RISK BASED APPROACH: NEW REGIME FOR BUSINESS LICENSING IN INDONESIA

Author: Ichsan Montang

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Publisher: Nagashima Ohno & Tsunematsu

Journal / Book: NO&T Asia Legal Review No.35 (May, 2021)

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*Please note that this newsletter is for informational purposes only and does not constitute legal advice. In addition, it is based on information as of its date of publication and does not reflect information after such date. In particular, please also note that preliminary reports in this newsletter may differ from current interpretations and practice depending on the nature of the report.

Introduction
In furtherance to the Law No. 11 of 2020 on Job Creation (“Omnibus Law”), the government introduced a new licensing system for companies in Indonesia, known as risk-based licensing through the Government Regulation No. 5 of 2021 on the Implementation of Risk-Based Licensing Service (“GR 5/2021”). Although this regulation has come into force on 2 February 2021, GR 5/2021 explicitly stipulates that the implementation of this new system will be effective on 2 June 2021. During the period between 2 February 2021 and 2 June 2021, the BKPM and other government institutions would actively communicate with businesses, both domestic and foreign investment companies.

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