Your guide to Indonesia’s Online Single Submission.
Introduced on 9 July 2018, the Online Single Submission or OSS platform has been the main place where businesses start their incorporation process in Indonesia.
It followed President Joko Widodo’s wish to “...make licensing bureaucracy at the central and regional levels easier, faster, and also more integrated.” This was in hopes to push Indonesia’s ranking on the World Bank’s Ease of Doing Business Index upwards.
Inevitably, this is why aspiring new companies need to understand how the OSS system works. Here’s everything you need to know about Indonesia’s new OSS platform.
- What is the OSS platform?
- What can businesses get using the OSS platform?
- Can businesses use the platform to get other licenses?
- Which businesses can use the OSS platform?
- When can businesses use the OSS?
- How do businesses register in the OSS?
- What’s the next step?
History of doing business in Indonesia
In the past, it would take 10 weeks to just get your company registered as a PT PMA. Thereafter, there was the need to go to many different locations and ministries to file and obtain approval for various documents and licenses. This whole process would take another two to six months.
In the past, President Jokowi was a businessman, or Pelaku Usaha in Bahasa, himself. So, he understood the importance of private investment and that the government is not the one who makes profits, it was the businesses themselves. The excessive bureaucracy and red tape involved made doing business in Indonesia inefficient. This also greatly inhibited its economic and social development.
As a result, in hopes to boost both domestic and foreign direct investment and eliminate red tape in business licensing, or Perizinan Berusaha, the Indonesian government introduced the Online Single Submission licensing system to reverse the symptoms in 2018.
What is the Online Single Submission System?
The Online Single Submission (OSS) is the Indonesian government’s web-based platform that aims to simplify business licensing in Indonesia. With this platform, the process to get a business license, or Izin Usaha, will only take a few hours, where it previously took several days.
The Indonesian government launched the OSS on 9 July 2018. Since then, the platform has been available for new businesses to use when getting licenses. As of 2019, the Indonesia Investment Coordinating Board (BKPM) is in charge of running the platform.
The OSS is now the one-stop platform for businesses to obtain most permits, business licenses, and operational permits. This is where businesses will also renew licenses or report any licensing problems. As such, it is paramount that businesses know the process and documents to prepare so as to use the platform effectively.
However, there might be some cases in some districts or provinces in Indonesia which still require the person to obtain the licenses manually.
Now, the registration of your business would only take one to two weeks, if you do not have any extra licenses to obtain.
What can businesses get using the OSS platform?
The OSS allows businesses to take care of several commercial and operational licenses in one place. Primarily, companies can get their Business Registration Number (NIB) in the platform, which acts as their:
- Import license (previously API-U),
- Customs Identification Number (previously NIK),
- Business registry number (previously TDP), and
- Automatically registers your company with the government’s Health and Social Security System (BPJS Kesehatan and BPJS Ketenagakerjaan).
Can businesses use the platform to get other licenses?
Depending on your chosen industry, you can use the OSS to apply or renew other business licenses too. Specifically, other items that you could get with the platform include:
- Personal or company tax ID (NPWP),
- Approval for foreign employment plans (RPTKA),
- Documentation for the government’s Health and Social Security,
- Fiscal incentives such as tax allowances or tax holidays, if applicable, and
- Commercial licenses.
Which businesses can use the OSS platform?
The platform is available for all profit-seeking enterprises, no matter if your business is:
- Individuals or group-owned
- Micro, small, medium, or large enterprises
- Founded before or after the launch of the OSS
- Domestic, wholly, or partly foreign-owned
However, businesses that are in the financial, mining, and oil and gas sectors are exceptions to this platform.
When can businesses use the OSS?
Most businesses can only use the OSS after registering as a legal entity to the Indonesian government. This is because this platform is only for getting licenses, not incorporating a legal entity.
In other words, you need to go through the process of incorporating your company as a legal entity before getting licenses with the OSS. Specifically, your company has to finish getting the Deed of Establishment from Indonesia’s Ministry of Law and Human Rights.
How do businesses register in the OSS?
As mentioned, businesses first need to get approval from Indonesia’s Ministry of Law and Human Rights through a Deed of Establishment.
Then, businesses can register in the OSS system by entering the Single Identity Number (NIK) of the company’s director or person in charge. If they don’t have a Single Identity Number, they can get one by submitting their passport number.
However, if you get a consultant, service provider, or notary to do this process, they still need to submit your company’s data.
After that, the system will send you confirmation emails with your OSS account’s user ID and password. Thereafter, you can log in and fill in the necessary data to obtain the Business Registration Number (NIB).
*According to Government Regulation 5/2021, it states that business licensing applications will be processed based on the Risk-Based Business Licensing from 2 June 2021 onwards.Read more about the risk-based approach system here: Indonesia’s Omnibus Law and Effects on Foreign Investors in 2021
What’s the next step?
Once you have your account, you’re all set!
Once again, you can use the Online Single Submission system to apply or renew any licenses that you may need, shortening the process and hassle of paperwork.
As mentioned earlier, this platform helps considerably in making it easier to do business in Indonesia. However, while the OSS does shorten the time it takes to register a business and obtain licenses, it still needs a bit of administrative effort.
In other words, it can still be tedious to input all the correct data. However, don’t worry; experienced professionals like Greenhouse’s network of service providers can help do the process on your behalf, making sure the information is accurate.
Find out more about how we can help you find consultants and service providers who can help you with business processes like the OSS system in Indonesia.
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