Indonesia Moves to Cut Business Licensing Time

The Jakarta Globe, Camelia Pasandaran

Attendees participate in a long-distance IFC conference earlier this year in Jakarta. (Antara Photo/Andika Wahyu)

Four ministries and the Indonesia National Investment Coordinating Board (BKPM) have signed a joint regulation to slash the time needed to get a business license from 60 to 17 days.

Representatives of the Home Affairs, Trade, Manpower, and Justice and Human Rights Ministries announced the move on Wednesday. The regulation sets time limits for issuing each of the permits required to obtain a business license.

Vice President Boediono said the move was aimed at raising Indonesia’s rank with the International Finance Corporation (IFC), which issues regular surveys on the ease of doing business in various countries.

“Indonesia has been left far behind by other countries in the same region in terms of the time needed to issue a business license,” Boediono said. “We rank 161st with 60 days needed to issue it, while Thailand, with only 32 days, ranks 12th.”

It takes only three days to get a license in the Philippines and 11 days in Malaysia.

“The rank influences foreign investors,” said Boediono.

Home Affairs Minister Gamawan Fauzi also touted the government’s push to open so-called One Door Integrated Service offices across the nation, which are designed to give would-be businesspeople a single place to go to complete licensing processes involving multiple ministries.

“Last month there were only 299 offices, but we have raised the number to 314,” said Gamawan. He added that Batam would debut an electronic permitting service in January.

Gamawan said the government hoped to raise Indonesia’s rank to somewhere in the 50’s in the IFC’s international survey next year.

“By 2014, we are targeting Indonesia to be in the top 20,” he said.