Business Licensing for Business Actors in the Nusantara Capital City
By Yehezkiel Obey Yoneda / 27 June 2023
Key Points
- The IKN Authority issues the business licenses in IKN and Partner Regions through the OSS system, which consists of basic business licensing requirements, and sector-specific business licensing.
- Business actors are not required to attach the confirmation of taxpayer status, and there are no restrictions on foreign capital ownership in specific business fields.
- Business actors must submit investment activity reports through the OSS system after obtaining business licensing approval from the IKN Authority.
- Business actors must conduct a partnerships with Micro, Small, and Medium Enterprises (MSME) or cooperatives.
Background
The Capital City of Nusantara (“IKN”) is formed under the Law No. 3 of 2022 on the State Capital, which has objective of becoming a sustainable city in the world, driving the Indonesian economy in the future, and as a symbol of national identity. Therefore, the government determines special policy to encourage the participation of business actors to accelerate the development of IKN.
Business licensing in IKN and other regions in Kalimantan Island for the development of a superhub area (“Partner Regions”) is regulated under the Government Regulation No. 12 of 2023 (“GR 12/2023”).
Business Licensing Requirements
Business licenses in the IKN and Partner Regions are issued by the IKN Authority through the OSS system, which consist of basic business licensing requirements and sector-specific business licensing, as follows:
1. Basic business licensing requirements, consist of the following:- Suitability of spatial utilization activities (“KKPR”), which will be issued if the designation of the business location is in accordance with the spatial detailed plan of IKN (“IKN RDTR”). In the absence of IKN RDTR, the KKPR will be issued if it is in accordance with the spatial planning of the national strategic area of IKN;
- Environmental approval, which is issued in accordance with the Environmental Impact Analysis (Amdal) of the IKN area;
- The building approval (“PBG”) and certificate of feasible function (“SLF”), will be issued if the business actors have obtained the KKPR and environmental approval. In parallel with the submission of PBG, the business actors may conduct the initial construction referring to the construction drawings submitted to the IKN Authority.
- marine and fishery;
- agriculture;
- environmental and forestry;
- energy and mineral resources;
- nuclear;
- industry;
- trading;
- public works and housing;
- transportation;
- health, medicine, and food;
- education and culture;
- tourism;
- religious;
- postal, telecommunications, broadcasting, as well as electronic systems and transactions;
- defense and security;
- employment;
- finance; and
- other prioritized sectors determined by the Head of the IKN Authority.
As a form of ease of doing business, the business actors are not required to attach the confirmation of taxpayer status, and there are no restrictions on foreign capital ownership in specific business fields. Additionally, the IKN Authority does not impose fees for issuing PBG and SLF until a certain period.
However, there are requirements regarding partnerships with Micro, Small, and Medium Enterprises (MSME) or cooperatives.
Verification of Business Licensing Application
The IKN Authority will verify the submission of the basic requirements for business licensing and/or sector-specific business licensing, whereby in performing such verification, the IKN Authority may assign accredited institutions or professional experts.
The verification result serves as the basis for issuing business licenses by the IKN Authority. Business actors are required to submit reports on investment activities through the OSS system.
Key Contacts
Ivor I. Pasaribu
