Indonesia Updates Risk-Based Business Licensing Framework
- November 3, 2025
Minister of Investment and Downstreaming Regulation No. 5 of 2025 (Guidelines on the Implementation of Risk-Based Business Licensing and Investment Facilities through the OSS System)
1. Executive Summary
The Ministry of Investment (BKPM) has issued Regulation No. 5 of 2025 (“Regulation 5/2025”) to operationalize the new Risk-Based Business Licensing (OSS RBA) regime under Government Regulation No. 28 of 2025. This regulation modernizes Indonesia’s licensing ecosystem by integrating additional government systems, simplifying investment procedures, and introducing more proportional requirements for small-scale enterprises and foreign investors.
2. Key Highlights
The Ministry of Investment (BKPM) has issued Regulation No. 5 of 2025 (“Regulation 5/2025”) to operationalize the new Risk-Based Business Licensing (OSS RBA) regime under Government Regulation No. 28 of 2025. This regulation modernizes Indonesia’s licensing ecosystem by integrating additional government systems, simplifying investment procedures, and introducing more proportional requirements for small-scale enterprises and foreign investors.
3. OSS RBA System Enhancements
The Ministry of Investment (BKPM) has issued Regulation No. 5 of 2025 (“Regulation 5/2025”) to operationalize the new Risk-Based Business Licensing (OSS RBA) regime under Government Regulation No. 28 of 2025. This regulation modernizes Indonesia’s licensing ecosystem by integrating additional government systems, simplifying investment procedures, and introducing more proportional requirements for small-scale enterprises and foreign investors.
4. Investment Classification and Capital Requirements
Domestic Investment (PMDN): Micro (≤ IDR 1B), Small (> IDR 1–≤5B), Medium (> IDR 5–≤10B), Large (> IDR 10B). Foreign Investment (PMA): total investment > IDR 10B per KBLI/location; paid-up capital ≥ IDR 2.5B; capital must remain ≥ 12 months; specific sectors in KEK enjoy relaxed thresholds.
5. Basic Licensing Requirements
KKPR and Environmental Approvals must be completed before license issuance. Simplified pathways are provided for businesses in certified commercial buildings. Self-declaration is expanded for micro-low-risk activities, and verification in KEK/KI is handled by zone administrators.
6. Business Licensing & UMKU Permits
Licenses (PB) are issued electronically through OSS. UMKU permits may be saved as drafts before final submission. Business data changes allowed only before issuance, with new renewal and validity-update features.
7. Investment Facilities
Regulation 5/2025 consolidates fiscal (tax holiday, allowance, import-duty exemption) and non-fiscal (infrastructure, training, fast-track licensing) incentives. Applications are processed entirely via OSS.
8. Data Validation and System Integration
OSS RBA verifies legal entity data (Kemenkumham), tax status (NPWP – DJP), identity (Dukcapil / NIK), environmental compliance (Amdalnet), and employment insurance (BPJS). This ensures data integrity and reduces manual verification.
9. Practical Implications
Businesses should update OSS profiles, ensure NIB–NPWP–deed–address consistency, meet capital requirements, and leverage new self-declaration and KEK incentives.
10. Recommended Next Steps
High Priority: Audit NIB & NPWP data, migrate PD/PB forms. Medium: Assess KEK eligibility, update SOPs. Low: Socialize UMKU Draft feature.
11. References
Minister of Investment and Downstreaming Regulation No. 5 of 2025; Government Regulation No. 28 of 2025; BKPM Presentation on OSS RBA Implementation (Jakarta, Oct 2025).
Indonesia Updates Risk-Based Business Licensing Framework Minister of Investment and Downstreaming Regulation No. 5 of 2025
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