Obtaining KKPR for Business Actors

“KKPR is one of the main prerequisites of obtaining an NIB. KKPR can be issued in either one of these forms, namely KKKPR and PKKPR. A KKKPR shall be issued based on the conformity of the location plan of the Space Utilization Activities with the Detailed Spatial Plan which has been integrated with the OSS system. Meanwhile, a PKKPR can be issued under two conditions, which are issuance without assessment and issuance with spatial assessment.”

Regulated in Government Regulation No. 5 of the Year 2021 (“GR 5/2021”), the Suitability of Space Utilization Activities (Kesesuaian Kegiatan Pemanfaatan Ruang – “KKPR”) is one of the basic business licensing instruments which confirms the conformity between a Space Utilization activity plan with the spatial plan as mandated by the Minister of Agrarian Affairs and Spatial Planning / Head of the National Land Agency (“Minister”). Such conformity is necessary in order to obtain a business license (“NIB”) by business actors. As a Single Reference for space utilization and issuance of land rights, KKPR has streamlined the process of business licensing in Indonesia.

KKKPR, PKKPR, and Location Permit

As mandated in Article 6 of Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency Regulation Number 13 of the Year 2021 (“Minister Regulation 13/2021”), a Confirmation on the Suitability of Space Utilization Activities (Konfirmasi Kesesuaian Kegiatan Pemanfaatan Ruang – “KKKPR”) shall be issued under these following steps:

• Registration;
• Assessment of proposed documents for Space Utilization Activities towards the Detailed Spatial Plan; and
• Issuance of KKKPR by the Minister.

A KKKPR shall be issued based on the conformity of the location plan of the Space Utilization Activities with the Detailed Spatial Plan which has been integrated with the OSS system.

An Approval on the Suitability of Space Utilization Activities (Persetujuan Kesesuaian Kegiatan Pemanfaatan Ruang – “PKKPR”) shall be issued if a Detailed Spatial Plan is not available or the available Detailed Spatial Plan has not been integrated to the OSS system. A PKKPR shall be issued under these following steps:

• Registration;
• Assessment of proposed documents for Space Utilization Activities towards the Spatial Planning, Zoning Plan for Certain National Strategic Areas (RZ KSNT) and Zoning Plan for Interregional Areas (RZ KAW); and
• Issuance of PKKPR by the Minister.

Before Minister Regulation 13/2021 came into force, KKPR was named as Location Permit. After Minister Regulation 13/2021 came into force, Location Permits which were issued beforehand shall be in force until the expiration of said permit (Art. 85 letter a Minister Regulation 13/2021).

KKPR issuance is one of the prerequisites in obtaining a business license, thus shall apply to all Risk Categories.

KKPR for Micro and Small Business

In terms of business size, the KKPR licensing regime for Micro and Small businesses is different than Medium and Large sized businesses. According to Article 115 of Government Regulation Number 21 of 2021 on The Organization of Spatial Planning (“GR 21/2021“) business actors of Micro and Small business categories are only required to submit a Self-Declaration which is integrated in the OSS system in which the business actor declares that the business location is in accordance with the spatial plan and is willing to be sanctioned in accordance with applicable regulations if in the future non-conformity is found.

PKKPR Application

A PKKPR can be issued under two conditions, which are issuance without assessment and issuance with spatial assessment.

1. Issuance without assessment

The issuance of PKKPR in which the OSS system would automatically issue a the said permit shall be conducted under these terms as stipulated under Article 181 of GR 5/2021:

1. The location of the business and/or activity is located in a Special Economic Zone (Kawasan Ekonomi Khusus – “KEK”) or an industrial zone;
2. The location of the business and/or activity is required for the expansion of an existing business and the land is located adjacent to the location of the business and/or activity concerned with the same spatial designation;
3. The location of the business and/or activity is a land already controlled by other business actors who have obtained the suitability of space utilization activities and will be used by the concerning business actor;
4. The location of the business and/or activity is located in an oil and gas business that has been determined by the government; and/or
5. The location of the business and/or activities originates from an authority or organizing body for the development of an area in accordance with the spatial plan of the development area.

2.  Issuance with spatial assessment

1. The issuance of PKKPR takes into account the results of studies using the Tiered and Complementary Principles, Land Technical Considerations and can be given with consideration of the Spatial Planning Forum.
2. Land Technical Consideration related to the Business Location is carried out by the Land Office.

Issuance of PKKPR shall take 20 (twenty) working days (including 10 working days of Land Technical Considerations)  after the permit application documents are deemed to be complete and the payment of Non-tax State Revenue (Penerimaan Negara Bukan Pajak – “PNBP”) has been paid and received.

PKKPR Requirements and Term of Validity

As regulated under Article 108 GR 21/2021, to registration for PKKPR, a business actor should fulfill these following documents:

1. Location coordinates;
2. Land area requirements for Space Utilization Activities;
3. Land ownership information;
4. Business type information;
5. Building floor plan; and
6. Building technical plan and/or area master plan.

The issuance of PKKPR contains the minimum of these following information under Article 15 para. (1) Minister Regulation 13/2021:

1. Location of the activity;
2. Type of space utilization designation;
3. Basic building coefficient;
4. Building floor coefficient;
5. Indication of space utilization program; and
6. Requirements for the implementation of space utilization activities.

KKPR Validity

Article 18 and 19 of Minister Regulation 13/2021 regulates the Term of Validity of the KKPR. For KKPR applicants who have yet to own a land in order to conduct their business, KKPR shall be valid for three years. If a KKPR applicant has obtained a land to conduct business, the Term of Validity shall follow the period of land tenure that has been obtained by the applicant and in accordance with the land area that is obtained and approved in the KKPR.

Extension of KKPR

As stipulated in Article 20 of Minister Regulation 13/2021, if a KKPR holder has yet to obtain the required land to conduct business then the KKPR holder can apply for either an application to extend the KKPR to conduct business or to conduct a cooperation with a Land Bank. These conditions apply for the extension of KKPR:

1. Shall be applied at maximum three months before the expiration date;
2. Can only be applied if the land acquisition has reached at least 30% of the approved land area in one stretch in accordance with an assesment from the land office;
3. The applicant has to input KKPR number in the OSS system;
4. The Term of Validity after the extension is two years and cannot be extended and the applicant can no longer apply for cooperation with the Land Bank.

Author: Muhammad Faishal Hakim

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