Indonesian President Joko Widodo (Jokowi) has announced the 12th tranche of the government’s economic policy package which will focus on facilitating the setup of new small and medium enterprises (SMEs).
Under the latest policy, the government will work on encouraging small business startups by finding ways to simplify procedures and cut fees for the application of building construction permits, property registration, and access to banking loans, said President Jokowi.
Under the old regulation, applicants wishing to start a new business must pass through 13 procedures that normally took 47 days and cost IDR6.8 million (US$510) to IDR7.8 million to complete, according to a news report from Antara News.
Also, they had to obtain a number of permits including a commercial permit, a company registration certificate, a deed of incorporation, a business site permit, and a nuance license.
Under the new policy, applicants will only go through seven procedures, which they can finish in 10 days at a cost of IDR2.7 million.
Moreover, the new regulation only requires a commercial permit and a company registration certificate, which are to be issued altogether, as well as a deed of incorporation, President Jokowi said.
Based on the 2007 law, the minimum capital needed to set up a limited liability company was IDR50 million.
Under the new policy, Government Regulation No. 7/2016, the authorized capital for a limited liability company remains unchanged, but the authorized capital for an SME is to be based on the agreement among its founders as contained in the deed of incorporation.
At the same time, the government will reduce the steps for licensing building construction to 14 procedures for 52 days at a cost of IDR70 million, lower than the previous 17 procedures for 210 days at a cost of IDR86 million.
The latest policy package is part of the nine-point development program that mandates the country to become a self-reliant and competitive nation, the President said.
All regional governments in the country will implement this policy package, he said.
“This is a big and important package with a wide scope,” Chief Economic Minister Darmin Nasution said recently following the presidential announcement made late last week.
So far, the government has issued 12 economic policy packages since September last year aimed at facilitating business development and attracting investments into Indonesia.
The packages are also designed to spur economic development in regions across the country.
