BP Batam is the first province to adopt the three-hour licensing system to boost investment outside the Investment Coordinating Board (BKPM).
Batam has been experiencing investment slowdown, unlike other trade areas in the Asia Pacific for the last 10 years. That’s why the newly appointed management of the Batam Free Trade Zone Authority (BP Batam) has come up with a breakthrough by preparing the i23 J investment system—an investment licensing service that promises businesspeople and investors business permits in three hours.
BP Batam general services deputy chairman Gusmardi Bustami said the establishment of the system was motivated by the fact that the island had been experiencing slowdown for the last 10 years.
“We see that in the last 10 to 15 years, development in Batam has been slowdown, whereas the same cannot be said about other free trade areas, such as in Penang and Johor Bahru in Malaysia, or even in Vietnam and, soon, Myanmar,” he told The Jakarta Post in an interview recently.
“We also are falling behind Shenzhen, China. Our study reveals one factor that has been affecting the condition is the licensing sector; people are reluctant to invest in an area not only because of security factors but also due to troublesome licensing procedures. Most complaints from investors are also about licensing, which takes one to two years to complete,” said Gusmardi, who holds several key positions at the Trade Ministry, one of which is director general of international trade cooperation.
Gusmardi added that the problem was due to the many requirements investors needed to meet.
“We at BP Batam must simplify licensing procedures so that investors once again see Batam as a good place for investment in the Asia-Pacific region,” he stated.
BP Batam was also motivated by remarks made by President Joko “Jokowi” Widodo, in which he challenged regional heads at an event organized by the Indonesian Regency Administrations Association (Apkasi) in May.
“I read about the challenge from the President on an airplane. He said regional heads must be able to come up with policies to boost investment, and that if the BKPM can issue eight permits in three hours, the regions must also be able to do so as well. The i23J is the first system set up in regionally or at the provincial level,” Gusmardi explained.
Photo courtesy of Batam Free Trade Zone Authority (BP Batam)(-/-)
The system is slated to be launched on Sep.1 at the Sumatra Promotion Center (SPC), Batam. The service is combined with one-stop integrated service (PTSP) at the BP Batam, which is already operational.
The i23 J system accommodates eight types of licensing related to investment. With the system, the licensing process can be completed in three hours. In fact, during a simulation on Wednesday, the process can be concluded in two-and-a-half hours.
“We use the three-hour mark as the maximum time,” Gusmardi said.
The eight types of licensing included in the system are investment permits or principle permits, import identification number (API), deed of establishment, tax ID number (NPWP), company registry insignia (TDP), customs identity number (NIK), plan to employ foreign workers permit (RPTKA), and foreign workers employment permit IMTA).
Gusmardi underlined that there are some requirements investors need to meet to be able to enjoy the service.
“Not all investors can make use of the service. They must be willing to invest a minimum of Rp50 billion or employ 300 workers. If they can meet one of the requirements, they are eligible for the facility. In three hours an investor can start conducting business because those eight permits are the starting permits for a business,” said Gusmardi.
Meanwhile, other permits, including building permits (IMB) and an environmental permit required for construction, can go hand-in-hand by making use of the construction direct investment service facility (KILK).
“Investors do not have to line-up for the service. We realize their time is very important,” said Gusmardi.
The program has been implemented by the BKPM in Jakarta.
“Batam will then become the first provincial-level region that has the facility, outside of the BKPM,” said Gusmardi.
The central government is said to be very influential in making the system available as it has delegated the authority to BP Batam.
“Furthermore the local government has also been supporting us,” Gusmardi added.
The infrastructure for investment available in Batam, such as electricity and clean water, as well as manpower, must get support from speedy services for the investors.
“Batam must become the investors’ choice. Its strategic location is not enough. We can say that the island is only 20 kilometers away from Singapore, but what do investors get from that? It’s our duty to provide added value to those wanting to invest here,” said Gusmardi, who was Indonesia’s trade attaché at the Indonesian Embassy in Washington, DC.
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