This is a combined investment/immigration subject. If the moderator finds it fit to put it somewhere else, feel free to do so.
There was some optimism from the Government after the adoption of the Omnibus Law concerning the easing investment procedures and attractiveness of Indonesia as an FDI destination. However, the filtering down of the law through the Government, Ministries, and Government Agencies and their bylaws paints a completely different picture.
Instead, new barriers and obstacles, and layers of red tape are added. Here are the most important examples.
Foreign company formation:
Presidential Regulations no 10/2021 and 5/2021 repeat the previous condition that the foreign investment through a PMA has to be 10 billion Rp. Investment is not paid in capital in shares only, but loans as well. So, until now, you could combine i.e. 2.5 billion shareholder capital with a 7.5 billion Rp loan=10 billion.
But, BKPM Regulation no 4/2021, valid from June 2nd, requires that foreign companies have minimum paid-in capital (shareholder capital) of 10 billion Rp, almost 700.000 USD. This is probably the highest amount in the world (Vietnam is 10.000 USD, Thailand I think 60.000 USD). All businesses that have valid (so-called "effective",permanent) licenses do not need to follow the new regulation, but the ones that are in the procedure and not finalized are in limbo.
The New Licensing system through OSS:
-"Risk-Based Licencing", valid from July 2nd tends to be totally comprehensive, done through the OSS system but looks even more complicated than before.
-All companies are reclassified, so the one <1.000.000.000 Rp total capital are Micro, from 1.000.0000.000-5.000.000.000 are Small, from 5.000.000.000-10.000.000.000 are Medium, and above 10.000.000.000 are large scale. There is a whole new system for assisting small and micro companies (regional supervising boards) but it remains to be seen would this additional bureaucracy really help.
Immigration:
PP 48/2021 that amends PP31/2013, gives 2 important changes. One is that KITAS can be issued for a maximum of 5 years(instead of the previous 2) and that can be extended up to a maximum of 10 years.
Companies do not need to be guarantors for their shareholders(investors). However, the regulation mentions that the applicants for this investor visa, ITAS, or KITAP have to deposit money as a bond (Jaminan Keimigrasian) to cover the deportation costs. The amount of this guarantee is unknown but for sure it will be some nice, fat amount.
There was some optimism from the Government after the adoption of the Omnibus Law concerning the easing investment procedures and attractiveness of Indonesia as an FDI destination. However, the filtering down of the law through the Government, Ministries, and Government Agencies and their bylaws paints a completely different picture.
Instead, new barriers and obstacles, and layers of red tape are added. Here are the most important examples.
Foreign company formation:
Presidential Regulations no 10/2021 and 5/2021 repeat the previous condition that the foreign investment through a PMA has to be 10 billion Rp. Investment is not paid in capital in shares only, but loans as well. So, until now, you could combine i.e. 2.5 billion shareholder capital with a 7.5 billion Rp loan=10 billion.
But, BKPM Regulation no 4/2021, valid from June 2nd, requires that foreign companies have minimum paid-in capital (shareholder capital) of 10 billion Rp, almost 700.000 USD. This is probably the highest amount in the world (Vietnam is 10.000 USD, Thailand I think 60.000 USD). All businesses that have valid (so-called "effective",permanent) licenses do not need to follow the new regulation, but the ones that are in the procedure and not finalized are in limbo.
The New Licensing system through OSS:
-"Risk-Based Licencing", valid from July 2nd tends to be totally comprehensive, done through the OSS system but looks even more complicated than before.
-All companies are reclassified, so the one <1.000.000.000 Rp total capital are Micro, from 1.000.0000.000-5.000.000.000 are Small, from 5.000.000.000-10.000.000.000 are Medium, and above 10.000.000.000 are large scale. There is a whole new system for assisting small and micro companies (regional supervising boards) but it remains to be seen would this additional bureaucracy really help.
Immigration:
PP 48/2021 that amends PP31/2013, gives 2 important changes. One is that KITAS can be issued for a maximum of 5 years(instead of the previous 2) and that can be extended up to a maximum of 10 years.
Companies do not need to be guarantors for their shareholders(investors). However, the regulation mentions that the applicants for this investor visa, ITAS, or KITAP have to deposit money as a bond (Jaminan Keimigrasian) to cover the deportation costs. The amount of this guarantee is unknown but for sure it will be some nice, fat amount.
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