Government Regulation No. 28 of 2025: Risk-Based Business Licensing Restructuring and Strategic Consequences for Business Actors

Government Regulation No. 5 of 2021 has been replaced by Government Regulation No. 28 of 2025, which is pertaining to the Implementation of Risk-Based Business Licensing ("GR 28/2025").

This regulation strengthens the PB-UMKU regime, applies the positive fictitious approval principle, and reorganizes risk classifications and licensing authority, among other structural changes to the Risk-Based Business Licensing (Perizinan Berusaha Berbasis Risiko, or "PBBR") framework.

The main changes and their effects on business operators' compliance strategies are outlined in this law update.

1. Licensing Structure: No Longer Limited to an NIB

According to GR 28/2025, in order for businesses to operate, they need to obtain:

• Basic Requirements (Persyaratan Dasar / PD);

• Business License (Perizinan Berusaha / PB); and

• PB-UMKU, where required to support operational and/or commercial activities.

The entire process is conducted through the OSS system, which is integrated with the relevant ministries and institutions.

Basic Requirements include:

• KKPR (land or marine spatial approval) or forest area utilization approval;

• Environmental approval (SPPL, UKL-UPL, or AMDAL);

• Building Approval (PBG) and Certificate of Feasibility (SLF), where construction is required.

  
  

💡Important note: Under certain conditions (e.g., businesses operating in shopping centers or premises that already have valid PD), business operators may rely on the PD held by the building manager or owner.

2. Risk Classification and Operational Legality Status

GR 28/2025 clarifies the legal consequences related to each risk level while maintaining the risk-based approach.

Risk Level	Required Documents	Legal Status
Low	NIB	May operate immediately
Medium-Low	NIB + Standard Certificate (without verification)	May operate
Medium-High	NIB + Standard Certificate (subject to verification)	Operational only after verification
High	NIB + License/Permit	Operational only after the license/permit is issued

For Medium-High and High risk categories, the initial legality is limited to business preparation until the verification or approval process is completed.

The license procedure may be suspended or terminated for noncompliance with the applicable Service Level Agreement (SLA), Non-Tax State Revenue (PNBP) payment, or necessary document modifications.

3. PB-UMKU: A Frequently Overlooked Compliance Area

GR 28/2025 highlights that in cases where operational and/or commercial activities requires additional supporting permits, PB-UMKU must be obtained.

PB-UMKU is generally required for:

• Product distribution;

• Operational feasibility;

• Product or service standardization; and/or

• The facilitation of specific business activities.

PB-UMKU does not form part of export-import licensing or goods restriction/prohibition regimes.

Implication: Possession of an NIB and a Standard Certificate does not automatically authorize full commercial operation. Many sectors require PB-UMKU prior to commencing operational or commercial activities.

4. Regulation of Main and Supporting Business Activities

GR 28/2025 distinguishes between:

Main Business Activities

• Stated in the company’s deed of establishment;

• Serving as the primary source of revenue.

Supporting Business Activities

• May be conducted prior to the main activity;

• Exempt from minimum PMA investment validation (unless generating profit);

• Must have a different KBLI classification from the main activity.

For foreign investment companies (PMA), the minimum investment and capital requirements are directly impacted by the KBLI structure, making it strategically significant. 5. PMA Investment and Capital Requirements

For Foreign Investment (PMA) companies:

• Minimum investment value: more than IDR 10 billion per KBLI (excluding land and buildings);

• Placed and paid-up capital: at least IDR 2.5 billion;

• Capital may not be transferred within 12 months of placement (subject to certain exceptions).

The method for calculating investment value varies depending on the sector (e.g., per 4-digit KBLI, per location, per production line, or per province).

Misclassification of KBLI codes may have direct consequences for investment compliance.

6. Implementation of the Positive Fictitious Approval Principle (Fikpos)

GR 28/2025 applies the positive fictitious approval principle to:

• Medium-High Risk Business Licenses;

• High-Risk Business Licenses; and

• Certain spatial approvals (KKPR).

  
  

The application may be considered legally authorized if the appropriate authority does not provide a decision within the applicable SLA period.

However:

• The principle does not apply to all sectors;

• It does not eliminate substantive compliance obligations;

• It does not cover certain PNBP payments.

  
  

Fikpos is not a mechanism to bypass regulatory requirements, but rather an administrative accountability tool.

7. Acceleration Schemes and Special Facilities

Acceleration mechanisms are available for businesses located in:

• Special Economic Zones (KEK);

• Free Trade Zones (KPBPB);

• Industrial estates; and

• National Strategic Projects.

For the preparatory phase, licenses may be granted an accelerated designation; nevertheless, complete compliance is still required before full operational operations can begin.

Practical Impact for Business Actors

GR 28/2025 strengthens the digital integration of the OSS system and reinforces the distinction between:

• Identity legality (NIB);

• Operational legality (Standard Certificate or License/Permit); and

• Supporting legality (PB-UMKU).

Business actors should undertake:

• Internal audits of KBLI classifications;

• Assessment of PB-UMKU requirements;

• Review of investment and capital compliance;

• Monitoring of SLA timelines and OSS verification status.

Failure to properly understand and manage these distinct stages of legality may result in operational restrictions or administrative sanctions.

Conclusion

GR 28/2025 makes one thing clear: business legality in Indonesia is no longer a single-step process. From NIB issuance to operational permits and PB-UMKU compliance, each stage demands precision, alignment with KBLI classifications, capital compliance, and continuous OSS monitoring. Missteps can lead to delays, restrictions, or administrative sanctions.

In this evolving regulatory landscape, having the right partner is not optional, it is strategic. INi Consulting provides end-to-end support to ensure your business meets every legal requirement efficiently and accurately. With expert guidance in OSS registration, licensing, and regulatory compliance, INi Consulting helps you reduce risk, accelerate approvals, and focus on what truly matters: growing your business in Indonesia.