for the expatriate manpower required;
a. Permanent Business Permit/license, on behalf of the minister, subordinating said undertaking, in accordance with the delegation of Authority
b. The Head of the Regency/Municipality Agrarian Affairs Office issues a location Permit, In accordance with the space Lay ? out Plan.
c. The Head of the Regency/Municipality Agrarian Affairs Office issues HGB/Building Right Certificate, HGU/Undertaking Right Certificate and a management Right Certificate, in accordance with the prevailing provisions
d. The Head of the public Works service of the Iind. Level Region , or the technical Work Unit , on behalf of the Regent/Municipal Mayor concerned, or the Head of the P2K / City Development Supervision service for the Jakarta Capital Special Region, on behalf of the Governor of the Jakarta Capital Special Region, issues an IMB/Building or Construction Permit.
e. The secretary of the Iind. Level Territory/Region, on behalf of the Regent / Municipal Mayor concerned, Head of the Bureau for Orderliness, on behalf of the Governor of the Jakarta Capital Special Region, issues the UUG/HO (Disturbance Ordinance Permit).
The obligation to have Disturbance Ordinance Permit is not valid for industrial companies, of Which the kind of industry is obligated to have an ANDAL/Environmental impact Analysis Ore which are located in an industrial Estate/Bonded Zone
After having obtained the Capital investment Approval Letter form the MENINVES / Chairman of the BKPM, the Capital Investor shall , within the stipulated time, forward to the BKPM, the Master List of Capital Goods and raw as well as auxiliary materials to be Imported.
Based on the evaluation of the Master List of Capital Goods and raw as well as auxiliary materials to be imported the MENINVES/Chairman of the BKPM issues a decree concerning the import duty facilities and other import levies.
Applications for amendments in the capital investment plan , which has already obtained an a approval from the MENINVES/Chairman of the BKPM , including amendments for project expansion, shall be forwarded by the capital investor to the MENINVES/Chairman of the BKPM to obtain his approval, by using the procedures as stipulated by the MENINVES/Chairman of the BKPM
The application of Domestic Investment ( PMDN ), supplemented by:
Copy Establishment deed of the company for PT, BUMN / BUMD, CV or Firm.
Copy NPWD ( Taxpayer Identification Number ) of the application.
Copy KTP ( Citizen Identity Card ) for individuals .
Description of the production process, supplemented by the process flow chard, and type ( s ) of raw auxiliary material for processing industries.
Description of the business activities for activities in service business.
B. PMA / Foreign Capital Investment
The prospective capital investor who will do business in the framework of Law Number 1 of 1967 as already amended by Law Number 11 of 1970 shall first study the prevailing List of Sectors Closed for Foreign Capital Investments. And if a further elucidation is required then the BKPM or BKPMD could be contacted.
After a sufficient study has been conducted concerning the oven business sector , and the other provisions concerned , the prospective capital investor submits a capital investment application to the MANINVES/Chairman of the BKPM by using the application procedure stipulated by the MENINVES/Chairman of the BKPM.
Based on the evaluation towards the capital investor?s application the MENINVES/Chairman Of the BKPM forwards said application to the President accompanied with the considerations to obtain a Decree.
The Approval/Refusal of the President concerning a capital investment application is forwarded to the MENINVES/Chairman of the BKPM.
If the application obtains the approval of the President, the MENINVES/Chairman of the BKPM forwards a Notification concerning the Presidential Decree to the prospective capital investor, which shall also be effective as an Approval in principles.
To accelerate the capital investment process, he MENINVES/Chairman of the BKPM forwards a copy of the presidential Notification Letter to the Government Agency involved.
When the Capital Investor has already obtained the Presidential Decree constituting the Approval for the capital investment and after the stipulated conditions have been met;
a. The MENINVES/Chairman of the BKPM issues:
The Limited Importer Identification Number;
A Decree for the provision of import Duty facilities and other import levies;
The approval of the plan for the utilization of Expatriate Manpower (RPTKA) required as basis for the chairman of the BKPMD to issue the working permit for the required expatriate manpower; The permanent business permit on behalf of the Minister sub ordination said business, in accordance with the delegation of authority. The Head of the Agrarian Affairs Office of a Regency/Municipality issues a Location Permit in accordance with the Lay-Out Plan.
b. The Head of the Agrarian Affairs Office of a Regency/Municipality issues the HGB /Building Rights and the HGU/Undertaking Rights in accordance with the prevailing Provisions.
c. The Head of the Public works service of the second Level Region on the Technical work Unit on behalf of the Regent/Municipal Mayor concerned or the Head of the P2K/City Development Supervision Service for the Jakarta Capital. Special Region on behalf of the Governor of the Capital Special Region issues the IMB/Building Construction Permit.
d. The secretary of the Iind. Level Territory/Region on behalf of the Regent/Municipal Mayor concerned or the Head of the Bureau of Underline’s for the Jakarta DKI on the behalf of the Governor , Head of the Jakarta Capital Special Region issues the UUG/HO ( Disturbance Ordinance ) permit.
The obligation to have a UUG/HO ( Disturbance ordinance ) permit shall not be effective for industrial companies of which the kind of industry is obligated to have an ANDAL or is located in an industrial Estate/Bonded Zone.
After the Capital Investment Approval Letter has been obtained from the MANINVES/Chairman of the BKPM, the capital investor within the stipulated period of tame shall forward to the BKPM a master List of the Capital goods and the raw ? and auxiliary materials to be imported.
Based on the evaluation towards the master List of the capital goods and the raw ? and auxiliary material, the MENINVES/Chairman of the BKPM issues the decree on the import duty Facilities and other import levies.
The application for an amendment on the plan for a capital investment which has already obtained a Presidential approval , including the amendment for a project expansion shall be submitted by the capital investor to the MENINVES/Chairman of the BKPM to obtain his approval by using of procedure stipulated by the MENINVES/Chairman of the BKPM.
The application of foreign Investment (PMA), Supplemented by :
Power of attorney, in case of application is not conducted by the applicant himself .
Draft Joint venture agreement .
Copy Establishment Deed of the company for PT, BUMN/BUMD, CV or Firm .
Copy NPWP ( Taxpayer Identification Number ) of the application .
Copy KTP ( Citizen Identity Card ) of individuals for Indonesia participant .
Copy visas for Individuals Foreign participant .
Bank Reference for foreign participant of individuals .
Description of the production process, supplemented by the process flow card and type (s) of raw auxiliary material for processing industries.
Description of the business activities, for activities in service business.
Capital Investments in the Non ? Oil ? Gas Mining Sector and in the Forestry Sector
The application for a domestic capital Investment in the on ? oil and gas mining sector shall be submitted to the MENINVES / Chairman of the BKPM:
Based on the work Contract between the prospective capital investor the Government. Cq . the Department of mining and energy for the exploitation of minerals of the strategic group;
Based on the Mining Licence for the exploitation of minerals of the vital group;
Based on a Regional Mining Permit for the exploitation of minerals of the non ? strategic and non ? vital groups ;
The application for a Foreign capital investment in the non ? oil ? and gas mineral mining sector in accordance with the prevailing legislative regulations shall be submitted to the MENINVES/Chairman of the BKPM based on a work Contract between the prospective capital investor and the Government cq. The Department of Mining and Energy.
The application for capital investment of the non ? oil ? and ? gas mining sector , including the application for an amendment in the capital investment already approved by the Government, shall be regulated and completed according with the prevailing provision.
The applications for domestic and foreign capital investments in the forestry sector shall be forwarded to the MENINVES/Chairman of the BKPM based on the Forest Exploitation Rights or the Timer Forest Exploitation Rights issued by the Minister of Forestry.
The application for capital investment in the forestry sector, including the applications for an amendment in the capital investment which has a already been approved by the Government, shall be regulated and completed according with the prevailing provisions.
Obligations of the Capital Investor .
Each Capital Investor shall conduct his capital investment in accordance with a already Approved provisions.
Each change in the implementation of the already approved provisions shall first obtain the Approval of the MENINVES / Chairman of the BKPM.
To obtain the approval as referred to the capital investor shall submit an application to the MENINVES/Chairman of the BKPM.
All capital investors shall submit a periodic report concerning the implementation of their Capital investment to the BKPM at stage of the project development as well as at the stage of business activities especially in the framework of the utilization of facilities in the reporting from and procedure stipulated by the MENINVES/Chairman of the BKPM.
This investment information brochure is made with the hope that it will be useful to the investors.
Foreign direct investment (PMA)
Application procedure and ITS implementation permit
FLOW CHART OF FOREIGN DIRECT INVESTMENT (PMA) APPLICATION PROCEDURE AND ITS IMPLEMENTATION PERMIT
THE INVESTMENT APPROVAL STAGE
Foreign direct investment (Penanaman Modal Asing/PMA) companies in Indonesia can be established in the form of 100% foreign ownership or a joint venture between foreign and Indonesian parties and should be incorporated as an Indonesian limited liability company (Perseroan Terbatas/PT) and domiciled in Indonesia.
To invest in Indonesia, an investor should first look at a so-called “Negative List of Investment” (Daftar Negative Investasi/DNI). The list contains those business sectors that are absolutely closed to all domestic as well as foreign investments and those fields of businesses closed to only foreign investments. The regulated business sectors in this case refer to those which are still opened to investors if certain requirements are fulfilled, such as partnership with state-owned/local companies, cooperation with small business holders, and located in certain location. The special provisions/terms for certain fields of business open to capital investment that must be observed by investors, both in applying as well as in conducting capital investment activities in Indonesia as stated in the Capital Investment Implementation Technical Guidance (Petunjuk Teknis Pelaksanaan Penanaman Modal/PTPPM).
Foreign investment approval can be issued either in Indonesia, The Office of the State Minister/Board of Investment and State-Owned Enterprises Development (BPM-PBUMN) in Jakarta or Regional Investment coordinating Board (BKPMD) in every Province, or through representative offices of the Republic of Indonesia in several countries. Therefore, investors can choose one of those offices for submitting their investment application at the most convenient one for them (please refer to Attachment 1). However, for foreign investment projects located in Bonded Zones, investors should submit the application to The Office of the State Minister/BPM-PBUMN through the respective Bonded Zone Authority.
Foreign investment application documents are to be submitted to The Office of the State Minister/BPM-PBUMN or BKPMD Concerned, Representative of the Government of Indonesia overseas where then they will be evaluated in terms of their compliance with various aspects such as sectorial policies, and finance. If further clarifications are still required, a letter will be sent to the investor concerned to request the necessary additional data and information.
Following the evaluation process, the Minister for Investment & State-Owned Enterprises/Chairman of BPM-PBUMN or Head of Corresponding Representative of the Government of the Republic of Indonesia or the Chairman of BKPMD concerned will issue the investment approval.
The entire process would take a maximum of 10 (ten) working days.
Upon the issuance of the investment approval, a foreign investment company can be legally established through the execution of the articles of incorporation in notary deed form.
Application and Approval Procedures at Representative Office of the Republic of Indonesia, The Office of the State Minister/BPM-PBUMN and BKPMD
Application and Approval Procedures in Bonded Zones
Application and Approval in Integrated Economic Development Zones (KAPET)
LICENSING PROCEDURES IN IMPLEMENTATION STAGES.
To implement an approved investment project. The Office of the State Minister/BPM-PBUMN or BKPMD will issue the following permits/ licenses as proposed by the investors: customs approval letter, limited importer license (APIT), foreign manpower plan approval (RPTKA), permanent business license (IUT) on behalf of the sectoral ministries concerned. Especially for expatriate work permit (IKTA) issued by BKPMD.
In addition to the above approvals, the local government of the second level regions will issue regional permits such as: location permit, building construction permit, nuisance act permit, land title.
The procedure for Filling the Application for Approval of the Article of Association of a Limited Liability Company
Tax-payer Registration Number (Nomor Pokok Wajib Pajak/ NPWP) and the Taxable Entrepreneur Confirmation Number (NPPKP) Application Procedures
Customs Facilities Procedures
Limited Importer License Procedures (APIT)
Expatriate Work Permit Procedures
Visa Application Procedures
Location Permit Procedures
Building Construction Permit Procedures
Land Title Procedures
Nuisance Act Permit Procedures
Permanent Business License Procedures
INVESTMENT APPROVAL PROCEDURES ON CHANGES IN INVESTMENT PLAN
Investment Expansion Procedures
Investment Alterations Procedures
Once a foreign company (PMA) is approved by the Office of the State Minister/BPM-PBUMN or the Representative of the Government of the Republic of Indonesia or BKPMD, its file shall be maintained at the Office of the State Minister/BPM-PBUMN or BKPMD concerned, and will be ready to serve further changes as required by the investors concerned. It is like a “running file” of the project.
PMA companies having obtained investment approval may apply for alterations of the terms and conditions of the investment specified in the investment approval. PMA companies having started commercial production may apply for expanding the existing plan.
In principle, if the investment approval is granted by the Office of the State Minister/BPM-PBUMN or BKPMD, the application for approval of the changes in investment plan or investment expansion should be submitted to the Office of the State Minister/BPM-PBUMN, or to BKPMD respectively.
In the case of investment approval is granted by the representative of the Government of the Republic of Indonesia, the application for approval of changes in investment plan or investment expansion can be submitted either to the Office of the State Minister/BPM-PBUMN or BKPMD concerned.
Application Procedures for Modification of Foreign Investment Company Status into Domestic Investment Company
Application Procedures for Purchasing Share of the Domestic Investment Company and Non Foreign/ Domestic Investment Company Established by the Foreign Investment Company (PMA), Foreigner and Foreign Companies
Application Procedures for the Establishment of a Regional Representative Office
Investment Procedures in the Mining Sector Other Than Oil and Natural Gas
And more read ———–> Property law in Indonesia