Licensing and Establishment of Freight-Forwarding-Service Branch Offices Updated

The Minister of Transportation(“Minister”)has issued Regulation No. PM 12 of 2016 (“Third Amendment”),which amends Regulation No. PM 74 of 2015 (“2015 Regulation”)on the Organization and Management of Freight-Forwarding Service Businesses.In essence, the Third Amendment redefines three main provisions relating to: 1) the authority of the Indonesian Investment Coordinating Board(“BKPM”)to supervise the opening of new branches of freight-forwarding service businesses; 2) the validity of freight-forwarding service business licenses; and 3) leniency under certain conditions for freight-forwarding service businesses which do not satisfy the minimum capital-threshold requirements for the securing of business licenses.Prior to the Third Amendment, the 2015 Regulation was previously amended twice, first by Ministry Regulation No. PM 78 of 2015 (“First Amendment”) [1] and then by Ministry Regulation No. PM 146 of 2015 (“Second Amendment”). [2] This Third Amendment is of relevance to already existing freight-forwarding service businesses, as well as to parties wishing to become involved in the sector.Business Licenses and Initial CapitalBefore being allowed to provide services and deliver goods, any newly established freight-forwarding service business (“Business”) must first secure a business license from the governor of the area in which the Business is located (for domestic Businesses) or from the BKPM (for joint-venture or foreign-direct-investment companies). [3] In order to secure a Business License, a Business must satisfy both the administrative and technical requirements set out below: [4]