25 Nov 2015
NEW BKPM REGULATION ON INVESTMENT PRINCIPLE LICENSE
The Investment Coordinating Board (Badan Koordinasi Penanaman Modal or “BKPM”) has revoked Head of BKPM Regulation Number 5 of 2013 concerning Guidelines and Procedures for Investment Licenses and Non-Licenses as amended by Head of BKPM Regulation Number 12 of 2013. In its place, it has issued Head of BKPM Regulation Number 14 of 2015 concerning Guidelines and Procedures for Investment Principle License (“BKPM Regulation No. 14/2015”).
We highlight the following provisions of the new BKPM Regulation No. 14/2015:
The provisions regarding investment value are in general the same as the previous provisions, which is more than 10 billion Rupiah total investment not including land and building. The 10 billion Rupiah total investment requirement applies
Investment Value for Project Expansions
The minimum issued and paid-up capital is 2,5 billion Rupiah and the minimum shareholder participation is 10 million Rupiah.
PMA (Foreign Investment) Companies which have obtained their principle license will be required to increase their paid-up capital to minimum 2,5 billion Rupiah when applying for (a) an extension of the project completion period or (b) an expansion principle license, if their current paid-up capital is less than 2,5 billion Rupiah.
The validity period of the Principle License is one to five years, depending on characteristic of the line of business. PMA Companies whose Project Completion Period has expired are not qualified to submit applications for other licenses and non-licenses.
The new BKPM Regulation No. 14/2015 allows the sale of the Indonesian shareholding being the result of the divestment requirement compliance to an Indonesian or foreign citizen or Indonesian or foreign business entity after obtaining the approval of the Minister of Law and Human Rights.
Projects which have received an Investment License which are located in certain BKPM designated industrial areas may start their construction without having to first obtaining (a) Building Construction Permit and (b) Environmental License. These licenses may be applied for while the construction is in progress.
BKPM Regulation No. 14/2015 takes effect as follows: