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The Indonesian government has issued a new Regulation 13, which is intended to simplify the process of obtaining investment licenses and investment facilities procedures. Below we consider some of the key changes brought about by Regulation 13 and the implications for foreign investors.

Authors: Matthew Gorman Kendra MacDonald Arran Kandola

Introduction

On 4 December 2017, the Indonesian Investment Coordinating Board (Badan Koordinasi Penanaman Modal or BKPM) issued Regulation 13 on Guidelines and Procedures for the Implementation of Capital Investment Licensing and Facilities (Regulation 13).

Prior to the introduction of Regulation 13, all investors wishing to establish a new company were required to follow a two-stage process that involved: (i) obtaining initial permission by way of an in-principle licence from BKPM; and (ii) subsequently making a separate application to the relevant government ministries for the applicable business permits. This would then result in the granting of an investment licence by BKPM. So, for example, a company proposing to engage in mining would require an in-principle licence from BKPM and a mining business license, and various other ancillary documents, from the regent/mayor or governor of a province, depending on the scale and focus of the proposed operations.