OSS RBA: A new guideline for business registration in Indonesia

24 December 2023
Since the enactment of the Job Creation Law on November 2, 2020, Indonesia’s government has changed the business licensing procedure to a risk-based licensing approach.

This is carried out through one platform, the Online Single Submission (Integrated Online Licensing, or OSS). In accordance with Government Regulation Number 5 of 2021 concerning the implementation of risk-based business licensing, this electronic system aims to simplify and speed up the business licensing process so investors will find it easier to register their business in Indonesia.

Online Single Submission Risk-Based (OSS-RBA) replaces OSS 1.1. Businesses only need to take care of licensing according to the level of risk of their business activities. For example, low-risk business activities only require a Business Identification Number (NIB), while high-risk business activities require an NIB as well as a business licence, such as a ministry, institution, regional or government licence.

OSS-RBA is a one-door system. Therefore, businesses do not need to visit many places to apply for permits. The OSS-RBA system has been integrated with the Ministry of Home Affairs (Dukcapil), Ministry of Finance (tax service office), Ministry of Law and Human Rights (company information), and Ministry of Agrarian and Spatial Planning (detailed spatial planning) for the establishment of business activities. OSS is also integrated with the One Stop Integrated Service (PTSP) of the Technical Ministry and Regional Institutions for business permits, location permits, and environmental permits, while the registration process at OSS and business development is managed by the Ministry of Investment/Investment Coordinating Board (BKPM).

BKPM will provide fiscal and non-fiscal incentives for investors who invest in priority business sectors. Fiscal incentives consist of income tax incentives (tax allowance), reduction of corporate income tax (tax holiday), reduction of net income in the context of investment as well as reduction of gross income in the context of certain activities (investment allowance). Furthermore, investors will receive customs incentives in the form of exemption from import duties on machinery and goods and materials for industrial construction or development.

Meanwhile, non-fiscal incentives include ease of business licensing, provision of supporting infrastructure, a guarantee of energy availability, guaranteed availability of raw materials, immigration, and employment incentives, as well as other facilities in accordance with the provisions of laws and regulations. In addition, special business fields or partnerships with cooperatives (Koperasi) and small- and medium-sized enterprises (SMEs) are also considered.

This is a revised version of an article that was originally published on March 1, 2022.