the Ease of Doing Business in Indonesia Improvement of the Ease of Doing Business in Indonesia

Improvement of Doing Bussiness Target of DB 2017; Presiden is looking the country to achieve 40th position Doing Business 2017 Comparison of Doing Business Regulation in 190 countries on 10 indicators performed by IFC/World Bank (Starting A Business, Dealing with Construction Permit, Getting Electricity, Registering Property, Getting Credit, Protecting Minority Investors, Paying Taxes, Trading Across Borders, Enforcing Contract, and Resolving Ensolvency). DB 2017 Report Indonesia is Top Reformer country based on improvement made in 7 indicators of Ease of Doing Business (starting a business, getting electricity, registering property, getting credit, paying taxes, trading across borders and enforcing contracts). From 190 countries surveyed, 139 countries made improvements to all indicators. Indonesia’s ranking jumped 15 places to 91th position from 109th in the previous DB 2016 (or 106 after data adjustment). Target Doing Business 2018 35th position on Government Work Plan (RKP) 01

Indonesia's Position on 10 Indicators Doing Business 2017 Indonesia's Position on 10 Indicators Indikator DB 2017 DB 2016 Perubahan 91 106 15 Starting a Business 151 167 16 Dealing with Construction Permits 116 113 3 Getting Electricity 49 61 12 Registering Property 118 123 5 Getting Credit 62 70 8 Protecting Minority Investors 69 1 Paying Taxes 104 115 11 Trading Across Borders 108 Enforcing Contract 166 171 Resolving Insolvency 76 74 2 Ranking EoDB 2017 GNI per Capita (USD) SINGAPORE (2) 52,090 AUSTRALIA (15) 60,070 MALAYSIA (23) 10,570 THAILAND (46) 5,620 CHINA (78) 7,820 INDONESIA (91) 3,440 PHILIPPINES (99) 3,540 INDIA (130) 1,590 02

10 13 37 91st World Bank Ease of Doing Business 2017 91 109 114 Indicator 13 Ministry/Institution and Local Government 37 Deregulation 91st + TOP REFORMER COUNTRY Improvement from 106th position at Doing Business 2016 Ranking at EODB 2017 COUNTRY Indonesia Singapore Malaysia Thailand Brunei Vietnam Philippines RANK 91 2 23 46 72 82 99 Improvement of EoDB 1 Starting a Business √ 2 Dealing with Construction Permit 3 Registering Property √ 4 Getting Electricity √ 5 Paying Taxes √ 6 Trading Across Borders √ 7 Getting Credit √ 8 Protecting Minority Investor 9 Enforcing Contract √ 10 Resolving Insolvency 91 109 114 120 129 2013 2014 2015 2016 2017 03

EoDB Rank per Indicator Trading Across Borders Enforcing Contract Resolving Insolvency 151 116 118 49 104 62 70 108 166 76 1 2 3 4 5 6 7 8 9 10 Indonesia EoDB Rank 91 2017 2016 Recalculation1 167 113 123 61 115 69 171 74 106 Starting a Business Dealing with Construction Permit Registering Property Getting Electricity Paying Taxes Getting Credit Protecting Minority Investor TOP REFORMER EODB 2017 Minimum Capital shall be paid in accordance with the agreement of related parties. Reduces time and cost of getting power connections. Cadastral data digitization and utilization of GIS system. Facilitate credit access through the registration of modern collaterals. Paying taxes via online. Facilitate export and import through improvement of customs and registration service (Exported Goods Declaration and Imported Goods Declaration). The existence of a simple lawsuit procedure in a commercial court. 1 Recalculation Factor: The existence of the addition of gender components on the indicators of Starting a Business, Registering Property, and Enforcing Contract; Methodology change through the addition of postfilling process in Paying Taxes indicator; There are data corrections for indicators of Construction Permits, Getting Electricity, Registering Property, Protecting Minority Investors, and Trading Across Borders. A significant reform is urgently needed 04

01 Starting a Business BEFORE AFTER COMPANY NAME CHECKING AND BOOKING DONE VIA AHU ONLINE BY NOTARY DONE VIA AHU ONLINE BY NOTARY AND PUBLIC AUTHORIZED CAPITAL DEPOSITED IN ACCORDANCE TO THE AGREEMENT OF RELATED PARTIES COMPANY ESTABLISHMENT COST COMPANY NAME BOOKING IDR 200,000 COMPANY NAME BOOKING IDR 100,000 LEGALIZATION OF THE LEGAL ENTITY IDR1,000,000 NOTARY FEES 1.5% from Deed of Establishment (IDR6,495,000) GOVERNMENT FEES IDR 580,000 LEGALIZATION OF THE LEGAL ENTITY IDR600,000 NOTARY FEES IDR 4,000,000 GOVERNMENT FEES IDR 400,000 REGISTRATION OF NATIONAL HEALTH CARE SECURITY 7 DAYS DONE VIA ONLINE IN 1 FORM AND WEBSITE REGISTRATION OF NATIONAL SOCIAL SECURITY LOOK AFTER THE LETTER OF BUSINESS PERMIT & COMPANY REGISTRATION 2 SEPARATED PROCEDURE MERGED INTO 1 PROCEDURE AT OSS CENTER REGISTRATION OF EMPLOYEE AT DEPARTMENT OF MANPOWER 1 SEPARATED PROCEDURE MERGED INTO 1 PROCEDURE TOGETHER WITH LETTER OF BUSINESS PERMIT & COMPANY REGISTRATION AT OSS CENTER SURVEY RESULT OF EODB 11 PROCEDURES 24.9 DAYS IDR 2,780,000 (19.4% from income per capita) and Does not Require Minimum investation 5 PROCEDURES IDR 1,950,000 (13.6% from income per capita) and Does not Require Minimum investation BEST PRACTICE Netherland (22) Procedure: 4 Time: 4 hari Cost: 4.5 % income per capita 05

Dealing with Construction Permit 02 Dealing with Construction Permit SIMPLE COMMERCIAL BUILDING / WAREHOUSING 2 FLOOR WITH BUILDING 1,300 M2 BEFORE   AFTER 17 Procedures 6 200 Days 49 IDR 115,381,380 (5% from warehouse value) IDR 81,240,630 Maximum (3.75% from warehouse value) PROCEDURE TIME COST Reduction of Building Permit (IMB) Retribution Fee for MSMEs with a maximum area of < 1,300 m2 of 50% BEST PRACTICE Vietnam (24) Procedure: 10 Time: 166 days Cost: 0.8% building warehouse value 06

03 Registering Property 5 4 28 5.5 5% 2.5% < BPHTB 5% BEST PRACTICE On Cost* Georgia (3): 0 % New Zealand (1): 0.1 % Singapore (19): 2.9 % Vietnam (59) 0.6 % * From Property Value BEFORE   AFTER 5 Procedures 4 28 Working Days 5.5 5% Income Tax 2.5% Indonesia 8.3% RP Rank: 118 Income Tax: 2.5% Land and Building Transfer Duty (BPHTB): 5% Administration: 0.8% BPHTB < 5% NEEDS TO BE LOWERED Land and Building Transfer Duty *Income Tax 1% applicable for Simple House or Flats 07

357% from income per capita 53.71% from income per capita** 04 Getting Electricity BEFORE (49) AFTER (9) Procedure 4.8 3 Installation Time 57.7 days 25 days Installation Fee IDR 775 / VA (Pre-Paid) IDR 775 / VA (Installation Fee* to be installed 12/24 months together with monthly electricity bill) Inspection and Compliance Certificate (SLO) Fee IDR 17.5 / VA IDR 15 / VA Total Cost 357% from income per capita 53.71% from income per capita** BEST PRACTICE Brunei (21) Procedure: 4 Time: 35 days Cost: 54.2% from income per capita *Total Installation Fee: Installation Fee + Deposit Charges IDR 165/VA + Stamp duty. ** Assuming the WB DB team calculates the cost of IDR 0 included in the electricity bill for 12 or 24 months. 08

05 Paying Taxes 54 10 OFFLINE SYSTEM ONLINE SYSTEM BEST PRACTICE INDONESIA Payments (number per year): 43 Time (hours per year): 221 Total tax rate (% of profit): 30.6% Postfiling Index (0-100): 76.5 BEFORE OFFLINE SYSTEM ONLINE SYSTEM Payments (number per year): 10 Time (hours per year): 221 Total tax rate (% of profit): 30.6% Postfiling Index (0-100): 76.5 54 PROCEDURES 10 PROCEDURES AFTER TOTAL PROCEDURES BEFORE AFTER COMPANY INCOME TAX 13 2 SOCIAL SECURITY CONTRIBUTION 1 CORPORATE GUARANTEE CONTRIBUTION 12 PROPERTY/CAPITAL GAIN TAX PROPERTY TAX VEHICLE REGISTRATION TAX BIAYA MATERAI EMPLOYMENT INCOME TAX VALUE ADDED TAX (VAT) BEST PRACTICE Korea (23) Payments (number per year) : 12 Time (hours per year) : 188 Total tax rate (% of profit) : 33.1% Postfiling Index (0-100) : 92.58 09

06 Getting Credit BEST PRACTICE BEFORE AFTER Financial Service Authority (OJK) has issued licenses to private credit bureaus in indonesia: PT Kredit Biro Indonesia Jaya PT Pefindo Biro Kredit (soft launching operating 27 March 2017)   IMPACT Enhance national competitiveness through providing credit information access for the financial service industry actors BEST PRACTICE Malaysia (20) Strength of legal rights index (0-12): 7 Depth of credit information index (0-8): 8 Credit registry coverage (% of adults): 62.4% Credit bureau coverage (% of adults): 76.4% BEFORE AFTER FIDUSIA ONLINE SYSTEM IMPACT: DATABASE NOT YET DEVELOPED TO SEARCH BASED ON DEBTOR NAME, OBJECT TYPE, AND CERTIFICATE NUMBER. SEARCHING FUNCTION ARE ALLOWED TO BE ACCESSED ONLY BY NOTARY. THE COST IS IDR 50.000 (DETERMINED BY THE GOVERNMENT REGULATION NO. 10/2015). FIDUSIA DATA IMPROVEMENT ACCORDING TO DEED DONE MANUALLY BY THE OFFICER DURING 2 WEEKS. ENHANCED FIDUSIA ONLINE CAPABILITY IMPACT: DATABASE COULD BE FOUND BASED ON DEBTOR NAME, OBJECT TYPE, AND CERTIVICATE NUMBER. SEARCHING FUNCTION ARE ACCESSIBLE FOR PUBLIC NOT ONLY BY NOTARY. THE COST IS IDR 50.000 (DETERMINED BY THE GOVERNMENT REGULATION NO. 10/2015) FIDUSIA DATA IMPROVEMENT ACCORDING TO DEED DONE ONLINE AND REALTIME. 10

CORPORATE TRANSPARENCY OWNERSHIP AND CONTROLLER 07 Protecting Minority Investor Adding Point BEST PRACTICE SHAREHOLDER RIGHTS SHAREHOLDERS ACTION CORPORATE TRANSPARENCY India (13) Extent of disclosure index (0-10): 7 Extent of director liability index (0-10): 6 Ease of shareholder suits index (0-10): 7 Extent of shareholder rights index (0-10): 10 Extent of ownership and control index (0-10): 8 Extent of corporate transparency index (0-10): 6 ACCESS TO EVIDENCE OWNERSHIP AND CONTROLLER INDONESIA GENDER DIVERSITY PUU No. 40/2007 POJK No. 33 Year 2014 on Board of Directors and Board of Commissioners of Issuers or Public Companies BEFORE Extent of disclosure index (0-10) : 10 Extent of director liability index (0-10) : 5 Ease of shareholder suits index (0-10) : 2 Extent of shareholder rights index (0-10) : 6 Extent of ownership and control index (0-10) : 6 Extent of corporate transparency index (0-10) : 5 New Assessment Index in EODB 2018 ACCESS TO EVIDENCE New Policies for Shareholder Rights and Corporate Tranparency Index Financial Service Authority (OJK) publishes two new regulations: POJK No. 10/POJK.04/2017 Year 2017 about POJK Revision No.32/POJK.04/2014 on Plans and Implementation of GMS of PT (limited liability company) which gives 2 points “YES” on Shareholders Right Index (8/10). POJK No. 11 Year 2017 on Ownership report or any change of share ownership of PT which gives 1 point “YES” on Corporate Tranparency Index (6/10). AFTER Extent of disclosure index (0-10) : 10 Extent of director liability index (0-10) : 5 Ease of shareholder suits index (0-10) : 2 Extent of shareholder rights index (0-10) : 8 Extent of ownership and control index (0-10) : 6 Extent of corporate transparency index (0-10) : 6 11

Trading Across Borders 08 Trading Across Borders CHANGES BEFORE AFTER Delivery Order Online 3 days 0,5 days Payment of Taxation and PNBP under the Ministry of Finance Separated Online Online (MPN G2/State Acceptance Module 2nd Generation) Exit/Entry Permit INSW INSW and integrated Customs Registration Different number identity/one by one Single Identity Number Docked and Sailed Ship Inaportnet Inaportnet integrated with INSW THC/Terminal Handling Charge Payment Manual E-Billing Norwegia (22) Border Compliance Documentary Compliance Time to export (hours): 2 Time to export (hours): 2 Cost to export (USD): 125 Cost to export (USD): 0 Time to import (hours): 2 Time to import (hours): 2 Cost to import (USD): 125 Cost to import (USD): 0 BEST PRACTICE 12

09 Resolving Insolvency 13

10 Enforcing Contract 14

Jl. Jend. Gatot Subroto 44, Jakarta 12190 P. O. Box 3186, Indonesia P Jl. Jend. Gatot Subroto 44, Jakarta 12190 P.O. Box 3186, Indonesia P. +62 21 5252 008 (Hunting)      0807 100 2576 (Contact Center) F. +62 21 5252 008