Shift To Risk-Based Licensing Set To Transform Indonesia's Investment Climate

Continuing our Overview Series on the Omnibus Law and in light of the issuance of the implementing regulations to the law, our team is currently examining these regulations to assess their impact on your business.

In this update, we will highlight changes in the corporate sector.

Following the enactment of Law No. 11 of 2020, commonly known as the Omnibus Law, the government has introduced the necessary implementing regulations to the law. Of the proposed changes under the Omnibus Law, one, in particular, will affect all businesses, namely the shift from a commitment-based licensing regime to a risk-based licensing regime. The new regime is reflected under Government Regulation No. 5 of 2021 on the Implementation of Risk-Based Business Licenses. It is aimed to administer a more streamlined and efficient business licensing process, and in some instances, even removing the licensing requirement for certain businesses.