DECREE OF THE STATE MINISTER FOR INVESTMENTS/HEAD OF THE INVESTMENT COORDINATING BOARD No. 38/SK/1999

CONCERNING

THE GUIDELINE AND PROCEDURE FOR FILING APPLICATIONS FOR INVESTMENTS SET UP IN THE FRAMEWORK OF DOMESTIC CAPITAL INVESTMENTS AND FOREIGN CAPITAL INVESTMENTS  
 

CONSIDERATIONS

CHAPTER I : GENERAL PROVISIONS

CHAPTER II : APPLICATIONS FOR NEW CAPITAL INVESTMENTS

PART ONE    : DOMESTIC INVESTMENTS

PART TWO     : FOREIGN INVESTMENTS

PART THREE     : SPECIFIC PROVISIONS ON CERTAIN BUSINESS SECTORS AND ACTIVITIES

    A. INVESTMENTS IN NON OIL/GAS MINING UNDER PMDN
         ARRANGEMENTS
    B. INVESTMENTS IN NON OIL/GAS MINING UNDER PMA
         ARRANGEMENTS
    C. REGIONAL REPRESENTATIVE OFFICE OF FOREIGN
         COMPANIES
    D. CAPITAL PARTICIPATION BASED COMPANIES

CHAPTER III : FIXED BUSINESS LICENCE (IUT)

CHAPTER IV : APPLICATIONS FOR EXPANSION OF INVESTMENTS

CHAPTER V : AMENDMENT OF CAPITAL INVESTMENTS

PART ONE : GENERAL REQUIREMENTS FOR AMENDMENT APPLICATIONS
PART TWO : CHANGE IN LOCATIONS OF PROJECTS
PART THREE : CHANGE IN LINES OF BUSINESS AND PRODUCTION
PART FOUR : CHANGE IN EMPLOYMENT OF FOREIGN PERSONNEL
PART FIVE : CHANGE IN INVESTMENTS AND SOURCES OF FINANCING
PART SIX : CHANGE IN SHARE OWNERSHIP OF PMA COMPANIES
PART SEVEN : CHANGE IN STATUS OF PMA COMPANIES INTO PMDN COMPANIES
PART EIGHT : CHANGE IN STATUS OF PMDN OR NON-PMA/ PMDN COMPANIES INTO PMA COMPANIES
PART NINE : EXTENSION OF PMDN AND PMA PROJECT COMPLETION PERIODS
PART TEN : MERGER OF COMPANIES
PART ELEVEN : CHANGE IN NAMES OF COMPANIES
PART TWELVE : CHANGE IN FORMS/PATTERNS OF PARTNERSHIPAND / OR BUSINESS PARTNERS ESPECIALLY FOR BUSINESS LINES REQUIRING PARTNERSHIP WITH SMALL-SCALE BUSINESSES

CHAPTER VI : CAPITAL INVESTMENT IMPLEMENTATION APPROVAL AND LICENCES

PART ONE : IMPORT OF CAPITAL GOODS
PART TWO : IMPORT OF BASIC/AUXILIARY MATERIALS
PART THREE : LIMITED IMPORTER'S IDENTIFICATION NUMBER (APIT)
PART FOUR : EXPATRIATE WORK PERMITS

CHAPTER VII : CAPITAL INVESTMENTS IN BONDED ZONES AND IN INTEGRATED ECONOMIC DEVELOPMENT ZONES (KAPET)

CHAPTER VIII : SANCTIONS

CHAPTER IX : MISCELLANY

CHAPTER X : TRANSITIONAL PROVISIONS

CHAPTER XI : CONCLUSION

  DECREE OF THE STATE MINISTER FOR INVESTMENTS/HEAD OF THE INVESTMENT COORDINATING BOARD

No. 38/SK/1999

CONCERNING

THE GUIDELINE AND PROCEDURE FOR FILING APPLICATIONS FOR INVESTMENTS SET UP IN THE FRAMEWORK OF DOMESTIC CAPITAL INVESTMENTS AND FOREIGN CAPITAL INVESTMENTS   THE STATE MINISTER FOR INVESTMENTS/HEAD OF THE INVESTMENT COORDINATING BOARD

Considering:

a. that within the framework of promoting economic activities and national development, it is necessary to create a business environment which is increasingly attractive and better guarantees the continuity of capital investments through a reform in licensing service;

b. that in order to facilitate service for investments in the framework of Domestic Investments (PMDN) and Foreign Investments (PMA), it is deemed necessary to increase the number of service centres, through a policy on the delegation of authority to grant opprovoWicences to institutions in regions and representative offices of the Republic of Indonesia;

c. that in order to support the policy as meant in point above, it is deemed necessary to re-improve the guideline and procedure for filing applications for investments and their settlement so as to be further adjusted to the provisions and regulations in force.

In view of :
 

1. Act No. I/I 967 jo Act No. I I/I 970 on Foreign Capital Investments (State Gazette of 1967 No. I Supplement to State Gazette No.2818 }o State Gazette of 1970 No.48, Supplement to State Gazette No.2943);
2. Act No.6/l 968 }o Act No. 12/1970 on domestic capital investments (State Gazette of 1968 No.33, Supplement to State Gazette No.2853 )o State Gazette of 1970 No.47, Supplement to State Gazette No.2944);
3. Act No. I/I 995 on limited liability companies (State Gazette of 1995 No. 13, Supplement to State Gazette No.3587);
4. Act No.9/l995 on small-scale businesses (State Gazette of 1995 No. 74, Supplement to State Gazette No.3611);
5. Government Regulation No.24/1986 jo No-9/1993 on the periods of licences for foreign capital investment companies (State Gazette of 1986 No. 32, Supplement to State Gazette No. 3335 Jo State Gazette of 1993 No.l3, Supplement to State Gazette No.3515);
6. Government Regulation No. 20/1994 on share owner-ship in companies set up under foreign capital investments (State Gazette oJ 1994 No. 28, Supplement to State Gazette No. 3552);
7. Government Regulation No. 20/1994 on share owner-ship in companies set up under foreign capital investments (State Gazette oJ 1994 No. 28, Supplement to State Gazette No. 3552);
8. Government Regulation No. 44/1997 on business partnership (State Gazette of 1997 No. 91, Supplement to Statute Gazette No. 3718);
9. Presidential Decree No. 26/1980 on the establishment of the Regional Investment Coordinating Board;
10. Presidential Decree No. 330981 )ls. No. 780982 No.113/1998 on the Investment Coordinating Board and Presidential Decree No. 25/1991 )o. No. 114/1998 on the status, tasks, functions and organisational structure of the Investment Coordinating Board;
11. Presidential Decree No. 17/1986 on the requirements for national share .ownership in foreign investment companies for equal treatment as domestic investment companies;
12. Presidential Decree No. 53/1987 on regional representative offices of foreign companies
13. Presidential Decree No. 53/1987 on regional representative offices of foreign companies;
14. Presidential Decree No. 750995 on the employment of expatriates;
15. Presidential Decree No. 410.996 on industrial estates;
16. Presidential Decree No. 89/1996 jo No. 90998 on the development of integrated economic development zones;
17. Presidential Decree No. 122M/1998 on the establishment of the Development Reforms Cabinet;
18. Presidential Decree No. 96/1998 on the negative list for capital investments;
19. Presidential Decree No. 99/1998 on the fields/types of business reserved for small-scale companies and the fields/types of business open to medium-scale or large-scale companies under business partnership;
20. Presidential Decree No. 183/1998 jo No. 370999 on the Investment Coordinating Board as already amended by Presidential Decree No. 121/1999;
21. The Decree of the 'State Minister for Mobilisation of investment Funds/Chairmann of the Investment Coordinating Board No. 15/SK/1994 on the implementation of share ownership in companies set up under foreign capital investments;
22. The Decree of the State Minister for Mobilisation of Investment Funds/Chairmann of the Investment Coordinating Board No. zZ/sK/1996 on the monitoring and evaluation, fostering, and control of capital investment realisation;
23. The Decree of the State Minister for Investments/Head of the Investment Coordinating Board No. 22/SW1 99 on capital participation in holding companies;
24. The Decree of the State Minister for Investments/Head of the Investment Coordinating Board No. 37/SK0999 on the delegation of authority to grant approval and facilities as well as implementation licences of investment to Governors/Heads of First-level regions.

DECIDES :  
 

By revoking the Decree of the State Minister for Investments/Head of the Investment Coordinating Board No. 30/SKI1998 dated October 20, 1998 on the guideline and procedure for filing applications for Investments set up In the framework of domestic and foreign capital investments;
 

To stipulate:

THE DECREE OF THE STATE MINISTER FOR INVESTMENTS/HEAD OF THE INVESTMENT COORDINATING BOARD CONCERNING THE GUIDELINE AND PROCEDURE FOR FILING APPLICATIONS FOR INVESTMENT SET UP IN THE FRAMEWORK OF DOMESTIC CAPITAL INVESTMENTS AND FOREIGN CAPITAL INVESTMENTS
 
  CHAPTER I GENERAL PROVISIONS Article I

Hereinafter referred to as :

1. Applications for new capital Investments are applications for approval of investments, luithin the framework of domestic investments (PMDN) as well as foreign Inuestrnents (PMA), along with relevant facilities, which are filed by prospective investors for setting up and running new; business undertakings.
    
2. Applications for expansion of capital investments are applications for approval of the increase/addition of capital along with relevant facilities to increase the installed capacity of production approved and/or odd the variety of goods/service produceduced.
    
3. Expansion of capital investments in the subsector of food crops and plantations is additional investments to finance one or more activities out of the following;

• diversification, namely increasing the number of crop varieties; and/or
• rejuvenation/rehabilitation which makes use of high yielding seedlings; and/or
• intensification, namely Increasing production with - out expanding land; and/or
• increasing the production capacity of the relevant processing unit; and/or
• expanding crop planting areas; and/or
• integrating business operations lulth upstream and downstream industries.

1. Restructuring is the activity of replacing main machinery (adding equipment or component of machinery) for quality enhancement or efficiency promotion of the process of production without increasing capacity.
    
2. Applications for amendment of capital investments are applications for approval of changes in investment provisions already stipulated in the previous investment approval.
    
3. PMDN approval Is the approval of investments along with facilities, which is granted within the framework of implementing Act No.6/l968 jo No.lZ/1970 on domestic investments (PMDN) and also effective as the principle approval or the provisional business licence.
    
4. MA approval is the approval of investments along with facilities, which is granted within the framework of implementing Act No. I/I 967 jo No. I I/I 970 on foreign investments (PMA) and also effective as the principle approval or the provisional business licence.
    
5. Approval of expansion is the approval of investments along with facilities to increase the installed capacity permitted and or the kinds of products and services.
    
6. pproval of amendment is the approval to moke changes in certain investment provisions already stipulated in the previous investment approval.
    
7. Approval of establishment of the regional representative office of foreign companies (KPWA) is the approval to set up a representative office in Indonesia which Is domiciled in Indonesia.
    
8. Holding is a capital portictpatton/share participation based company established in accordance with the provisions as meant in the Decree of the State Minister for Investments/Head of the Investment Coordinating Board No. 12/SW1999 doted June 8, 1999.
    
9. Capital investment implementation licences are licences from central-government and regional-administration agencies, which are needed for the realisation of investment approval.
    
10. Approval of investment facilities is the approval of the granting of investment facilities in the form of import duty facilities and other fiscal facilities as determined by the government.
     
11. The limited importer's identification number (APIT) is the identification ntimber serving as the licence to import capital goods and basic/auxiliary materials for use by relevant companies in the process of production of investment projects already approved by the government. 

12. he decision on the plan for employment of foreign personnel (RPTK) is the approval of the planned number, functions and employment periods of foreign personnel needed as the basis for the approval of the entry of expatriates (TKWNAP) and the issuance of work permits forexpatriates (IKTA).
13. The decision on work permits for expatriates (IKTA) is the licence for companies to employ a number of expatriates in certain functions and period. 
14. The fixed business licence (IUT) is the licence which shall be possessed by companies for the realisation of commercial production of goods as well as services, as the implementation of investment approval letters already previously obtained by companies
     
15. The expansion business licence is the licence which shall be possessed by companies for the realisation of commercial production in connection with the increase in production of goods as welt as services, as the implementation of investment expansion approval letters already previously obtained by companies.
     
16. Status change is the change in status of investments especially requested viz. the change from PMDN or non PMA/PMDN into PMA, or from PMA into PMDN, as a consequence of a change in share ownership.
     
17. Merger is the combination of 2 (two) or more companies set up under PMDN and/or PMA and/or non PMA/PMDN which have been engaged in commercial.production and have obtained IUT into a company, which will carry on all activities of the companies combined, while the merg ing companies are liquidated.
     
18. apital investment progress reports (LKPM) are periodic reports on the developments of activities of investment companies according to the model and procedure already laid down.
     
19. The bonded zone is a building, place or area with certain borders in which industrial business octitiuitles of goods and materials processing, designing, engineering, sorting, initial examination, final inspection and packaging of goods and materials derived from imports and other Indonesian custom are as whose production is destined for exports ore carried out.
     
20. The bonded zone operator is a state owned corporation in the form of Persero (state limited liability company} or an authority especial set up for the purpose of operating and or managing a bonded zone.
     
21. The Integrated Economic Development Zone (KAPET) Is a geographical region with certain borders fulfilling requirements, which has potential for rapid growth and/or has leading sectors capable of boosting the economic growth of surrounding areas and/or needs investments in surrounding areas and/or needs investments in large amounts for its development. KAPET is stipulated on the basis of Presidential Decree No.89/1996 }o No.9/1998.
     
22. The Management Board for integrated economic development zones (KAPET) is the board especially set up for the purpose of operating and or managing KAPET.
     
23. Criteria of small-scale businesses are :

a.      possessing maximum net assets worth Rp 200,000,000.- (two hundred million rupiahs), excluding land an buildings of business sites; or

b.      registering maximum annual sales proceeds worth Rp1,000,000,000.- (a billion rupiahs);

c.       being owned by citizens of Indonesia;

d.      being independent, not constituting a subsidiary owned, controlled by or directly and indirectly affiliated to medium-scale or large-scale companies;

e.      having the status of individual businesses, non statutory body business units, or statutory body businessunits including cooperatives.

24. Heads of Regional Investment Coordinating Board (BKPM) in the filing of applications are staff of Governors/Heads of Provincial Regions in charge of investments.
25. Heads of representative offices of the Republic of Indonesia in the filing of applications are heads of representative offices of the Republic of Indonesia abroad

Article 2

(1) Prospective investors planning to undertake investment activities under PMDN arrangements shall file applications for investments to:

1. the State Minister for Investments/Head of the Investment Coordinating Board;
2. heads of local BKPMD;

(2)Prospective investors planning to undertake investment activities under PMA arrangements shall file applications for investments

1.  
1. the State Minister for Investments/Head of the investment Coordinating Board;
2. heads of local representative offices of the Republic of Indonesia; heads of local BKPMD.

(3)     a. Letters of approval (SP) of PMDN shall be issued by the State Minister for Investments/Head of the Investment Coordinating Board or Governors/Heads of Provincial Regions in this case Chairmen of local BKPMD.

b. Letters of approval (SP) of PMA shall be issued by the State Minister for Investments/Head of the investment Coordinating Board or Minister of Foreign Affairs in this case heads of local representative offices of the Republic of Indonesia or Governors/Heads of Provincial Regions in this case Chairmen of local BKPMD.  

4. Investors already obtaining the letters of approval as meant In paragraph (3) shall file applications for investment implementation licences, which are required for the realisation of their investments.
5. 
      
6. The applications for investment implementation licences as meant in paragraph (4) shall be filed to:

1.  
1. the State Minister for Investments/Head of BKPM by investors obtaining approval of investments from the State Minister for Investments/Head of BKPM or Minister of Foreign Affairs in this case heads of local representative offices of the Republic of Indonesia.
2. 
    
3. heads of local BKPMD, by investors obtaining approval of investments from heads of local BKPMD or heads of local representative offices of the Republic of Indonesia.

4. Applications for implementation invesment licences of projects located in KAPET as meant in paragraphs (3),(4) and (5) shall be filed to the local management board of KAPET.

Article 3

1. Investment approval letters (SP) shall be automatically cancelled if within I (one) year starting from the date of issuance there is no project realisation in the form of concrete administrative or physical activities.
2. 
    
3. Concrete administrative activities shall be those for the following licensing:

1.  
1. the location licence or the building lease agreement especially for the field of services or the regional mining licence (SIPD) or the mining concession (KP) especially for the field of mining; and
2. bank accounts in the names of PMA companies (especially for new PMA companies); and
3. Customs SP for capital goods; and/or
4. APIT (limited importer's identification number); and/or
5. RPTK (decision on the plan for employment of foreign personnel) for those using expatriates; and/or
6. IMB (building construction permit); and/or
7. HO/UUG (Nuisance Act based permit).
8. deed of establishment of companies already validated by the Minister of Justice for capital participation based companies.

1. Concrete physical activities shall be those already conducted :

1.  
1. for industries: there ore main activities in the form of land clearance covering at least 25% of the areas contained in approval letters, or
2. for services and capital participation (holding): there are main activities in the form of land clearance covering at least 25% of the areas contained in approval letters, or office/building space.

Article 4

Prospective investors in filing applications for PMDNand PMA shall observe the following guides :

1. The negative list for investments.
2. The sectors/types of business reserved for small-scale businesses and the sectors/types of business open to medium scale or large-scale companies with partnership requirements.
3. Other provisions issued by the government

Article 5  
(1) The approval of facilittes and investment implementation licences issued by the State Minister for lnvestments/Head of BKPM or Chairmen of BKPMD shall be composed of :

1.  
1. Approval of the granting of facilities of exemptionfrom import duty and other facilities of taxation on the import of capital goods.
2. Approval of the granting of facilities of exemption from import duty on basic materials and or auxiliary materials for the first 2 (two) years production on the basis of installed capacity.
3. Approval of the granting offacliltlef of government borne income tax to certain industries.
4. The limited importer's identification number (APIT).
5. The decision on the plan for employment of foreign personnel (RPTK).
6. The decision on the expatriate work permit (IKTA).
7. The fixed business licence (lUT) the expansion business licence and lUT renewal.

2. The investment implementation licences issued by regencies/munlclpatities shall be composed of :

1.  
1. The location licence.
2. The Nuisance Act based permit (UUG/HO).
3. The building construction permit (IMB).

All licences to projects located in KAPET shall be issued by the management board of relevant KAPET.
 

CHAPTER II APPLICATIONS FOR NEW CAPITAL INVESTMENT PART ONE DOMESTIC INVESTMENTS   Article 6.  

1. Applications for new capital investments under PMDN arrangements can be filed by limited liability companies (PT), partnership companies (CV), firms (fa), cooperatives business units, state owned enterprises (BUMN), regional-administration owned companies (BUMD), or individuals.
2. 
    
3. The applications for new capital investments as meant in paragraph (1) shall be filed to :

1. a. the State Minister of lnvestments/Head of BKPM; or
   b. chairmen of local BKPMD.
    
2. In the case of new investments being located in 2 (two) or more provinces, the applications shall be filed to the State Minister of Investments/Head of BKPM.
3. 
    
4. The applications for new investments as meant in paragraphs (2) and (3) shall be filed in duplicate by using the form of model I/PMDN as contained In Attachment 1.
5. 
    
6. The approval of the applications for investments as meant in paragraph (2) letters a and paragraph (3) shall be issued by the State Minister for Investments/Head of BKPM in the form of the letter of approval of domestic Investments (SP-PMDN), shall be conveyed to applicants with copies made available to the following officials :

1.  
1. The Minister of Home Affairs;
2. Ministers fostering business fields of the relevant investments;
3. The Minister of Finance;
4. The State Minister for Agrarian Affairs/Head of the National Land Affairs Agency (BPN)
5. The State Minister for Environment Affairs/Head of BAPEDAL (Board of Control over Impacts on the Environment);
6. The Minister of Cooperatives, Small and Medium-scale Businesses (in the case of partnership with small-scale businesses)
7. Governor of Bank Indonesia;
8. Governors of the relevant provincial regions
9. Directors general in charge of technical affairs of the relevant investments;
10. The Director General of Taxation;
11. The Girector General of Customs and Excise;
12. The Director General of Acts and Legislation;
13. Chairmen of the BKPMD concerned;
14. Heads of technical service Institutions of regencies/municipalities concerned.

1. The approval of applications for Investments as meant In paragraph (2) letter b shall be issued by Chairmen of BKPMD to Governors/Heads of Provincial Regions on behalf of the State Minister for Investrnentdhleod of the Investment Coordinating Board in the form of the letter of approval of domestic investments (SP-PMDN) with copies made available to Institutions concerned :

1.  
1. The State Minister for Investments/Head of BKPM
2. The Minister of Home Affairs
3. The Director General of Law and Legislation
4. Governors Meads of the relevant provincial regions
5. Local Bank Indonesia offices
6. Local regional offices of technical ministries fostering business fields of the relevant investments;
7. Local regional offices of the Directorate General of Taxation;
8. Local regional offices of the Directorate General of Customs and Excise;
9. Local regional offices of the National Land Agency
10. Local regional offices of the Ministry of Cooperatives, Small and medium-scale businesses (in the case ofpartnership with small-scale businesses);
11. Local offices of BAPEDAL (Board of Control over Impacts on the Environment).
12. Regents/mayor/heads of regencies/cities where the relevant investment activities ore located.

1. The approval as meant in paragraphs (4) and (5) shall be issued not later than 10 (ten) working days as from the receipt of complete and true applications.
2. 
    
3. SP-PMDN shall be automatically cancelled if there is no realisation of projects in the form of concrete actitivies as meant in Article 3 for 3 (three) years as from the date of issue of SP-PMDN.
4. 
    
5. The stipulation of periods of the completion of projects, which are contained in the letter of approval of investments, shall be adjusted to scales of investments or business fields.

PART TWO FOREIGN INVESTMENTS     Article 7  

1. Applications for new capital investments under PMA arrangements can be filed by :

1. foreign citizens and/or foreign statutory bodies and/or PMA companies; or
2. foreign citizens and/or foreign statutory bodies and/or PMA companies along with Indonesian citizens and/or Indonesian statutory bodies.

1. Applications for new investments as meant in paragraph (1) shall be filed to:

1. The State Minister for Investments/Head of BKPM; or
2. Heads of local representative offices of the Republic of Indonesia; or
3. Chairmen of local BKPMD.

1. in the case of new investments being located in 2 (two) or more locations, the applications shall be filed to the State Minister for Investments/Head of BKPM.
2. 
    
3. Applications for new investments as meant in paragraphs (2) and (3) shall be filed in duplicate by using the form of model WMA as meant in Attachment 2.
4. 
    
5. Based on the evaluation of applications for investments, the State Minister for Investments/Head of BKPM or Minister of Foreign Affairs In this case Heads of local representative offices of the Republic of Indonesia or Governors/Heads of Provincial Regions in this case Chairman of local BKPMD shall issue letters of approval of foreign investments (SPPMA), shall be conveyed to applicants with copies mode available to :

1.  
1. The Minister of Home Affairs;
2. Ministers fostering business fields of the relevant investments;
3. The Minister of Health:
4. The State Minister for Agrarian Affairs/Head of BPN;
5. The State Minister for Environment/Head of BAPEDAL (Board of Control over Impacts on the Environment);
6. The Minister of Cooperatives, Small and Medium scale Businesses (in the case of partnership with scale businesses);
7. Ambassador/Heads of representative offices of countries of origin of foreign participants in Indonesia;
8. Governor of Bank Indonesia;
9. Governors of the relevant provincial regions;
10. Directors general in charge of technical affairs of the relevant investments;
11. The Director General of Taxation;
12. The Director General of Customs and Excise;
13. The Director General of Acts and Legislation;
14. Chairmen of the BKPMD concerned;
15. Heads of technical service institutions of regencies/municipalities concerned.

1. A copy of the letter of approval issued by Chairmen of local BKPMD as meant in paragraph (5) shall also be made available to the State Minister for Investments/Head of BKPM.
2. 
    
3. Copies of the letter of approval issued by heads of local representative offices of the Republic of Indonesia as mean in paragraph (5) shall also be made available to the Minister of Foreign Affairs and the State Minister for Investments/Head of BKPM.
4. 
    
    
5. The approval as meant in paragraph (5) shall be issued not later than 10 (ten) working days as from the date of receipt of complete and true applications.
6. 
    
7. SP-PMA shall be automatically cancelled if there is no realisation of projects in the form of concrete actitivies as meant in Article 3 for 3 (three) years as from the date of issue of SP-PMDN.
8. 
    
9. The stipulation of periods of the completion of projects contained in the letter of approval of investments, shall be adjusted to scales of investments or business fields.

 
 
  PART THREE SPECIFIC PROVISIONS ON CERTAIN BUSINESS SECTORS AND ACTIVITIES  

A. INVESTMENTS IN NON OIL/GAS MINING UNDER PMDN ARRANGEMENTS
 
 
 

Article 8.  

1. Applications for new capital investments under PMDN arrangements in non oil/gas mining for the category of strategic minerals (including cool with an area of up to 1,000 ha) and vital minerals shall be filed by enclosing mining concession documents issued by the Minister of Mines and Energy or the Director General of General Mining on behalf of the Minister, and supplying data as meant in article 6 paragraph (3).
2. 
    
    
3. Applications for new capital investments under PMDN arrangements in mining for category C minerals shall be filed by enclosing the regional mining licence (SIPD) andsupplying data as meant in Article 6 paragraph (3).
4. 
    
5. The applications as meant in paragraphs (1) and (2) shall be submitted by using Model I/PMDN forms according to the specimen in Attachment I, to :

1.  
1. the State Minister for Investments/Head of BKPM;
2. the Chairman of the local BKPMD.

(4) a. Approval of applications as meant in paragraph (3) letter a. shall be issued by the State Minister for Investments/Head of BKPM in the form of SP-PMDN to applicants with copies addressed to the institutions as meant in Article 6 paragraph (6).
 
 

2. Approval of applications as meant in paragraph (3) letter b. shall be issued by the Chairman of BKPMD for the Governor/Head of the first level region on behalf of the investment Minister/Head of BKPM to applicants with copies addressed to institutions as meant in Article 6 paragraph (6).

(5) The approval as meant in paragraph (4) shall be issued not later than 10 (ten) working days after the receipt of complete and correct applications.
 
(6) If within 3 (three) years after the date of issuance ofSP-PMDN there is no project realisation in concrete activities as meant in Artide 3, the SP-PMDN shall be automatically cancelled.
 
 
 

Article 9.  

1. Applications for new capital investments under PMDN arrangements especially in cool mining with an area of 1,000 ha or more shall be filed with coal mining exploitation working agreements (PKP2B).
2. 
    
    
3. Draft coal mining exploitation working agreements shall be prepared by the government of the Republic of Indonesia in this cose the Ministry of Mines and Energy and the prospective investors.
4. 
    
5. On the basis of the draft coal mining exploitation working agreements as meant In paragraph (2), the State Minister for Investments/Head of BKPM shall convey his opinion to the Minister of Mines and Energy.
6. 
      
7. The Minister of Mines and Energy on behalf of the government of the Republic of Indonesia and prospective investors shall sign coal mining exploitation working agreements.
8. 
    
    
9. Coal mining exploitation working agreements already signed by the Minister of Mines and Energy and prospective investors shall be treated as PMDN approval issued by the State Minister for Investments/Head of BKPM.
10. 
       
11. Investment plans for the realisation of coal mining exploitation working agreements and their facilities shall be submitted in phases to the State Minister for Investments/Head of BKPM by enclosing recommendations from the Director General of General Mining.

2. INVESTMENTS IN NON-OIL/GAS MINING UNDER PMA ARRANGEMENTS

  Article 10.

1. Applications for new capital investments under PMA arrangements in non oil/gas mining shall be filed in the form coal mining exploitation working contracts or working agreements between prospective investors and the government of the Republic of Indonesia, whose drafts are prepared by the government of the Republic of Indonesia in this cose the Ministry of Mines and Energy and the prospective investors. 
2. Draft coal mining exploitation working contracts or working agreements already approved by the relevant parties shall be submitted by the Minister of Mines and Energy to the House of Reoresentatives of the Reoublic of Indonesia and the State Minister for Investments/Head of BKPM.
3. The House of Representatives of the Republic of lndonesia and the Investment Minister/Head of BKPM shall respectively convey their opinions to the President of the Republic of Indonesia about the draft coal mining exploitation working contracts or working agreements.
4. On the basis of approval of the President of the Republic of Indonesia, the Minister of Mines and Energy shall sign coal mining exploitation working contracts or working agreements on behalf of the government of the Republic of Indonesia. 
5. Cool mining exploitation working contracts or working agreements shall be treated as SP-PMA issued by the State Minister for Investments/Head of BKPM. 
6. Investment plans for the realisation of coal mining exploitation working contracts or working agreements and their facilities shall be submitted in phases to the Investment Minister/Head of BKPM by enclosing recommendations from the Director General of General Mining.

2. REGIONAL REPRESENTATIVE OFFICE OF FOREIGN COMPANIES

  Article 11

1. The establishment of a regional representative office of foreign companies (KPWPA) in non financial sectors shall obtain a licence from the State Minister for lnvesments/Head of BKPM.
2. Applications for the licence as meant in paragraph (1) shall befiled in duplicate by using Model KPWPA forms according to the specimen in Attachment 3, to the Investment Minister/Head of BKPM.
3. The licence of establishment of KPWPA shall be issued by the State Minister for Investments/Head of BKPM and conveyed to applicants with copies addressed to the following institutions:

a.      The Minister of Finance.

b.      The Minister of Industry and Trade.

c.       The Minister of Manpower.

d.      Representative offices of Indonesia in originating countries of foreign companies.

e.      Embassies/representative offices of originating countries of foreign companies in Jakarta.

f.        The Chairman of local BKPMD.

4. The licence as meant in paragraph (3) shall be issued not later than 7 (seven) working, days after the receipt of complete and correct applications.

4. CAPITAL PARTICIPATION BASED COMPANIES

  Article 12

1. Applications for the establishment of capital participation-based companies under PMDN and PMA arrangements can be submitted by statutory bodies and/or foreign citizens and/or Indonesian statutory bodies and/or Indonesian citizens.
2. The applications as meant in paragraph (1) shall be submitted in duplicate by using the form according to the specimen in Attachment 4 to the State Minister for Investments or the Chairman of local BKPMD.
3. Approval of the establishment of capital participation based companies as meant in paragraph (1) shall be issued by the State Minister for Investments/Head of BKPM or Governor/Heads of First-level regions in this cose the Chairman of local BKPMD and conveyed to applicants in the form of letters of approval with copies made available to the institutions as meant in Article 6 paragraph(5) for PMDN and Article 7 paragraph (5) for PMA.)
4. The approval as meant in paragraph (3) shall be issued not later than 10 (ten) working days as from the receipt of complete and correct applications.
5. if within 3 (three) years as from the issue of approval there is no project realisation in concrete activities as meant in Article 3, the letter of approval shall be automatically cancelled.

 
 
  CHAPTER III

FIXED BUSINESS LICENCE (IUT)     Article 13.

(1) Investment companies shall be obligated to possess IUT for the commencement of commercial production.

(2) a. Applications for IUT as meant in paragraph (1) for those whose investment approval is issued by the State Minister for Investments/Head of BKPM shaII be filed to the State Minister for Investments/Head of BKPM.

b. Applications for IUT as meant in paragraph (1) for those whose investment approval is issued by Governors of First-level regions in this case Chairmen of BKPMD shall be filed to Chairmen of BKPMD.

c. Applications for IUT as meant in paragraph (1) for those whose investment approval is issued by Heads of Representative Offices of the Republic of Indonesia, shall be filed to the State Minister for Investments or Chairman of BKPMD.  

(3) The applications as meant in paragraph (2) shall be filed in duplicate by using IUT application forms according to the specimen in Attachment 5.

(4) a. For applicants as meant in paragraph (2) letter a, IUT shall be issued by the State Minister for lnvestments/Head of BKPM on behalf of the Minister in charge of the relevant business in the form of decisions on IUT (SK-IUT) and conveyed to applicants with copies addressed to the institutions as meant in Article 6 paragraph (4) for PMDN or Article 7 paragraph (5) for PMA.

b. For applicants as meant in paragraph (2) point b., IUT shall be issued by the Chairman of BKPMD for the Governor/Head of provincial region on behalf of the Minister in charge of the relevant business for the State Minister for Investments/Head of BKPM in the form of SK-IUT with copies addressed to the institutions as meant in Article 6 paragraph (5).

1. The IUT as meant in paragraph (2) shall be issued by the State Minister for Investments/Head of BKPM on behalf of the Minister in charge of the relevant business in the form of SK-IUT and conveyed to applicants with copies addressed to the institutions as meant in Article 7 paragraph (5) for PMA, or IUT issued by the Chairman of BKPMD for Governors/Heads of provincial regions on behalf of the Minister in charge of the relevant business for the State Minister for lnvestments/Head of BKPM in the form of SK-IUT, and conveyed to applicants with copies mode available to the institutions as meant in Article 6 paragraph (5) for PMDN or Article 7 paragraph (5) for PMA.

1. The IUT as meant in paragraph (4) shall be issued not later than 10 (ten) working days after the receipt of complete and correct applications.

1. For industrial companies located in industrial estates, investment approval shall be valid as the licence required for commercial production. When the companies are already engaged in commercial production, they shall make out statements on preparedness for production according to the specimen in Attachment 5.0 and submit them to BKPM or BKPMD. Based on the statement on preparedness for commercial production, BKPM or BKPMD shall directly issue IUT.
2. IUT shall be valid for 30 (thirty) years storting from the commencement of commercial production for PMA companies and as long as companies are engaged in production/operation for PMDN companies. 
3. PMA companies which undertake business expansion shall be granted IUT validity extension of 30 years starting from the commencement of commercial production of their expansion projects.

 
 
  Article 14

1. PMA companies whose IUT validity periods as meant in Article 13 paragraphs (7) and (8) are going to expire can file applications for IUT renewal for their business activities.
2. The pplications for IUT renewal as meant in paragraph (1) shall be filed before the expiration of their IUT by using IUT forms according to the specimen in Attachment 4, in duplicate to the State Minister for lnvesments/Head of BKPM and/or the Chairman of BKMD.
3. Based on the applications as meant in paragraph (2), the State Minister for Investments/Head of BKPM and/or the Chairman of BKPMD shall issue decisions on IUT renewal and the IUT are valid for 30 (thirty) years starting from the expiration of the relevant IUT, with copies addressed to the institutions as meant in Article 7 paragraph (5).
4. The IUT renewal decision as meat in paragraph (3) shall be issued not later than 7 (seven) working days after the receipt of complete and correct applications

 
 
 
 
  CHAPTER IV

APPLICATIONS FOR EXPANSION OF INVESTMENTS     Article 15

1. Applications for expansion of investments under PMDN or PMA arrangements shall be filed by PMDN or PMA companies already in possession of IUT.
2. In the case of types of production being different from those of previous projects or locations of business those of previous projects, expansion applications can be filed without being required to possess IUT for previous projects. 
3. Applications for PMDN or PMA expansion shall be filed in duplicate to:

a.      the State Minister for Investments/Head of BKPM;

b.      the Chairman of local BKPMD.

1. Applications for PMA expansion whose SP-PMA are issued by Heads of Representative Offices of the Republic of Indonesia shall be submitted to State Minister for Investments/Head of BKPM or the Chairman of BKPMD and implementation licences required for the expansion approval ore filed to institutions where the expansion approval is issued. 
2. Applications for PMDN and PMA expansion as meant in paragraph (3) shall be filed by using Model l/PMDN form according to the specimen in Attachment 6 for PMDN, and Model I/PMA form according to the specimen in Attachment 7 for PMA.
    
3. Applications for expansion of investments located in 2 (two) provinces or more shall be filed to the State Minister for InvestmentsMead of BKPM.
4. Approval of expansion of investments of the applications as meant in paragraph (3) shall be issued by the State Minister for lnvestments/Head of BKPM or Governors/Heads of First-level regions in this case the Chairman of local BKPMD on behalf of the State Minister for lnvestments/Head of BKPM in the form of letters of approval (SP), and conveyed to applicants with copied addressed to the institutions as meant in Article 6 paragraph (5) or Article 7 paragraph (5).
5. The expansion approval as meant in paragraph (5) shall be issued not later than 10 (ten) working days after the receipt of complete and correct applications. 
6. If within 3 (three) years after the date of issuance of SP-expansion there is no project realisation in concrete activities as meant in Article 3, the SP expansion shall be automatically cancelled.

 
 
 
 
  CHAPTER V

AMENDMENT OF CAPITAL INVESTMENTS PART ONE GENERAL 

REQUIREMENTS FOR AMENDMENT APPLICATIONS    

Article 16

1. Any amendment of project provisions under PMDN or PMA arrangements whose letters of approval ore issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case Chairman of BKPMD or Heads of Representative Offices of the Republic of Indonesia for PMA shall be obliged to obtain approval o the State Minister for Investments/Head of BKPM, or the Chairman of BKPMD.

2. The changes which shall obtain approval as meant in paragraph (I ) consist of :

a.      the change in project locations;

b.      the change in business lines and production;

c.       the change in employment of foreign personnel;

d.      the change in investments and sources of financing;

e.      the change in share ownership of PMA companies;

f.        the change in status of PMA into PMDN;

3. the purchase of shores of existing PMDN and non PM/VPMDN companies by PMA companies, foreign citizens and foreign statutory bodies;
4. the extension of project completion time;
5. the merger of companies.
6. Applications for the amendment of project provisions as meant in paragraph (2) shall be filed as follows:

1. to the State Minister for Investments/Head of BKPM, for those whose investment approval is issued by the State Minister for Investments/Head of BKPM;
2. to the Chairman of BKPMD, for those whose investment approval is issued by Governors/Heads of provincial regions in this case the Chairman of BKPMD;
3. to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD, for PMA whose investment approval is issued by Heads of Representative Offices of the Republic of Indonesia.

(4) Every application shall be signed by authorised corporate managers or executive directors or personnel authorised along with letters of power of attorney.
 

PART TWO

CHANGE IN LOCATIONS OF PROJECTS    

Article 17

(1) a. Applications for the change in locations to other provinces, for PMDN/PMA companies whose SP is issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD or Heads of Representative Offices of the Republic of Indonesia shall be filed to the State Minister for Investments/Head of BKPM or Chairmen of BKPMD in new locations.
 
 

b. Applications for the change in locations from regencies/municipalities to regencies/municipalities in one province for PMDN/PMA shall be directly filed to the Chairman of local BKPMD.
 
 

1. The applications for the change in project locations shall be filed in duplicate by using Model III forms according to the specimen in Attachment 8. 
2. Approval of applications for the change as meant in paragraph (1) letters a and b, which is issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD in the form of letters of approval shall be conveyed to applicants with copies addressed to the institutions as meant in Article 6 paragraph (5) for PMDN and Article 7 paragraph (5) for PMA.
3. The approval as meant in paragraph (3) shall be issued not later than 7 (seven) working days after the receipt of complete and correct applications.

 
 
 
 
  PART THREE CHANGE IN LINES OF BUSINESS AND PRODUCTION     Article 18

1. Appitcattons for the change In lines of business and production of PMDN/PMA companies whose letters of approval are issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD or Heads of Representative Offices of the Republic of Indonesia for PMA, shall be filed to the State Minister for lnvestments/Head of BKPM.
2. The applications for the change In fines of business and production as meant in paragraph (1) shall be filed in duplicate by using Model informs according to the specimen in Attachment 8.

(3) Approval of applications for the change as meant in paragraph (1) which is issued by the State Minister for in vestmen tslhlead of BKPM or GovernorsWeads of provincial regions in this case the Chairman of BKPMD in the form of letters of approval of the change in lines of business and production shall be conveyed to applicants with copies addressed to the Institutions as meant in Article 6 paragraph (5) for PMDN and Article 7 paragraph (5) for PMA.
 
 

(4) The approval as meant in paragraph (3) shall be issued not later than 7 (seven) working days after the receipt of complete and correct applications,
   

PART FOUR CHANGE IN EMPLOYMENT OF FOREIGN PERSONNEL     Article 19

1. Applications for the change in employment of foreign personnel, for PMDN/PMA companies whose letters of approval ore issued by the State Minister for lnvestments/Head of BKPM or Governors/Head of provincial regions in this case the Chairman of BKPMD or Heads of Representative Offices of the Republic of Indonesia for PMDN shall be filed to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD.
2. The applications for the change in employment of foreign personnel as meant in paragraph (1) shall be filed in duplicate by using Model III forms according to the specimen in Attachment 8.
3. Approval of applications for the change as meant in paragraph (1) issued by the State Minister for Investments/Head ofBKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD in the form of letters of approval of employement of foreign personnel shall be conveyed to applicants with copies addressed to the institutions as meant in Article 6 paragraph (5) for PMDN and Article 7 paragraph (5) for PMA.
4. The approval as meant in paragraph (3) shall be issued not later than 7 (seven) working days after the receipt of complete and correct applications.

 
 
  PART FIVE

CHANGE IN INVESTMENTS AND SOURCES OF FINANCING    

Article 20

1. PMDN/PMA companies changing their investments and sources of financing whose letters of approval are issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD or Heads of Representative Offices of the Republic of Indonesia for PMA shall be filed the State Minister for Investments/Head of BKPM or the Chairman of BKPMD. 
2. The change as meant in paragraph (1) shall be that causing a change in the facilities obtained and/or sources of financing in the framework of improving the capital structure.
3. The applications for the change as meant in paragraph (1) shall be filed in duplicate by using Model III forms according to the specimenen Attachment 8. 
4. Approval of applications for the change as meant in paragraph (1) which is issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this cose the Chairman of BKPMD in the form of letters of approval of the change in investments and sources of financing shall be conveyed to applicants with copies addressed to the institutions as meant in Article 6 paragraph (5) for PMDN and Article 7 paragraph (5) for PMA.
5. The approval as meant in paragraph (3) shall be issued not later than 7 (seven) working days after the receipt of complete and correct applications.

 
 
  PART SIX

CHANGE IN SHARE OWNERSHIP OF PMA COMPANIES    

Article 21

1. Applications for the change in share ownership of PMA companies whose letters of approval are issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD or Heads of Representative Offices of the Republic of Indonesia shall be filed to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD.
2. Applications for the change in share ownership of PMA companies shall be filed to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD to obtain approval.
3. Applications for the change as meant In paragraph (1) shall be filed in duplicate by using Model III forms according to the specimen in Attachment 8., and by enclosing
4. Approval of the applications for the change as meant paragraph (2) shall be issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD in the form of SP amendment shall be conveyed to applicants with copies addressed to the institutions as meant in article 7 paragraph (5).
5. The approval as meant in paragraph (3) shall be issued not later than 7 (seven) working days a/ter the receipt of complete and correct applications.

    PART SEVEN

CHANGE IN STATUS OF PMA COMPANIES INTO PMDN COMPANIES    

Article 22

1. Applications of PMA companies whose shares arc totally owned by Indonesian partners and whose letters of approval are issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD or Heads of Representative Offices of the Republic Indonesia for the change in status into PMDN companies shall be filed to the State Minister for Investment/Head of BKPM or the Chairman of BKPMD and the companies changin in status into PMDN companies must obtain approval from the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD. 
2. For PMA companies whose shares are totally owned by Indonesian, partners, the companies shall change in status into PMDN companies and must obtain approval from the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD. 
3. Applications for securing approval of the change in status as meant in paragraph (1) shall be filed in duplicate by using (4) Approval of the change as meant in paragraph (2) which is issued by the State Minister for Investmen tTHE Head of BKPM or Governors/Heads of Provincial Regions in this case the Chairman of BKPMD shall be conveyed to applicants with copies addressed to the institutions as meant in Article 7 paragraph (5). 
4. The approval as meant in paragraph (3) shall be issued not later than 7 (seven) working days after the receipt of complete and correct applications

  PART EIGHT

CHANGE IN STATUS OF PMDN OR NON-PMA/ PMDN COMPANIES INTO PMA COMPANIES    

Article 23

1. PMDN or non-PMA/PMDN companies already validated as statutory bodies whose shares are to be bought by PMA companies or foreign statutory bodies and/or foreign citizens shall file applications for approval of the change in status into PMA companies to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD. 
2. The purchase of shores of companies as meant in paragraph (1) shall be realised only if the business fields of the companies are not included in the negative list for investments whose corporate capital contains ownership of foreign citizens and/or foreign statutory bodies. 
3. Applications for the change in status of companies into PMA companies as meant in paragraph (1) shall be filed in duplicate by using Model III.B form according to the specimen in Attachment 10. 
4. Approval of the applications as meant in paragraph (3) which is issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPM in the form of letters of approval shall be conveyed to applicants with copies addressed to the institutions as meant in Article 7 paragraph (5). 
5. The approval as meant in paragraph {4) shall be issued not later than 10 (ten) working days as from the receipt of complete and correct applications.

 
  PART NINE

EXTENSION OF PMDN AND PMA PROJECT COMPLETION PERIODS

1. Any extension of periods of validity of project completion which are going to expire for PMDN or PMA companies not yet engaged in commercial production, shall obtain approval from the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD. 
2. Applications for the extension of project completion periods, for PMDN companies whose SP-PMDN/PMA is issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD or Heads of Representative Office of the Republic of Indonesia for PMA shall be filed in duplicate to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD.
3. The applications as meant in porogropt (2) shall befiled not later than 2 (two) weeks before expiration of validity periods of project completion by using Model III C forms according to the specimen in Attachment II.
4. The applications as meant in paragraph (2) can be filed in the case of the validity periods of project completion as contained in SP-PMDN or SP-PMA nearing their expiration and in the presence of concrete activities as meant in Article 3. 
5. Approval of the applications as meant in paragraph (3 issued by the State Minister for Investments/Head of BKPM or Governors/Heads of provincial regions in this case the Chairman of BKPMD in the form of SP-extension of validity period of projects shall be conveyed to applicants with copies addressed to the institutions as meant in Article 6 paragraph (5) for PMDN and Article 7 paragraph (5) for PMA. 
6. The approval as meant in paragraph (5) shall be issued not later than 7 (seven) working days after the receipt of complete and correct applications. 
7. The approval of extension of validity periods of project completion as meant in paragraph (5) shall at the same time extend the periods for importing machinery/equipment.

 
  PART TEN

MERGER OF COMPANIES    

Article 25.

1. Companies which carry on business activities as a result of merger shall obtain approval from the State Minister for Investments/Chairman of BKPM. 
    
2. The companies carrying on business activities as well as those planning to merge shall possess balance sheets, profitless statements covering the last 3 (three) accounting years. 
    
3. The status of merger companies shall be determined by the status of companies carrying on business activities :

a.       In the case of the companies carrying on business actiuities being PMDN companies and no foreign citizens and/or foreign statutory bodies and/or PMA companies becoming shareholders after merger, the status of companies shall remain PMDN.

b.       In the case of the companies carrying on business activities being PMDN companies and certain foreign citizens and/or forelan statutory bodies and/or PMA companies becoming shareholders after merger, the status of companies shall become PMA.

c.       In the case of the companies carrying on business activities being PMA companies, the status of companies shall remain PMA.

4. Companies carrying on business activities after merger with port of their shares being owned by foreign citizens and/or foreign statutory bodies and/or PMA companies shall not be allowed to operate in business fines included in the negative list for investments whose corporate capital contains ownership of foreign citizens and/or foreign statutory bodies. 
    
5. In the case of merging companies still having projects at the stage of evelopment/construction with part of machinery/equipment having been imported, the companies planning to carry on business activities shall first file applications for expansion of the business lines at the stage of construction.
    
6. The tax facilities received by the respective merging companies and not yet utilised shall be cancelled and cannot be further utilised by the companies carrying on their business activities. 
    
7. Applications for merger as meant in paragraph (1) shall be filed in duplicate by using Model III D forms according to the specimen in Attachment 12, to the State Minister for Investments/Head of BKPM and bu enclosingthe following documents :

a.       copies of articles of association and their amendments of the respective merging companies;

b.       copies of IUT for companies planning to carry on business activities, and those not yet possessing IUT need to enclose BAP from local BKPMD;

c.       minutes of RUPS on approval of merger from the respective merging companies;

d.       copies of LKPM of the latest period for PMA companies and PMDN companies planning to carry on business actluities.

8. Approval of the applications for merger as meant in paragraph (7) shall be issued by the State Minister for Investments/Head of BKPM in the form of SP to applicants with copies addressed to the institutions as meant in Article 6 paragraph (4) for PMDN and Article 7 paragraph (4) for PMA. 
    
9. The approval as meant in paragraph (8) shall be issued not later than 10 (ten) working days after the receipt of complete and correct applications.

    PART ELEVEN

CHANGE IN NAMES OF COMPANIES    

Article 26

1. Any change in names of PMA/PMDN companies whose letters of approval are issued by the State Minister for Investments/Head of BKPM or Governors/Heads of Provincial Regions in this case the Chairman of BKPMD or Heads of Representative Offices of the Republic of Indonesia for PMA shall be notified in writing to the State Minister for Investments/Head of BKPM or Governors/Heads of Provincial Regions in this cose the Chairman of BKPMD.
2. The written notifications as meant in paragraph (1) shall be submitted in single copies by enclosing the following documents:

1.       copies of amendment documents which mention the change in names of companies already validated by the Ministry of Justice, or

2.       documents of consensus between relevant parties, for PMA companies not yet obtaining validation from the Minister of Justice;

1. Based on the wttten notifications as meant in paragraph (2),the State Minister for Investments/Head of BKPM or Governors/Heads of Provincial Regions in this case the Chairman of BKPMD shall issue letters of change in names of companies to applicants with copies addressed to the institutions as meant in Article 6 paragraph (5) for PMDN and Article 7 paragraph (5) for PMA. 
2. The letters as meant in paragraph (3) shall be issued not later than 4 (four) working days after the receipt of complete and correct notifications.
    

PART TWELVE

CHANGE IN FORMS/PATTERNS OF PARTNERSHIP AND/OR BUSINESS PARTNERS ESPECIALLY FOR BUSINESS LINES REQUIRING PARTNERSHIP WITH SMALL-SCALE BUSINESSES            

Article 27

1. Any change in PMDN and PMA companies investing capital in business lines requiring partnership with small-scale businesses shall be obliged to obtain approval from the State Minister for Investments/Head of BKPM or Governors/Heads of Provincial Regions in this case the Chairman of BKPMD or Heads of Representative Offices of the Republic of Indonesia for PMA. 
2. Any change in forms/patterns of partnership and/or business partners which is made by companies as already mentioned in letters of approvals shall not be allowed to ignore partnership obligations already set forth and be notified in writing to the State Minister for Investments/Head of BKPM or Governors/Heads of Provincia I Regions in this cose the Chairman of BKPMD. 
3. The written notifications as meant in paragraph (2) shall be filed in single copies by enclosing :

a.       Reasons for the change in forms/patterns of partnership and/or business partners.

b.       Amendments to written agreements on partnership with small-scale businesses, containing among others names and addresses of relevant parties, partnership patterns to be applied, rights and obligations of relevant parties, pnd forms of fostering of small-scale businesses.

c.       Amendment to articles or minutes ofshoreholdergenerai meetings on inclusion of new small-scale businesses as shareholders in the case of partnership taking the form of shore participation.

d.       Duty stamped statements from :

1.       New small-scale business pertners that they have fulfilled the criteria for small-scale businesses as meant in Article I point 23;

2.       old small-scale business partners that they are prepored to withdraw themselves from business partnership (especially for non share participation partnership).

4. Based on the written notifications as meant in paragraph (3), the State Minister for lnvestments/Head of BKPM or Governors/Heads of Provincial Regions in this case the Chairman of BKPMD shall issue letters of the amendment to patterns ofpartnerhip to applicants with copies addressed to the institutions as meant in Article 6 paragraph (5) for PMDN and Article 7 paragraph (5) for PMA. 
5. The approval as meant in paragraph (4) shall be tuned not later than 4 (four) working days after the receipt of complete and correct applications.

  CHAPTER VI

CAPITAL INVESTMENT IMPLEMENTATION APPROVAL AND LICENCES PART ONE

IMPORT OF CAPITAL GOODS    

Article 28

(1) a. Application for approval of the import of capital gooda with focilities for PMDN and PMA companies whose letters of approval (SP) are issued by the State Minister for lnvestments/Head of BKPM and for PMA companies shall be filed to the State Minister for Investments/Head of BKPM.

b. Applications for approval of the import of capital goods with facilities for PMDN and PMA companief whose SP are issued by Governors/Heads of Provincial Regions in this case the Chairman of BKPMD shall be filed to the Chairman of BKPMD.

c. Applications for approval of the import of capital goods with facilities for PMA companies whose SP are issued by Heads of Representative Offices of the Republic of Indonesia shall be filed to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD.

(2) The applications as meant in paragraph (1) for new projects, expansion and diversification shall be filed In duplicate by using Model IV.A forms/master lists of capital floods according to the specimen in Attachment 13

(1) a. Approval of the import of capital goods with facilities based on the applications as meant in paragraph (1) point a. shall be issued by the State Minister for Investments/Head of BKPM on behalf of the Minister of Finance in the form of SP of customs facilities for capital goods with the master lists of capital goods attached, to applicants with copies addressed to the Director General of Customs and Excise, the Director General of Taxation, Directors General of technical ministries and the Chairman of BKPMD.
 
 

b. Approval of the import of capital goods with facilities based on the applications as meant in paragraph (1) point b. shall be issued by the Chairman of BKPMD for the Governor/Head of the first level region on behalf of the Minister of Finance for the State Minister for Investments/Head of BKPM in the form of SP of customs facilities for capital goods with the master lists of capital goods attached, to applicants with copies addressed to the State Minister for lnvestments/Head of BKPM, the relevant Governor/Head of the first leuel region, the regional office of the Directorate General of Taxation, the regional office of the Directorate General of Customs and Excise and regional offices of technical ministries.
 
 

a.       Approval of the import of capital goods with facilities based on the applications as meant in paragraph (1) point c. shall be issued by the State Minister for Investments/Head of BKPM on behalf of the Minister of Finance or the Chairman of BKPMD for Governors/Heads of Provincial Regions in the form of SP of customs facilities for capital goods with the master lists of capital goods attached, to applicants with copies addressed to the Director General of Customs and Excise, the Director General of Taxation, Directors General of technical ministries, Heads of Representative Offices of the Republic of Indonesia and the Chairman of BKPMD.

(4) The approval meant in paragraph (3) shall be issued not later than 10 (ten) working days after the receipt of complete and correct applications.
 
 

(5) The validity period of SP of customs facilities for capital good shall conform to the period of project completion.
 
 

1. Applications for change in approval of the import of capital goods already possessed shall be filed to the State Minister for lnvestments/Head of BKPM or the Chairman of BKPMD as meant in paragraph (1) and their approval shall be issued not later than 10 (ten) working days after the receipt of complete and correct applications.
2. 
    

3. If the capital goods (machinery/equipment) already imported as meant in aragraph (3) are to be exported, the relevant companies shall file applications to the Sitate Minister for Investments/Head of BKPM or the Chairman of BKPMD and later the State Minister for Investments/Head of BKPM or the Chairman of BKPMD shall issue recommendations for reexport.

 
 
 
 
  PART TWO

IMPORT OF BASIC/AUXILIARY MATERIALS    

Article 29

(1) a. Applications for approval of the import of basic/uxiliary materials with facilities for PMDN and PMA companies whose SP are lssueo by the State Minister for Investments/Head of BKPM shall be filed to the State Minister for Investments/Head of BKPM.
 
 

b. Applications for approval of the import of basic/auxiliary materials with facilities for PMDN and PMA companies whose SP are issued by the Governor/Head of Provincial Regions in this cose the Chairman of BKPMD shall be filed to the Chairman of BKPMD.
 
 

c. Applications for approval of the import of basic/auxiliary materials with facilities for PMDN and PMA companies whose SP are issued by Heads of Representative Offices of the Republic of Indonesia shall be filed to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD.

(2) The applications as meant in paragraph (1) for new prefects, expansion and diversification shall be filed in duplicate by using Model lV.B forms/master lists of basic/auxiliary materials according to the specimen in Attachment 14

(3) a. Approval of the import of basic/auxillary materials with facilities based on the applications as meant in paragraph (1) point a. shall be issued by the State Minister for Investments/Head of BKPM on behalf of the Minister of Finance in the form of SP of customs facilities for basic/auxiliary materials with the master lists of basic/auxiliary materials attached, to applicants with copies addressed to the Director General of Customs and Excise, the Director General of Taxation, Directors General of technical ministries and the Chairman of BKPMD.

b. Approval of the import of basic/auxiliary materials with facilities based on the applications as meant in paragraph (1) point b. shall be issued by the Chairman of BKPMD for the Governor/Head of the first level region on behalf of the Minister of Finance for the State Minister for Investments/Head of BKPM in the form of SP of customs facilities for basic/auxiliary materials with the master lists of basic/auxiliary materials attached, to applicants with copies addressed to the State Minister for Investments/Head of BKPM, the relevant Governors/Heads of Provincial Regions, the regional office of the Directorate General of Taxation, the regional office of the Directorate General of Customs and Excise and regional offices of technical ministries.

c. Approval of the import of. basic/auxiliary materials with facilities based on the applications as meant In paragraph (1) point a. shall be issued by the State Minister for lnvestments/Head of BKPM on behalf of The Minister of Finance or the Chairman of BKPMD for Governors/Heads of Provincial Regions on behalf of the the Minister of Finance in the form of SP of customs facilities for basic/auxiliary materials with the master lists of basic/auxiliary materials attached, to applicants with copies addressed to the Director General of Customs and Excise, the Director General of Taxation. Directors General of technical ministries, Heads of Representative Offices of the Republic of Indonesia and the Chairman of BKPMD.

(4) The approval as meant in paragraph (3) shall be issued not later than 10 (ten) working days after the receipt of complete and correct applications.

(5) Companies which have not yet possessed IUT, PMDN as well as PMA, shall be granted basic/auxiliary material import facilities for the need of I (one) year's production for an import period of I (one) year. Additional demand for basic materials for the second year can be met after companies have possessed IUT, by extending the import period for I (one) year starting from the expiration of

(6) Companies which have possessed IUT, PMDN as well as PMA, shall be granted basic/auxiliary material import facilities for the need of 2 (two) years production for an import period of 2 (two) years at the same time.
 

PA RT THREE

LIMITED IMPORTER'S IDENTIFICATION NUMBER (APIT)    

Article 30

(1) PMDN companies or PMA companies which will realise capital goods and or basic/auxiliary materials imports themselves shall possess the limited importer's identification number (APIT).

(2) a Application for APIT as meant in paragraph (1) for componies whose SP are issued by The State Minister for Investments/Head of BKPM shall be filed to the State Minister for Investments/Head of BKPM

b. Applications for APIT as meant in paragraph (l), for companies whose SP are issued by Governors of Provincial Regions in this case the Chairman of BKPMD shall be filed to the Chairman of BKPMD.

c. Applications for APIT as meant in paragraph (1), for companies whose SPare issued by Heads of Representative Offices of the Republic of Indonesia shall be filed to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD.

(3) The aplications as menot in paragraph (2) shall be filed in duplicate by using APT forms according to the specimen in Attachment 15

(4) a. APIT as mearit in paragraph (2) point ti shall be issued by the State Minister for Investments/Head of BKPM on behalf of the Minister of Industry and Trade in the form of APIT decrees (SK-APIT) to applicants with copies addressed to the Minister of Industry and Trade, the Director General of Foreign Trade for the attention of the Director of Imports, Bank Indonesia Exim division, the Director General of Customs and Excise, the Director General of Taxation, the regional office of the Ministry of Industry and Trade and the Chairman of BKPMD.

b. APIT as meant in paragraph (2) point b. shall be Issued by the Chairman of BKPMD for the Governor/ Head of the provincial region on behalf of the Minister of Industry and Trade for the State Minister for Investments/Head of BKPM in the form of SK-APIT, to applicants with copies addressed to the State Minister for Investments/ Head of BKPM, the Director General of Foreign Trade for the attention of the Director of Imports, the Governor/Head of the provincial region, local Bank Indonesia, the Head of local regional office of the Directorate General of Taxation, the local regional office of the Directorate General of Customs and Excise the local regional office of the Directorate General of Taxation, and the local regional office of the Ministry of Industry and Trade.

c. APIT as meant in paragraph (2) point a. shall be issued by the State Minister for lnvestments/Head of BKPM on behalf of the Minister of Industry and Trade in the form of SK-APIT to applicants with copies addressed to the institutions as meant in paragraph (4) letter a, and or issued by the Chairman of BKPMD for the Governor/Head of the Provincial Region on behalf of the Minister of Industry and Trade for the State Minister for Investments/Head of BKPM in the form of SK-APIT to applicants with copies addressed to the institutions as meant in paragraph (4) letter b.

(5) The APIT as meant in paragraph (4) shall be issued not later than 5 (five) marking days after the receipt of complete and correct applications.

(6) APIT shall be valid as of the stipulation dote and for the entire territory of the Republic of Indonesia as long as the companies concerned ore still engaged in production.

(7) Companies whose activities belong to the field of trading services planning to import goods for their trading shall have their APIT effective also as the general importer's identification number (APIU), and in the case of APIT not yet being obtained they shall apply for APIT, which at the same time applies as APIU.  

(8) In the case of any change in names, addresses and boards of executive directors of companies or those signing import documents, the companies as meant in paragraph (2) shall file applications to the State Minister for Investments/Head of BKPM for approval of APIT amendments and/or the Chairman of local BKPMD.
  

PART FOUR

EXPATRIATE WORK PERMITS    

Article 31.

(1) PMDN or PMA companies planning to employe expatriates shall have the plan for employment of foreign personnel (RPTK)

(2) a Applications for approval of the plan for employment of foreign personnel (RPTK), for companies whose SP are issued by the State Minister for Investments/Head of BKPM shall be filed to the State Minister for Investments/Head of BKPM.

b. Applications for the plan for employment of foreign personnel (RPTK), for companies whose SP ore issued by the Governor/Head of the Provincial Region in this case the Chairman of BKPMD shall be filed to the Chairman of BKPMD.

c. Applications tor approval of the plan for employment of foreign personnel (RPTK), for companies whose SP are issued by Heads of Representative Offices of the Republic of Indonesia shall be filed to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD.  

(3) The applications for approval as meant in paragraph (2) shall be filed by using RPTK forms and observe the provisions of the Ministry of Manpower according to the specimen in Attachment 16.  

(4) a. RPTK approval of the applicatlons as meant in paragraph (2) letter a. shall be issued by the State Minister for InvestmentsWead of BKPM on behalf of the Minister of Manpower in the form of RPTK decrees, to applicants with copies addressed to the Ministry of Manpower, relevant technical ministries and the local BKPMD.

b. RPTK approval of the applications as meant in paragraph (2) letter b. shall be issued by the Chairman of BKPMD for the Governor/Head of the provincial region on behalf of the Minister of Manpower for the State Minister for Inuestmerits/Head ofBKPM in the form of RPTK decrees, to applicants with copies addressed to the State Minister for Investments/Head of BKPM, the Governor/Head of the first level region, fhe regional office ot the Ministry of Manpower and regional offices of relevant technical ministries.

1. The approval as meant in paragraph (3) shall be issued not later than 4 (four) working days after the receipt of complete and correct applications.

  Article 32

(1) Expatriates (TKWNAP) of PMDN companies and PMA companies as well as regional representative offices of foreign companies (KPWPA) who are ready to leave for Indonesia shall possess visas for limited stay (VITAS) issued by representative offices of the Republic of Indonesia abroad.

(2) In order to obtain VITAS as meant in paragraph (1), companies shall have TA.OI recommendations from BKPM or BKPMD.

(3) a. Applications for TA.01 recommendations for com panies whose RPTK decrees are issued by the State Minister for Investments/Head of BKPM shall be filed to the State Minister for Investments/Head of BKPM.

b. Applications for TA.OI recommendations for companies whose SP-RPTK decrees are issued by the Chairman of BKPMD shall be filed to Governors/Heads of Provincial Regions in this case the Chaiman of BKPMD.

(4) The applications as meant in paragraph (3) shall be filed in single copies by using PPt.2 forms according to the specimen in Attachment 17.

(5) a. TA.OI recommendations based on the applications as meant in paragraph (3) letter a. shall be issued by the Director of Licensing and Facilities of BKPM to the Director General of Immigration.

b. TA.OI recommendations based on the applications as meant in paragraph (3) letter b. shall be issued by the Chairman of BKPMD to the Director General of Immigration.

(6) The recommendations as meant in paragraph (5) shall be issued not later than 4 (four) working days after the receipt of complete and correct applications.

(7) The Director General,of Immigration based on the TA.OI recommendations as meant in paragraph (5) shall notify representative offices of the Republic of Indonesia in order to issue VITAS to the relevant TKWNAP.  

Article 33  
 

The relevant comoanies shall file aDoHcations for the issue of limited stay permit cards (KITAS) to the local immigration offices by using KITAS forms and enclosing evidences of embarkation cards according to effective provisions after the arrival of TKWNAP with VITAS.

  Article 34

1. TKWNAP who haw obtained KITAS and will work in Indonesia shall apply for expatriate work permits (IKTA).
2. Applications for IKTA shall be filed by sponsors to the Chairman of local BKPMD or to the State Minister for Investments/Head of BKPM for TKWNAP located in more than one province or for KPWPA, by using Ppt.2 forms according to the specimen in Attachment 17.
3. Approval of the applications as meant in paragraph (2) shall be issued by the Chairman of BKPMD for the State Minister for Investments/HHead of BKPM on behalf of the the Minister of Manpower in the form of IKTA decisions and legitimation books to applicants with copies addressed to the local office of the Ministry of Manpower.
4. The approval as meant in paragraph (3) shall be issued not later than 4 (four) working days after the receipt of complete and correct applications. 
5. In the case of TKWNAP working in more than one provinces or KPWPA, IKTA and extension decrees shall be issued by the State Minister for Investments/Head of BKPM on behalf of the Minister of Manpower.

Article 35

1. Applications for the extension of IKTA as meant in Article 33 paragraph (3) shall be filed in single copies by using Ppt.2 forms according to the specimen in Attachment 17, to the Chairman of local BKPMD within 30 (thirty) days before the IKTA of relevant IKWNAP expire. 
2. Based on approval of the applications as meant in paragraph (1), the Chairman of BKPMD shall issue recommendations for the handling of KITAS extension to the local immigration office by using model TA.02.
3. Pending the extension of KITAS, the Chairman of local BKPMD shall issue provisional IKTA certificates effective for 2 (two) months by using model TA.04.
4. The recommendations and provisional IKTA certificates as meant in paragraphs (2) and (3) shall be issued not later than 4 (four) working days starting from the receipt of complete and correct applications.
5. Based on approval of the KITAS extension as meant in paragraph (2), relevant companies shall submit copies of the 
6. Based on the KITAS copies as meant in paragraph (5), decisions on IKTA extension shall be issued by the Chairman of BKPMD for the State Minister for Investments/Head of BKPM on behalf of the Minister of Manpower.
7. The decisions on extension as meant in paragraph (6) shall be issued not later than 4 (four) working days starting from the receipt of complete and correct applications. 
8. Relevant Companies shall file applications to the State Minister for Investments/Head of BKPM or the Chairman of BKPMD in the case of any change in the use of TKWNAP whose posts are transferred and sponsors or locations changed.

Article 36

1. TKWNAP other than executive directors and board members already working for 3 (three) consecutive years in Indonesia shall leave the territory of Indonesia with the status of exit permit only (EPO). 
2. If the TKWNAP as meant in paragraph (l) are still needed by relevant companies, sponsor companies shall enter a new procedure by using TA.OI recommendations as meant in Article 31 paragraph (4), On the basts or valid RPTK complete with copies of EPO papers.

Article 37

TKWNAP employed by sponsor companies as well as contractors only in the Period of construction/physical development of factories (erectors) including instalation of machinery, shall have their RPTK validation and IKTA applied for to the Ministry of Manpower in this case the Director General of Manpower Employement.

 
  CHAPTER VII

CAPITAL INVESTMENTS IN BONDED ZONES AND IN INTEGRATED ECONOMIC DEVELOPMENT ZONES (KAPET)     Article 38

1. Applications for capital investments located in bonded zones and in KAPET PMDN as well as PMA, shall be filed to bonded zone operating companies or KAPET managing bodies (BP-KAPET). 
2. Bonded zone operating companies or BP-KAPET already delegated the appropriate authority shall evaluate applications for new projects, expansion and amendments under PMA arrangements located in bonded zones or in KAPET, and grant approval on behalf of the State Minister for Investment/Head of BKPM. 
3. Bonded zone operating companies or BP-KAPET already delegated the appropriate authority shall evaluate applications for new PMA located in bonded zones or in KAPET and results of evaluation of the applications shall be delivered to the State Minister for Investments/Head of BKPM, who later issues approval of the applications and convey the approval to apilicants in the form of SP through Bonded zone operating companies or BP-KAPET. 
4. Bonded zone operating companies or BP-KAPET already delegated the appropriate authority shall evaluate applications for investment implementation licences needed and issue, approval of the applications to be delivered to applicants in the form of SR.

CHAPTER VIII

SANCTIONS    

Article 39

    In the case of applicants for approval of capital investments purposely falsifying data and or documents enclosed, the relevant applications shall become unlawful and the approval issued by the government shall be cancelled, and the parties concerned be liable to legal sanctions pursuant to the provisions in force.
 

  CHAPTER IX

MISCELLANY    

Article 40    

Except SP PMDN, SP-PMA, any approvat, llcence or decision/decree whose period of validity is determined shall be automatically cancelled on the date of expiration of the approval, licence or decision/decree unless its extension is approved by the State Minister for Investments/Head of BKPM or the Chairman of BKPMD for investments whose implementation licences are issued by the State Minister for Investments/Head of BKPM or the Chairman of BKPMD.
 

  CHAPTER X

TRANSITIONAL PROVISIONS    

Article 41

Applications which have already been filed to BK.PM before the stipulation of this decree shall be settled according to old provisions.

  Article 42

1. Based on SP-PMDN and SP-PMA issued by the State Minister for Investments/Head of BKPM before the date of stipulation of this decree, applicants shall continue to file applications for expansion, amendments and implementation licences to the State Minister for Investments/Head of BKPM. 
2. Based on SP-PMDN already issued hy the Chairman of BKPMD before the date of stipulation of this decree, applicants shall file applications for expansion, amendments and implementation licences to the Chairman of BKPMD. 
3. Applications for investments and implementation licences filed after the date of stipulation of this decree, shall be settled on the basis of this decree.

CHAPTER XI

CONCLUSION    

Article 43

1. With the enforcement of this decree, all provisions which are not in line with or contradict this decree shall be declared null and void. 
2. Matters which are not yet regulated in this decree shall be further stipulated by decrees of the State Minister for Investments/Head of BKPM. 
3. This decree shall come into force as from the date of stipulation

Stipulated In Jakarta. On October 6,1999

THE STATE MINISTER FOR INVESTMENTS/

HEAD OF THE INVESTMENT COORDINATING BOARD
   

sgd.
 
 
 

ZUHAL