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Economy

Indonesia starts online business registration with one-hour permit

Deregulation move aimed at spurring investment and improving enterprise environment

The administration of Indonesian President Joko Widodo has launched the Online Single Submission system, enabling business permits to be issued in less than an hour.   © Reuters

JAKARTA -- The Indonesian government on Monday launched a new online system for business registration to cut the country's notoriously lengthy bureaucratic procedures in a bid to drive more investment from both domestic and foreign sources.

The Online Single Submission, accessible through the website oss.go.id, allows individuals or companies wishing to start or expand a business in Indonesia to obtain several major permits within an hour of submitting the required data, officials said.

This is the latest move by the administration of President Joko Widodo to make Indonesia more friendly to business and investment as the country's leader seeks to fund his ambitious infrastructure push and boost the economy. Monday's announcement follows the introduction of a series of deregulatory measures since the president took office in October 2014.

"The OSS ... is an effort by the government to simplify business licensing and create an integrated, quick, affordable and reassuring model for licensing services," the coordinating minister for the economy, Darmin Nasution, said during Monday's launch ceremony.

Southeast Asia's largest economy has been notorious for its complicated and lengthy procedures for starting a business. Investors often have to visit dozens of government offices to obtain hundreds of permits and other documents -- a process that often takes years -- before they can get started. This has driven many potential investors away, putting the country at a distinct disadvantage compared to Southeast Asian peers in luring the foreign investment that is essential to sustaining economic growth.

The Widodo administration has launched a number of moves to address the problem, including the launch of PTSP, or One-Stop Integrated Service, in 2015 -- which allows investors to visit the Investment Coordinating Board (BKPM) offices and meet officers from more than 20 ministries and other state institutions for business registration purposes.

The Online Single Submission allows some of the processes to be completed online. Applicants can immediately obtain  a location permit, environmental permit and building permit -- by making a commitment to completing more formal procedures.

After they are completed, the business permit and the operational/commercial permit will be activated. The policy is intended to allow investors to immediately begin preparations to run their business while awaiting formal documents. A special taskforce has been formed to oversee implementation and ensure applications are handled properly.

The previous series of deregulatory reforms have improved Indonesia's position in the World Bank's ease of doing business rankings -- moving from 109th in 2016, to 91st in 2017 and 72nd in 2018. It currently takes an average of 22 days to start a business in Jakarta, as opposed to 8.5 days in the ranking's best performer New Zealand, according to the bank's 2018 report.

Indonesia, however, still lags far behind some of its neighbors. Singapore, Malaysia, Thailand and Vietnam are ranked 2nd, 24th, 26th and 68th, respectively, in the latest rankings.

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