BKPM to Handle All Licensing in Indonesia

BKPM to Handle All Licensing in Indonesia
North Jakarta port Image by Tom Fisk on Pexels
North Jakarta port Image by Tom Fisk on Pexels

In a bold move to attract more foreign investors to Indonesia and improve Indonesia’s ranking in the World Bank’s Ease of Doing Business (EODB) index, President Jokowi announced last week that all licensing procedure formalities will now be centralized through the Indonesia’s Investment Coordinating Board (BKPM).

Indonesia currently ranks at #73 out of 190 economies listed in the index. This is still a way behind key regional competitors like Malaysia (#12) and Thailand (#21), but it’s the start of a journey to reach a rank between #40 and #50 by 2021.

What investors have been asking for

Even if this goal was successfully achieved, this would likely mean Indonesia will still lag behind Malaysia and Thailand it is being seen as a positive move in the right direction, especially as it pertains to attracting more foreign investment.

According to Bloomberg, Jokowi “will introduce sweeping changes to labour rules by the end of the year and open up more sectors of the economy to foreign investment, delivering on some of the major reforms investors have been demanding.”

Improving OSS

Cabinet Secretary Pramono Anung is being quoted by local news wires as suggesting at least 40-ministerial regulations deemed to be hampering investment will be removed as early as this December.

Head of BKPM, Bahlil Lahadalia, believes the government’s current Online Single Submission (OSS) system is not as effective as it could be because of what The Jakarta Post is calling ‘overlapping authority across ministries and institutions.’

The OSS was introduced to cut red tape and speed up business licensing processes, but it has proved to be largely ineffective because of the country’s infamous bureaucratic procedures.

Impact on Real Estate

Bahlil believes things will change for the better now that Jokowi has announced all licensing processes are to be centralized at BKPM.

Terje Nilsen from Seven Stones Indonesia also believes this is a positive step in the right direction, especially as it will affect the country’s real estate industry. “Terminating regulations will certainly help to speed up and attract both domestic and international investors. The need for IMB’s and an AMDAL*, for example, will be a lot easier and could possibly even disappear,” he said.

Nilsen suggested “it will also ease up and help those investors with an appetite for tourism investments in the 10 new Bali’s, and in particular for foreigners wanting to get in early in these areas.”

Note: *IMB is an acronym for Izin Mendirikan Bangunan, or Building Permit. And AMDAL is an acronym for Analisis Mengenai Dampak Lingkungan or Environmental Impact Analysis, both of which are necessary if you’re building in Indonesia.

Sources: The Jakarta Post, Bloomberg, Reuters, Gapura Bali

Adapted from an original post in Gapura Bali

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Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

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Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.