The Indonesian Capital Investment Coordinating Board ("BKPM") just posted an announcement on its website in relation to the term of principle licenses and business licenses. The announcement was said to be effective as of 30th September 2016.
Below is a summary of the announcement. Please click here for the Indonesian version of the announcement.
A. Applications for Principle License Amendment and Business License
- Article 62(2) of Head of BKPM Regulation No. 14 of 2015 on Guidelines and Procedures for Capital Investment Principle Licenses (as amended) ("BKPM Regulation 14/2015") requires companies that have obtained a principle license before the promulgation of BKPM Regulation 14/2015, where that principle license has expired, to apply for:
- an amendment of principle license as mentioned in Article 23 of BKPM Regulation 14/2015;
- an extension of project completion period as mentioned in Article 24 of BKPM Regulation 14/2015; or
- a business license as mentioned in Article 83 of Head of BKPM Regulation No. 15 of 2015 on Guidelines and Procedures for Licensing and Non-Licensing Matters of Capital Investment ("BKPM Regulation 15/2015");
to BKPM within 1 year after the promulgation date of BKPM Regulation 14/2015 (i.e. within 1 year after 8th October 2015).
- The announcement says that:
- Applications for an amendment of a principle license will only be accepted by BKPM at the latest on 8th October 2016 at 12 noon Western Indonesian Time (evidenced by receipt from BKPM).
- Applications for business license will only be accepted by BKPM at the latest on 26th October 2016 at 12 noon Western Indonesian Time (evidenced by receipt from BKPM).
- Applications submitted after the deadlines in items (a) and (b) above will not be processed by BKPM.
- The requirements in items (a) and (b) are exempted for companies that have realised their investment, evidenced by a decree on the grant of import duty exemptions for the import of capital goods and/or import declaration (PIB).
B. Business Licenses with a 1 Year Period
- Companies that have obtained a business license with a 1 year period, but still have not yet fulfilled the requirement as a company with large-scale qualification (under current BKPM unwritten policy, this is evidenced by having issued and paid capital of more than 10,000,000,000 IDR), can apply for an extension of the term of the business license for a maximum of 1 year (and cannot be renewed) before the expiry of their business license.
- Companies that have obtained a business license with a 1 year period where the term has expired:
- cannot process an application to extend the term of the business license at BKPM; but
- can apply for a permanent business license at BKPM if they have fulfilled the requirement as a company with large-scale qualification (under current BKPM unwritten policy, this is evidenced by having issued and paid capital of more than 10,000,000,000 IDR) at the latest 1 year after the expiry of the business license.
- If the deadlines above have lapsed and the companies still cannot fulfill the requirement as a company with large-scale qualification (under current BKPM unwritten policy, this is evidenced by having issued and paid capital of more than 10,000,000,000 IDR), the business license would be proposed to be revoked by BKPM.
C. Companies that have not complied with items A and B above, but want to continue to operate, can apply for a new principle license by following the prevailing requirements.
In light of the above deadlines set out by BKPM above, we would suggest that companies that have received BKPM's approval start checking on the terms of their BKPM approvals.
Hadiputranto, Hadinoto & Partners, Member of Baker & McKenzie International - 11th October 2016
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