Following the Job Creation or Omnibus Law in 2020, the Indonesian government continues to further nurture the investment climate in the country by issuing Government Regulation No. 5 of 2021 about Risk-Based Business Licensing. It aims to simplify the licensing process by grouping each business into the risk classification tier. That is why the Indonesian government has revised the old Online Single Submission (OSS) v1.1 to the new Online Single Submission Risk-Based Approach (OSS RBA) since July 2, 2021. This article will provide you with a short overview of the platform and the major changes in 2021.
What is Online Single Submission System?
The Online Single Submission (OSS) is a one-stop web-based business registry platform issuing permits, business and operational licenses. Business entities can also renew licenses or report any licensing problems via the platform. The objective of this platform is seamless business registrations without having to visit individual ministries and departments.
Businesses can access the platform after registering as a legal entity in Indonesia. To put it another way, you must first incorporate your company as a legal entity before applying for licenses with the platform. Your business must complete the Deed of Establishment process with Indonesia’s Ministry of Law and Human Rights.
Which businesses can use the OSS platform?
The platform is designed to be a single gateway for all profit-seeking enterprises, no matter if your business is:
– Individuals or group-owned
– Micro, small, medium, or large enterprises (MSMEs)
– Domestic, wholly, or partly foreign-owned
Major updates in 2021
The major functional update of the platform is its interfacing capabilities to other ministerial systems for additional permits. In the previous version, the system just mentioned the need for additional permit requirements but did not channel or route the user to the systems on the other side (ministries / autonomous bodies).
In order to achieve this, the new system categorizes the business activities of the company into four risk-based levels and based on the risk level channels the user to the corresponding agencies or ministries for subsequent processing.
Risk Level categories and additional permits and licenses
In the former system all business activities were given the same level of risk weightage where are in OSS RBA, each business activity index (KBLI) is categorized as:
Low Risk KBLI
To begin business operations, only an NIB (Business Identification Number) is required. This category includes businesses such as consulting, advertising, and trading. However, for trading, the relevant ministries may impose product-based registration requirements. For example, SNI (Standardization) registration requirements for certain importation products, BPOM (National Agency for Drug and Food Control) registration requirements for certain importation and retailing products, Ministry of Agriculture registration requirements for certain products, and so on.
Medium-low Risk KBLI
To begin business operations, not only an NIB but also a Standard Certificate are required. The Standard Certificate is an independent declaration of compliance with the standard requirements submitted via the OSS system. The standard certificate does not require any additional verification for this level.
Medium-high Risk KBLI
To begin business operations, an NIB and Standard Certificate are required, just as they are in medium-low risk. The notable difference is that the standard certificate must be verified further by a federal or regional agency or a government department before commercial operations can begin. Companies, on the other hand, can begin preparatory activities while the verification process is underway.
High Risk KBLI
To start a business in the High-Risk category, you’ll need not only an NIB and a standard certificate, but also a business license. Only after obtaining the necessary licenses, permits, or verifications from a federal or regional agency or government department can the business begin operations.
Practical Challenges faced now
While OSS RBA has the right vision of a comprehensive fully integrated business registry platform, the current capabilities of the system are far from perfection. There are issues- in migrating existing registrations, conflicting requirements compared to existing ministerial regulations, incomplete functional modules etc are typical of a newly introduced technical platform.
Conclusion
When the above functional and technical glitches are resolved, this platform will ensure a fully integrated business registry platform where users can complete full registration according to regulations imposed by all ministries and licensing agencies. This will certainly provide a single door to get all required licenses, which has always been the biggest challenge for businesses.
The benefits far outweigh the current challenges and the hope is that Indonesia will have a seamless business registry process, supported by OSS RBA. While OSS will offer the above benefits, it will also serve as a monitoring tool for ensuring compliance among businesses.
Should you require professional assistance to obtain your business licenses and stay compliant, Permitindo can assist you through the whole process. If you have any questions regarding the OSS, please contact us through anita@permitindo.com or simply fill in the form below. Our team will get back to you as soon as possible.
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