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IFC Helps Indonesia Streamline Business Registration and Licensing to Improve Investment Climate


IFC:


Fararatri Widyadari
Phone: +62 21-2994-8001
E-mail: FWidyadari@ifc.org

Jakarta, Indonesia, 26 March 2014—IFC, a member of the World Bank Group, has advised the Provincial Government of Jakarta and Indonesia’s Ministry of Law and Human Rights, on streamlining business registration and licensing procedures – measures that aim to improve Indonesia’s investment climate and attract more foreign investment.

IFC, the Jakarta government and the ministry highlighted today recent reforms aimed at improving the ease of doing business for Indonesian entrepreneurs. Improving investment climate is among the Indonesian government’s top priorities as it develops the country’s private sector to propel economic growth.

IFC has supported the ministry in improving the processes related to establishing limited liability companies, enabling the ministry to launch the so-called Ditjen AHU online system and issue supporting regulations.

“The Ditjen AHU online system will revolutionize the way we deliver public services,” said Freddy Harris, Head of the Secretariat for the Director General of General Legal Affairs with the Ministry of Law and Human Rights. “The public can now apply online to reserve a company name and legalize the establishment of a limited liability company. These procedures used to take more than a week. Now they can be completed online in a matter of minutes.”

IFC has also supported the Jakarta government’s efforts to streamline business registration and licensing, leading to the enactment of rules regulating so-called one-stop shops where businesses can take care of numerous government approval procedures at a single location. The new regulation allows one-stop shops to process and issue licenses directly rather than merely serving as a front office with the approval authority still lying with the technical agencies. For example, general trading licenses (SIUP) and business registration certificates (TDP) can now be processed and issued within three days.  

“The new regulation marks a new chapter in licensing simplification in Jakarta,” said Denny Wahyu Haryanto, Head of the Organization and Procedure Bureau of the Jakarta Provincial Government. “It will enable one-stop shops to provide more efficient services to the public.”

The reforms by the two government agencies, if implemented effectively, are expected to reduce the time needed to start a business in Jakarta to 21 days, down from 48 days currently.

“We applaud the government’s efforts in introducing reforms in Jakarta and nationally to remove red tape and improve public services and the investment climate,” said Sarvesh Suri, IFC Indonesia’s Country Manager. “We are confident that the government will continue to push for more reforms to show its commitment to creating a more competitive environment for businesses.”

About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.
       
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