19/02/2010
NEW INVESTMENT PROCEDURES
The Investment Coordinating Board (the “BKPM”) has issued on December 23, 2009 a new regulation concerning Guidance and Procedures for Investment Application (the “Regulation”). The Regulation, Number 12 of 2009, was issued as a package of four BKPM new regulations which also included Regulation No. 14 of 2009 regarding Electronic Information Services and Licensing for Investment (elaborated in a separate article); Regulation No. 13 of 2009 regarding Guidance for and Procedures of Investment Control; and Regulation No. 11 of 2009 regarding One Stop Service.
The Regulation also serves as the implementation regulation for two Presidential Regulations, respectively regarding BKPM and the investment One Stop Service for investment. It revokes the previous Regulation No. 57/SK/2004 on the same subject matter.
The One Stop Service is a fast tract service for the processing of an investment application with the BKPM, for which the BKPM receives a delegation of authority from the technical minister / the head of non-department government institution in charge of the respective business field.
There are at present four types of investment service channels: (1) investment services processed by the central government administered by the BKPM; (2) investment services processed by the provincial governments administered by the provincial instrumentalities upon delegation by the governors; (3) investment services processed by the district/city governments administered by the district/city instrumentalities upon delegation by the regents/mayors; and (4) investment services provided in special economic zones.
The investment services administered by the BKPM are specifically for cross-provincial investments, investments in non-renewable natural resources, high priority industries, cross-provincial transportation, defense and security, investments made by foreign governments under bilateral agreements, and other investments in fields that are controlled by the central government.
An Investment process begins with an application for a Registration to the BKPM, the respective province, or district/city. The Registration statement is issued within 1 (one) day upon the receipt of the application. The Registration serves as a preliminary approval and a reference in the preparation of the deed of establishment and the processing of the licensing or non-licensing formalities.
Foreign investment companies with a limited liability company status are eligible for fiscal facilities but must first obtain a Principle License. This requires no Registration process. Business fields without fiscal facilities are not required to apply for a Principle License.
Principle License applications are now processed in the one-stop service system that promises the issue of the license at the latest 3 (three) days upon the receipt of the application. A Principle License acts as approval for fiscal facilities and temporary license until a Business license is obtained. Investment companies that intend to perform commercial/production activities must file an application for a Business License to the BKPM or the respective province or district/city. The license will be issued at the latest 7 (seven) days upon the receipt of the application. A Business License is valid to the extend the company concerned still performs its business activities.
The regulation is effective as of January 2, 2009.