Introduction: A New Era of Business Licensing in Indonesia
The Indonesian government has introduced a transformative update to its business license framework through the enactment of Government Regulation No. 28 of 2025 (PP 28/2025). This regulation replaces the previous PP No. 5 of 2021, streamlining procedures while enhancing regulatory clarity and compliance. For businesses—local and foreign—understanding this updated business license system is crucial for smooth market entry and legal operations in Indonesia.
In this comprehensive guide, we unpack the key components of the new Business License system, explain the stages of business setup, highlight critical changes in regulation, and discuss how CPT Corporate can support your licensing journey in Indonesia.
Understanding the Revised Business License Framework
From PP 5/2021 to PP 28/2025: What Has Changed?
The enactment of Government Regulation No. 28 of 2025 (PP 28/2025) further strengthens Indonesia’s commitment to risk-based licensing. Under this regulation, all business licensing processes—including foundational requirements like spatial planning conformity (KKPR), environmental approvals (PL), and building permits (PBG & SLF)—must now be conducted via the OSS system. The regulation mandates businesses that acquired access to OSS prior to the regulation’s implementation to update their system access. This update is required to ensure compliance with the revised legal framework and will be notified through the registered email address on the OSS platform. To support this transition, the government has committed to issuing technical implementing regulations no later than October 5, 2025.
PP 28/2025 marks a significant overhaul of the Business License system. While it retains core elements of risk-based licensing, it expands its scope to 22 sectors—an increase from 16 previously regulated sectors. These now include:
- Metrology
- Creative Economy
- Geospatial Information
- Cooperatives
- Capital Investment
- Electronic Systems and Transactions
This shift ensures that the business license process aligns with Indonesia’s evolving digital and economic landscape.
The Two-Phase Licensing Model
The Business License system is now categorized into two major phases:
- Starting a Business
- Legal documentation
- Basic requirements (e.g., zoning compliance, environmental approvals)
- License acquisition via OSS (Online Single Submission)
- Operating a Business
- Land acquisition, hiring, and equipment procurement
- Full-scale operations, production, marketing, and distribution
Each step in the business license process is governed by centralized and streamlined criteria under the new regulation.
Expanded OSS System and Digital Licensing Infrastructure
The Indonesian government is committed to digital transformation, and PP 28/2025 reflects that. The Online Single Submission (OSS) platform has been upgraded with new subsystems to manage the business license process end-to-end.
Key OSS Subsystems You Need to Know
- Basic Requirements
Access to spatial planning (KKPR), environmental clearance, and building permits. - Investment Facilities
Including import tax exemptions, tax deductions for training programs, and more. - Business Partnerships
Both mandatory and voluntary partnerships, with ongoing monitoring capabilities.
The revamped OSS enables real-time license tracking and compliance updates, making it easier for businesses to stay aligned with legal obligations.
New NSPK Rules and Local Authority Limits
National Uniformity in Business License Enforcement
PP 28/2025 reinforces the role of the central government in setting Norms, Standards, Procedures, and Criteria (NSPK) for business licensing. It strictly prohibits local governments from expanding or altering the centrally defined requirements.
This ensures uniform interpretation and enforcement of business license criteria across Indonesia, reducing bureaucratic friction and regional inconsistencies.
Differentiated Roles for Licensing Authorities
The Business License issuing authorities are now clearly outlined:
- OSS and ministries for general licenses
- Local DPMPTSP offices (provincial, city, or regency) for regional permits
- Special Economic Zone (KEK) administrators and Free Trade Zone authorities
This clarity supports faster approvals and smoother coordination, especially for foreign investors navigating Indonesian bureaucracy.
Risk-Based Approach and Administrative Sanctions
A cornerstone of Indonesia’s business license reform is its risk-based model. Under PP 28/2025, each sector and business activity is categorized by risk level—low, medium, or high. Licensing requirements scale accordingly, enabling lower-risk businesses to obtain licenses more easily.
New Sanction Mechanisms
PP 28/2025 introduces structured administrative sanctions for violations:
- Official warnings
- Temporary business suspensions
- Administrative fines
- Enforcement through state powers
- License revocations
- Cancellation of underlying legal prerequisites
All sanctions are administered through the OSS platform, ensuring transparency and accountability throughout the business license lifecycle.
Why CPT Corporate is Your Trusted Partner
Navigating Indonesia’s Business License requirements can be complex—especially for foreign businesses unfamiliar with local systems. CPT Corporate offers end-to-end support to help companies secure and manage their licenses effectively under the new regulations.
CPT Corporate’s Business License Services Include:
- License application and renewal via OSS
- Legal documentation and KKPR assistance
- Environmental and building compliance consulting
- Advisory on sector-specific licensing obligations
- Representation for foreign investors in SEZs and KPBPB
With years of experience in regulatory consulting and business setup, CPT Corporate ensures that your business not only complies with Indonesia’s business license framework—but thrives within it.
Conclusion: Embrace the Future of Business Licensing in Indonesia
Indonesia’s new Business License system is a bold step toward greater transparency, efficiency, and economic growth. By simplifying processes and expanding digital infrastructure, the country positions itself as a competitive destination for global investment.
However, adapting to these new systems requires a deep understanding of regulatory nuances and diligent compliance. With CPT Corporate as your partner, you can move confidently through every stage of the business license process—from application to operation.
Ready to Secure Your Business License in Indonesia?
Whether you’re a startup, SME, or multinational, CPT Corporate can help you meet all regulatory requirements under Indonesia’s new Business License system.
Contact CPT Corporate today to begin your licensing journey with confidence.
