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y the end of this month, investors intending to open a factory with investment of at least Rp 100 billion (US$ 7.4 million) will be able to obtain the required investment permit in just three hours.

Investment Coordinating Board (BKPM) head Franky Sibarani said on Monday that he would kick off the three-hour licensing service on Oct. 26 to attract more big investors to open factories in Indonesia.

To ensure that the service was implemented on schedule, BKPM had set up the standard operating procedure (SOP) for service and would soon recruit two in-house notaries, he said.

'€œWe are working with the Law and Human Rights Ministry to select the notaries,'€ Franky told a press briefing in South Jakarta. The two notaries, who would be selected from as many as 32 notaries who took part in the recruitment, were expected to be able to offer their services at the BKPM'€™s one-stop integrated services (PTSP) on Oct. 20, he added.

The permits, which would be issued in three hours, include a principal investment permit from BKPM, a company deed and its legalization by the Law and Human Rights Ministry and taxpayer number (NPWP).

The new process will require the proposed companies'€™ shareholders to be physically present during the signing of the deeds before an in-house notary. Otherwise, they can grant power of attorney letters to proxies to sign the deeds.

To be able to enjoy the quick-licensing program, investors should invest at least Rp 100 billion and employ at least 1,000 workers.

Franky said that after obtaining these permits, investors whose projects were located within industrial estates designated by the BKPM, could start project construction immediately, even before the issuance of a construction permit from the local government.

According to him, to be able to begin construction works, the investors only needed to sign a letter stating that they would be able to obtain the required licenses before commercial production started. However, he said projects outside the industrial areas would still need to obtain a construction permit before commencing construction.

Franky said that to benefit from the fast-track program, industrial estates should have no issues surrounding their land status and environmental impact analysis (AMDAL). Governor and regents where the industrial areas were located should endorse the fast-track policy, he added.

'€œWe do hope to determine the areas soon and commence the pilot project in November,'€ Franky said.

Meanwhile, Agrarian and Spatial Planning Minister Ferry Mursyidan Baldan said that his office would simplify agrarian permits to support the three-hour service.

'€œWithin three hours, the National Land Agency (BPN) will grant a land booking letter to the investors, who have 14 days to conclude the [acquisition] process,'€ he was quoted as saying in a statement issued by the BKPM on Monday.

The three-hour licensing policy, which aimed at cutting red tape and boosting investment, was a part of the government'€™s second economic policy package announced on Sept. 29.

Separately, Indonesian Institute of Sciences (LIPI) economist Latif Adam told The Jakarta Post that permit simplification was a positive approach by the government because the country'€™s long licensing process was one of many factors hampering investment.

'€œHowever, the service is not the end of the story. The government still needs to strengthen other factors, such as infrastructure, quality of human resources and synchronization between the government and local administrations,'€ he said over the phone.

He expressed concern that investors might only benefit from the fast-track services at the national level and would still face difficulties at the local level.

'€œThe government and local administrations must have one vision so that the policy effectively attracts investment,'€ he said.

Franky stated that ministries and institutions that had delegated their licensing authorities to local governments would take back authority if the latter could not process the permits according to the time limit.

The Home Ministry has ensured that governors and regents will support the fast-track policy. (prm)
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