04
Aug2021

Circullar Letter Concerning the Transition of Risk-Based Business License Through OSS System

Early in 2021 the Indonesian Government introduced the new concept of risk-based business license. This concept has only been applied in Indonesia since the enactment of Law No. 11 of 2020 concerning Job Creation (“Job Creation Law”), of which implementation is regulated through Government Regulation No. 5 of 2021 concerning the Implementation of Risk-Based Business License (“GR 5/2021”).

As a brief description, risk-based business license is a business license based on the level of risk of business activities. The level of risk will determine the type of business license that must be owned by the businessman. Based on GR 5/2021, there are at least 4 (four) risk levels, namely:

No. Risk Level Required Document
1. low Business Identification Number (“NIB”).
2. Medium-low NIB and Standard Certificate.
3. Medium-high NIB and Standard Certificate.
4. high NIB and License.

 

Further information concerning the concept of risk-based business license is included in our article “Breakthrough In The Concept Of Risk-Based Business Licenses“.

In connection to the application of this concept, surely there is a transition period of change that requires adjustment. On May 03 2021, the Main Secretary of the Ministry of Investment / BKPM RI issued Circular Letter Number 12 of 2021 concerning the Transition Implementation of Business License to a Risk-Business License Through OSS System (“CL 12/2021”).

The purpose of the issuance of CL 12/2021 is to provide guidance for Businessman on the mechanism of the transition implementation of Business License to Risk-Business License Through OSS System so that the implementation of the transition process can be carried out efficiently and effectively.

As for the things that need to be Businessman’s concern related to the transition implementation of Business License to Risk-Business License through OSS System are detailed as follows:

  1. Application for business license is still implemented through the OSS System until the implementation of Risk-Based Business License through the OSS System based on GR 5/2021 implemented, namely on June 2, 2021. The process of switching and migrating the system (cut off) will have an impact on the OSS System, which cannot be accessed on June 1, 2021.
  2. Businessman are required to be able to accelerate the process of fulfilling commitments for business license that have not been effective and submitted to the OSS System no later than May 25, 2021, so that effective Business Licenses can be issued by the OSS System before May 31, 2021.
  3. For the fulfillment of commitments and applications for new business license by Businessman submitted to the OSS System after May 25 2021 and business licenses (effective business licenses) which cannot be issued by the OSS System until May 31, 2021, those licenses then will be processed based on Risk-Based Business License in accordance with the provisions stipulated under GR 5/2021 and BKPM Regulation No. 4 of 2021 concerning Guidelines and Procedures for Risk-Based Business License and Investment Facilities (“BKPM Reg. 4/2021”).

 

DISCLAIMER:

Any information contained in this Article is provided for informational purposes only and should not be construed as legal advice on any subject matter.  You should not act or refrain from acting on the basis of any content included in this Legal Update without seeking legal or other professional advice.  This document is copyright protected. No part of this document may be disclosed, distributed, reproduced or transmitted in any form or by any means, including photocopying and recording or stored in retrieval system of any nature without the prior written consent of SIP Law Firm.

 

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