Thursday, 14 August 2014


The complexity of political uncertainty ongoing in Indonesia makes most parties considered that the pace of development in Indonesia is now in the hands of employers, including the investment issues. Currently, the national employers’ ability to survive and continue to grow even in the midst of the national problems is believed to make foreign investors increasingly interested in entering Indonesia. Even so, there are many problems is believed to make foreign investors increasingly interested and obstacles that must be resolved by the government. One of them is licensing issue, which is still the biggest obstacles for the business to develop their business.

The government admitted that the difficulty in managing licensing process in Indonesia is an opportunity for irresponsible people to seek personal gain. The many charges or levies in the regions are also one factor that hampers the flow of investments into the regions. In fact, at this time not a few regional heads who charge retributions that it makes investors reluctant to invest. Not only retributions, the local government, which inhibits investment. The central government asked the regional heads to accelerate business and investment licenses.

Licensing issues were not only found in the regions, but also in the government administration centre. Therefore, the Ministry of Industry is looking for ways to trim to process of licensing area. Head of legal Department of the Ministry of Industry, Prayono, plan will be applicable for easing the establishment of an integrated plant or for making similar products. So far, entrepreneurs who want to build a factory must apply for a new license, even if it is in the same industrial area. “Simply put, one location one license,” said Prayono.

Meanwhile, Minister of Industry Regulation No. 05/2014 on Procedures for Granting Business License (IU) and Expansion License (IP) for industrial estates is in the hands of the regional heads or the ministers, depending on the location. However, he said, the regulation will be changed in the Draft of Government Regulation (RPP) on Industrial Business Licensing. It is said that this is the implementation of Law No. 3/2014 concerning Industry. In the future, a company in an industrial area that previously had to have five licenses for five locations, may only have one license on condition that the factory built should be integrated or have similar product.

Meanwhile, Chairman of the Indonesian employers Association (Apindo), Sofyan Wanandi, said that the license can be realized. Only, he was not sure about its effectiveness because each party has an interest. On the other hand, the one-roof rule so far was the authority of the investment Coordinating Board (BKPM), but was not effective. If it is to be applied, the government should appoint a separate authority to decide permission. By doing so, it will not overlap.

Sofyan pointed out that sometimes employers have obtained business license from the central government, but in the regions they are not able to obtain license. Also related to land acquisition, tax holiday and so on. Not to mention infrastructure issue that has not been solved. If it is not immediately addressed, Sofyan continued, investment funds will flow to other Southeast Asian countries, such as Vietnam, Malaysia and so on.

Sofyan sees that the future of the global economy leads to Asia. According to him, Europe and America were in the past. In the future, Asia will lead the problem is which country will be the destination of investors. He warned that if Indonesia did not immediately improve itself, investors will flee to other countries.(E)

Business New - July 18, 2014

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