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Jobs law regulations aim to boost small businesses
Indonesian government and private sector are required to allocate 30 percent of their commercial areas, shopping centers and public infrastructure, such as airports and rest areas, for small businesses.
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Fishermen sort their catches at the Muara Angke Wholesale Fish Market in North Jakarta on Jan. 23. (JP/Ricky Yudhistira)
T
he government’s newly issued regulations derived from the Job Creation Law are expected to improve the business climate for pandemic-wracked micro, small and medium enterprises (MSMEs) by easing licensing processes and facilitating demand.
For example, under Government Regulation No. 7/2021, the government and regional administrations are obligated to allocate 40 percent of their goods- and services-procurement budget for small businesses.
Meanwhile, ministries and state-owned, regional-owned and private enterprises, should also allocate 30 percent of their commercial areas, shopping centers and public infrastructure, such as airports and rest areas, for promotional and business development spaces for small businesses, the regulation stipulates. The rent for such space is capped at 30 percent of the commercial rental price.
MSMEs should also be able to obtain a business registration number (NIB) within three hours via the online single submission (OSS) platform, depending on the risk level of their business, according to Investment Coordinating Board (BKPM) head Bahlil Lahadalia. The NIB will also make it easier for the MSMEs to secure financing from banks, he said.
“For those with low risk [businesses], the NIB will be sufficient,” Bahlil said in a virtual briefing on Wednesday. “The BKPM’s focus on improving the competitiveness of MSMEs is offering [easier] business licensing and incentives.”
Bahlil also said the government aimed to facilitate small businesses in obtaining environmental permits if their business had a medium or high risk in regard to health, safety and the environment.
The jobs law has revised 79 prevailing laws in order to improve the country’s ease of doing business and to attract investment.
