Business Licensing for Dental and Oral Hospitals

Provisions regarding business activities in the field of Dental and Oral Hospitals (“ RSGM ”) are regulated in the Regulation of the Minister of Health of the Republic of Indonesia Number 3 of 2020 concerning Classification and Licensing of Hospitals (“ PERMENKES 3/2020 ”). Furthermore, Article 12 and Article 13 of PERMENKES 3/2020 explain that RSGM is included in the type of special hospital that provides primary services in one field or one type of disease based on scientific discipline, age group, organ, type of disease, or other specializations.

The implementation of RSGM business activities can be carried out by Indonesian citizens through Domestic Investment (“ PMDN ”) or foreign citizens through Foreign Investment (“ PMA ”). Before carrying out RSGM Business Activities, business actors need to pay attention to the following matters:

1. Indonesian Standard Classification of Business Fields (“KBLI”) Code 8603

RSGM is included in KBLI 8603 which includes health care and physical treatment activities, both for outpatient and inpatient care ( hospitalization ), carried out by private general hospitals, private maternity homes, and private specialty hospitals. Business licensing in this KBLI has a high-risk level and a validity period of 5 (five) years.

2. RSGM Establishment Provisions

Based on Article 185 paragraph (3) and (4) of Law Number 17 of 2023 concerning Health (” Health Law “), all business sectors within the scope of KBLI 86103 (Hospital Activities), the following provisions apply:

Hospitals established by the community must be in the form of a legal entity established under Indonesian law and domiciled in Indonesia and only engaged in the field of Health Services ( limited purpose ) so that the legal entity in question can only carry out business activities in the field of ” Health Services”. The business activities included in the field of health services include the following:

1. 71208 (Testing and/or Calibration Activities of Medical Devices and Inspection of Health Facilities and Infrastructure),
2. 86105 (Private Clinic Activities),
3. 86901 (Health Service Activities Carried Out by Health Workers Other Than Doctors and Dentists)
4. 86105 (Private Clinic Activities),
5. 86901 (Health Service Activities Carried Out by Health Workers Other Than Doctors and Dentists)
6. 86902 (Traditional Health Care Activities)
7. 86903 (Health Support Service Activities), and
8. 86904 (Special Transport Activity for Transporting Sick People (Medical Evacuation).

Based on the provisions above, to organize a hospital, it is mandatory to form a legal entity that only carries out business activities in the field of health services. However, this provision does not apply to hospitals owned by non-profit legal entities (Foundations, Associations, and Societies).

a. Provisions for Establishing RSGM PMDN

Before establishing an RSGM, business actors must form a limited liability company legal entity that only operates in the health services sector as referred to in Article 4 of PERMENKES 3/2020 and the Health Law.

b. Provisions for Establishing RSGM PMA

In addition to the provisions in the establishment of RSGM PMDN, in the establishment of RSGM PMA, provisions also apply regarding limited liability companies that are formed and are required to have business capital of more than IDR 10,000,000,000.00 (ten billion rupiah) excluding the value of land and buildings as referred to in Article 7 paragraph (1) of Presidential Regulation Number 10 of 2021 concerning the Investment Business Sector as amended by Presidential Regulation of the Republic of Indonesia Number 49 of 2021 concerning Amendments to Presidential Regulation Number 10 of 2021 concerning Investment (“ PERPRES on the Investment Business Sector ”).

3. RSGM Class Terms and Conditions

RSGM is divided into 3 (three) classes, namely Class A, Class B, and Class A as referred to in the Attachment to PERMENKES 3/2020, which are in essence as follows:

1. Class A specialist hospitals are specialist hospitals that have at least 100 (one hundred) beds;
2. Class B specialist hospitals are specialist hospitals that have at least 75 (seventy-five) beds;
3. A class C specialist hospital is a specialist hospital that has at least 25 (twenty-five) beds.

4. Procedures for RSGM Business Licensing

For PMA and PMDN Business Actors who wish to organize dental and oral hospital business activities must have a hospital establishment permit and a hospital operational permit as stipulated in Article 29 to Article 37 of PERMENKES 3/2020 and Attachment to Regulation of the Minister of Health Number 14 of the Republic of Indonesia Number 14 of 2021 Concerning Standards for Business Activities and Products in the Implementation of Risk-Based Business Licensing in the Health Sector (” PERMENKES 14/2021 “). The application for the permit is submitted to the Minister of Health for PMA RSGM through the Online Single Submission (” OSS “) system and the Regional Government where the RSGM is established for PMDN. The procedures for applying for RSGM Business Licensing can be described as follows:

1. Establishment Permit
   • Business actors apply for a hospital establishment permit by attaching the following documents:
     • Deed of Establishment of a Legal Entity;
     • NIB;
     • Certificate of suitability of location and land use (KKPR/PKKPR) and consideration of hospital needs from the local district/city health office;
     • Development Study and Planning Document;
     • Fulfillment of Medical Device Services.
   • The Ministry of Health /local health service will evaluate the application no later than 14 (fourteen) days after receipt;
2. If based on the evaluation results the application is accepted, the Minister of Health/Local Government will issue a permit to establish a hospital after considering the Fulfillment of Medical Device Services and the Development Study and Planning Documents which consist of:
   • Feasibility Study (FS) which includes a study of hospital service needs, a study of land needs, a study of funding/financing capabilities;
   • Detailed Engineering Design which is a complete planning drawing of the hospital to be built, including architectural drawings,
   • electrical structures and mechanics comply with technical requirements;
   • The master plan contains an analysis of general conditions with internal and external aspects including environmental and traffic impact analysis,
   • Master Program (in human resource development plan, hospital service development plan, integrated superior service plan),
   • Functional program (functional relationship service activities, grouping/zoning, pandemic period zoning, hospital activity circulation patterns, financing needs, building block plans and hospital utility concepts, and development phasing plans);
3. Operational Permit

After establishing a hospital, business actors can apply for a Hospital Operational Permit before the hospital operates. The stages of the Operational Permit are described as follows:

1. Business actors submit requests to fulfill operational permit commitments by listing the following:
   • The Hospital Profile at least includes the vision and mission, scope of activities, strategic plans, and organizational structure;
   • Self-assessment includes types of services, human resources, equipment, and hospital buildings and infrastructure concerning Attachment to PERMENKES No. 3/2020;
   • Certificate or permit for the suitability or use and calibration of medical devices;
   • A statement stating the commitment to the number of beds.
2. The Ministry of Health/Local Health Service will evaluate the fulfillment of the commitment no later than 14 (fourteen) days after the business actor submits the fulfillment of the commitment;
3. Based on the results of the verification and visitation, the Ministry of Health/Local Government issues a decision on approval or rejection no later than 10 (10) days after the visitation. The decision also contains the determination of class based on the results of the assessment of the fulfillment of the number of beds.
4. Compliance Sanctions

Business actors who do not comply with RSGM business permit properly may be subject to administrative sanctions as referred to in Article 444 paragraph (1) of Government Regulation of the Republic of Indonesia Number 5 of 2021 concerning the Implementation of Risk-Based Business Licensing, which reads as follows:

Article 444

Every Business Actor who, based on the results of Supervision, is found to have non-compliance or violations of Business Licensing in the health sub-sector, will be subject to administrative sanctions in the form of:

a. warning;

b. temporary suspension of business activities;

c. imposition of administrative fines; and/or

d. revocation of Business License.

Ilham Satria Wibawa, Born in Madiun, July 6, 1998. Obtained a Bachelor of Laws (SH) degree from Gadjah Mada University in 2022. Currently an Advocate at PNP Counselors at Law.

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