The government, determined to create a friendly investment climate to compete with neighboring countries, released Thursday a policy package, which includes a ruling to reduce business licensing from 150 days to 30 days.

An official at the Office of the Coordinating Minister for the Economy, Janes Hutagalung, said cutting the licensing time could be done by delegating the authority over the licenses to the provincial offices of the Law and Human Rights Ministry.

"A one-stop service for investors would also be part of the new ruling," he said, while adding that the licensing time was a part of the new investment policy.

In addition to cutting the licensing time, the government also is considering a draft amendment to the Investment Law, to formally regulate equitable treatment for foreign investors.

Janes stated that the policy package, regulated under the Presidential Instruction No. 3/2006, would also rule on some other new regulations such as customs and excise, taxation, and work permits, as well as domestic small and medium enterprises.

For the customs and excise sector, the government will shorten cargo processing at harbors and international airports, in preparation for the Single Window trade agreement, which will go into effect by 2008.

Janes contended that cargo processing in harbors, which now averages 30 days, which greatly increases the cost of doing business, would be cut down to only seven days.

Meanwhile in the labor sector, the government would make an attempt to simplify the procedures for issuing visas and stay permits to foreign investors, to shorten the time for the "competence certification" documents from over a month to two weeks, and to reduce the time for professional accreditation documents from 23 days to two weeks.

Each policy package would be handled by a related ministry, and therefore, Janes claimed, the public could also monitor the government's performance. (06)

Policy action package to improve investment climate

General:

Improving investment-related services through the implementation of the new Investment Law.

Harmonizing regulations between the central government and local administrations.

Improving the Environmental Impact Assessment (Amdal) requirements for investment projects.

Customs and Excise:

Improving the flow of goods through simpler customs procedures and shorter cargo handling time.

Developing the role of bonded zones.

Eradicating smuggling.

Streamlining bureaucracy at the excise office.

Taxation:

Providing tax incentives for investments in certain sectors and provinces, particularly in Indonesia's eastern regions, and those having partnerships with SMEs.

Revision of value-added taxes on certain goods to promote exports.

Promoting transparency at the tax office.

Improving the self-assessment tax procedure.

Protecting taxpayer's rights.

Labor:

Creating a more flexible and productive labor market.

Improving the settlement of labor disputes.

Simplifying the processing of foreign work permits.

Establishing an industrial relationship that encourages more employment.

Developing transmigration programs to encourage more employment.

Protecting and empowering migrant workers.

SMEs:

SME procedures that encourage wider participation in investment projects.