A clearer path forward — if you know how to walk it
Indonesia has once again refined its investment landscape. In June 2025, the Government issued Regulation No. 28 of 2025 (PP 28/2025) — a full overhaul of the Risk-Based Business Licensing (Perizinan Berusaha Berbasis Risiko / PBBR) system. The aim is simple but ambitious: to make licensing faster, cleaner, and more transparent through a better-structured OSS system.
To give the law its teeth, the Ministry of Investment/BKPM followed up with Regulation No. 5 of 2025, which took effect on 2 October 2025. This regulation replaces the 2021 framework and brings sharper definitions, better integration, and — importantly — a tighter grip on investor accountability.
A More Complete OSS System
The OSS platform now operates with six integrated subsystems, adding three new pillars to what existed before:
- Basic Requirements – for zoning (KKPR), environmental approval (PL/AMDAL), and building compliance (PBG).
- Investment Facilities – to directly access tax, customs, and other incentive schemes.
- Partnerships – to bridge large investors with MSMEs and cooperatives, as part of Indonesia’s inclusive growth agenda.
The system also introduces more discipline. If your OSS access sits idle for 90 days, it’s automatically deactivated. Two warning notices will come — but this change reflects the new spirit of use it or lose it. You can reactivate within 90 days, but passive entities will no longer clog the system.
Capital Requirements Simplified — But Still Serious
Foreign-owned companies (PT PMA) remain classed as large-scale and must show Rp 10 billion total investment per KBLI/project.
But there’s new breathing room: paid-up capital can now start from Rp 2.5 billion, instead of the full Rp 10 billion, provided the overall project meets the threshold. This helps new entrants — but don’t mistake it for a loophole. The structure still needs to reflect genuine scale and purpose, especially in regulated sectors like construction.
Shared Buildings, Shared Approvals
If you’re leasing a unit in a mall, commercial building, or office tower, you can now leverage the building’s existing approvals (such as PL/AMDAL). That means less red tape for tenants — provided your lease is valid and the building itself is fully compliant.
In government-managed complexes, even the NIB requirement can be waived. This reflects a pragmatic shift — from rigid formality toward functional compliance.
LKPM: Same Story, Sharper Deadlines
Your LKPM (Investment Activity Report) remains non-negotiable — it’s the state’s window into your performance.
- Small enterprises: report twice a year — now due 15 July and 15 January.
- Medium & large enterprises: quarterly reports — due 15 April, 15 July, 15 October, 15 January.
Each LKPM must now include specific and measurable data — from capital realization to workforce welfare. It’s no longer enough to “fill the form.” You must prove substance — actual investment, actual jobs, actual compliance.
The Bigger Picture
These updates under PP 28/2025 and BKPM Reg 5/2025 are not cosmetic. They’re part of Indonesia’s push toward a licensing system that reflects risk, responsibility, and results.
For investors, this is both an opportunity and a test:
- Opportunity, because processes are faster and more transparent.
- Test, because the margin for error — or inactivity — is shrinking fast.
If you treat compliance as part of your business design, not an afterthought, this framework works in your favor. If you cut corners, it will catch up with you.
Practical Tip
- Keep your OSS account active and updated.
- Align your KBLI codes with your real operations.
- Submit your LKPM on time — and with substance, not guesswork.
- And if in doubt, get professional help early — the new system rewards those who build on solid ground.