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The promulgation of Government Regulation No. 28 of 2025 concerning the Implementation of Risk-Based Business Licensing (“GR 28/2025”) marks a significant milestone in the evolution of Indonesia’s business licensing regime, effectively repealing Government Regulation No. 5 of 2021 concerning the Implementation of Risk-Based Business Licensing (“GR 5/2021”).
This new regulation reflects the government’s continuous commitment to policy reform aimed at streamlining licensing processes and realizing the core objectives of Job Creation Law, namely facilitating the ease of starting and operating business as well as fostering sustainable investment growth. While GR 5/2021 laid the foundation for a risk-based licensing regime, GR 28/2025 refines this framework by strengthening procedural clarity, improving regulatory coherence, and introducing more robust mechanisms to ensure service quality. This article outlines some of the key updates and substantive changes introduced under GR 28/2025.
Refining the Business Process
Although GR 28/2025 retains the foundational principles of capital scale and risk levels previously outlined in GR 5/2021, GR 28/2025 enhances procedural clarity by structurally dividing the entire business process into two distinct stages: business commencement and business operation. The business commencement stage is delineated into three sub-stages: fulfilment of business legality (i.e., establishing legal entity), fulfilment of basic requirements (entails securing spatial utilization compatibility, environmental approval, building approval, and certificate of functionality), as well as application submission of relevant Business Permit (Perizinan Berusaha – “PB”).
Subsequently, business operation stage is divided into two sub-stages namely preparation stage which encompasses procurement and construction of land and building, human resources recruitment, as well as the essential fulfilment of business standards and PB requirements. Following this, the final operational and/or commercial stage which covers all core activities, encompassing production, logistics, distribution, and marketing of goods and/or services, as well as any other activities necessary for full operational and/or commercial execution. During this stage, where applicable, the business actors must obtain the necessary Business Permit for Supporting Business Activities (Perizinan Berusaha untuk Mendukung Kegiatan Utama – “PB-UMKU”).
New Business Sectors under GR 28/2025
Through GR 28/2025, the government strategically expands and integrates the scope of regulated business sectors from the previous 16 sectors to a total of 22 sectors. Newly incorporated sectors include legal metrology, creative economy, geospatial information, cooperatives, investment, and the organization of electronic systems and transactions, bringing these dynamic fields under a unified risk-based standard. Reflecting this expansion, the total number of Indonesian Standard Business Field Classification (Klasifikasi Baku Lapangan Usaha Indonesia – “KBLI”) entries has increased from 1.348 to 1.417 codes. This significant growth ensures that many previously unregulated or ambiguously categorized activities are now formally defined and integrated within the Online Single Submission (OSS) system.
Enforcement of Positive Fictive Principle
While the positive fictive principle is rooted in broader administrative law, its implementation within the OSS system is reinforced by GR 28/2025 through a strict Service Level Agreement (SLA). This mechanism ensures that if a technical ministry or agency fails to issue a decision on basic requirements, PB, or PB-UMKU application within the prescribed SLA, the application is deemed legally approved. Further demonstrating commitment, the Ministry of Investment announced on June 24, 2025, a list of 258 KBLI codes across various industries to which this deemed approval mechanism applies. However, it is important to note that GR 28/2025 itself does not provide specific technical details for implementing deemed approval. Consequently, further clarity will depend on the issuance of sector-specific implementing regulations, which are expected to elaborate on applicable SLA and approval processes.
Stronger Post Licensing Compliance
GR 28/2025 places a strong emphasis on post-licensing compliance, indicating that the issuance of Business Identification Number, which forms part of PB is merely the starting point, not the culmination of regulatory adherence. To enforce compliance, GR 28/2025 establishes a graduated sanction framework that progresses through escalating stages. These sanctions include written warnings/reprimands, government coercion, administrative fines, temporary suspension and, ultimately, the severe penalty of revocation of PB and/or PB-UMKU.
A Call for Coordinated Actions
The success of comprehensive reforms introduced by GR 28/2025 hinges critically on timely and coordinated execution. Although GR 28/2025 sets a clear directive that all implementing regulations must be issued within 4 months from its enactment (or the latest by October 5, 2025), this crucial deadline has unfortunately passed. We recognize the inherent complexity involved in such a transition, but we must gently underscore that addressing this regulatory gap promptly is paramount to maintaining the confidence of business actors and investors.
Guidance for Business Actors and Investors
Navigating these shifting sands of company establishment and licensing compliance, especially with new regulations taking effect, can be challenging. Should you encounter any obstacles or require specialized legal assistance in company establishment, obtaining permits, or achieving full compliance under the new GR 28/2025 regime, please do not hesitate to contact us. We are ready to assist you in turning regulatory challenges into business certainties.
For further information, please contact the authors:
Raden Aji Wibisono
Partner
[email protected]
Cindy Cherya
Associate
[email protected]