As part of Indonesia’s ongoing reforms to improve its investment climate, foreign investors must now face a new criterion to obtain business licenses in the country. In addition to having the necessary paid-in capital, business licenses will now be issued based on the assessment of ‘
determined by the scale of hazards a business can potentially create.
This consist of:
- Identifying the relevant business activity;
- Assessing the hazard level;
- Assessing the potential occurrence of hazards;
- Determining the risk level and business scale rating; and
- Determining the type of business license.
Based on above risk analysis, the companies will be classified into one of the following risk-level types:
- Low-risk businesses;
- Medium-low risk businesses;
- Medium-high risk businesses; and
- High-risk businesses.
The lower the business risk, then the simpler the process to attain a business license. High risk-business activities may need approval from the central or regional government whereas low-risk activities will only need to obtain a business registration number.