The Job Creation Law Trims Investment Barrier Permits

By: Zakaria )*

A businessman can find it difficult because he has to arrange a SIUP with many requirements and a long waiting period. To solve this problem, the government inaugurated the omnibus law of the Job Creation Law on October 5, 2020. Business licensing has been replaced by a risk-based, not permit-based, system.

As many as 90% of business actors in Indonesia are still in the small and medium level (UMKM). So far they want to improve their business, by obtaining a SIUP (trading business license. However, unfortunately, making this SIUP is tortuous, because they have to deposit files in the form of KTP, NPWP, and other official documents. After filling in the form and paying, the permit cannot be done directly. Exit.

The standard waiting period for this business license is only 2 weeks, but can be delayed from 1 month to even 1 year. I don’t know what the cause is, it could be from the many queues for licensing forms or some games from unscrupulous people. They can promise that the permit will be issued quickly as long as there is a facilitation payment. Practices like this that foster corruption, which President Jokowi will cut.

As a solution, the government formalized the omnibus law on the Job Creation Law. In this Ung Law there is a cluster of ease of doing business that can guarantee all people to run their business smoothly, and get permits in a short time. Because the government wants more and more young entrepreneurs, which makes the world of commerce even more enthusiastic.

If in the past when you were going to get a license you had to have a SIUP, now it is being replaced by a risk-based business license system. This is regulated in article 6 letter a of the Job Creation Law. Determination of risk level and business scale based on the aspects of safety, environment, health, and resource management.

In the sense that if it is a low-risk business such as a grocery store or small restaurant, then there is no need to apply for SIUP. However, these MSME entrepreneurs need to make NIB (business registration number) as business legality. Management can also be done online. When it comes to processing credit from a bank, it will be easier for them because they already have an NIB.

According to Home Affairs Minister Tito Karnavian, the ease of doing business cluster would be very good, especially in the regions. Because there are still many young people who want to formalize their business but are constrained by costs and the long process. In the future there will be more and more businesses that will grow in the regions and Indonesia has many brilliant businessmen.

Tito continued, there will be a government regulation that explains what businesses can be simplified in licensing, as well as investment. He compared it with the situation in other countries such as New Zealand and Singapore where business permits can be issued quickly, even in a matter of hours. Meanwhile, in Indonesia it can take a long time and be tormented by many elements.

If there is convenience in obtaining a permit, then the youth will not be confused about looking for job vacancies, because they will choose to open their own business. So far, in Indonesia there are only 3% of entrepreneurs, even though this number is still very low. Compare with Singapore which reached 7%. Even though our population is much larger.

If there are more entrepreneurs, it will have a positive impact, because they can recruit employees. So that the number of unemployed will decrease drastically. MSME entrepreneurs have been the backbone of the economy in Indonesia. No wonder the government appreciates them by providing facilities for business licenses in the omnibus law of the Job Creation Law.

The Easy Cluster Job Creation Law tries to make small business people get business legality easily and quickly. They don’t have to apply for a SIUP but only need an NIB as an official permit. By pocketing the NIB, it will make it easier to apply for credit to the bank, as well as increase consumer confidence.

)* The author is a citizen living in Bogor

BarrierInvestmentJob Creation LawPermitsTrims
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