Indonesian government has officially implemented Government Regulation No. 28 of 2025, which pertains to the Administration of Risk-Based Business Licensing. This new regulation supersedes the previous Government Regulation No. 5 of 2021.
Business Licensing with Guaranteed Timelines
This pivotal policy highlights Indonesia’s dedication to establishing a more streamlined and efficient business licensing framework, ultimately aimed at stimulating national investment growth.
Susiwijono Moegiarso, serving as Secretary of the Coordinating Ministry for Economic Affairs, detailed three primary advancements introduced by the new regulation. Among these significant changes is the implementation of guaranteed service timelines, formally recognized as a Service Level Agreement (SLA), within the entire licensing procedure.
“The SLA will serve as a time reference throughout every stage of the process, from registration and document verification to the issuance of business licenses. This provides clarity and certainty for business actors,” Susiwijono affirmed during the regulation’s launch at the Coordinating Ministry for Economic Affairs in Jakarta on Monday, June 30, 2025.
Susiwijono further underscored that Government Regulation 28/2025 will serve as the sole authoritative reference for all business licensing activities across Indonesia.
“This regulation is the main reference. There should be no additional requirements outside those stipulated. This is to prevent overlapping regulations and provide legal certainty to business actors,” he stated.
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Reducing Bureaucracy to Attract Investment
So, what specific modifications have been incorporated into this new regulation to draw in more investors and enhance the Indonesian economy?
A key change is the introduction of a gradual fictitious-positive policy. This mechanism implies that if the relevant authorities fail to provide a response within the timeframe stipulated by the SLA, the system will automatically advance the process to the subsequent stage. This approach is expected to significantly reduce bureaucratic hurdles and accelerate service delivery.
Another crucial improvement involves simplifying procedures for business operators. Through the enhanced Online Single Submission (OSS) system, Micro and Small Business entities are now only required to complete an independent statement to secure legal recognition for their operations.
This updated OSS system is also equipped with three new complementary subsystems: the Basic Requirements subsystem, the Business Facilities subsystem, and the Partnership subsystem. These three additions are designed to improve the overall integration and efficiency of licensing services.
Strengthening Post-Audit Oversight
It appears Indonesia is poised for rapid self-improvement amidst the ongoing economic slowdown. This new regulation is seen as a vital solution for addressing the USD 92.6 billion in unrealized investment commitments that occurred in 2024.
According to Todotua Pasaribu, Indonesia’s Deputy Minister of Investment and Downstream/Investment Coordinating Board, this substantial shortfall was primarily attributable to the convoluted business licensing process.
“This is indeed a classic problem. Every year we record investment realization, which is inputted by business actors. We found the figure in 2024 that the unrealized investment figure was around IDR 1,500 trillion (USD 92.6 billion),” Todotua explained in Jakarta on Thursday, July 3, 2025.
While aiming to enhance the ease of doing business in Indonesia, this regulation does not diminish the scrutiny of business compliance. Todotua elaborated that the licensing reform strategy encompasses not only convenience but also a reinforced emphasis on the post-audit supervision aspect.
Todotua highlighted the critical need for consolidating data and systems to ensure that granted permits truly correspond to tangible investments that yield economic benefits. He also affirmed that the government will not hesitate to revoke business permits found to be in violation of regulations, specifically mentioning instances in popular tourist destinations such as Bali.
“Some that are indeed not right, such as rogue business actors in Bali and others, we revoke,” Todotua emphasized.
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Expert Legal Support for to Local Compliance
Indonesia’s decisive action to address the “classic problem” of unrealized investment and streamline licensing, signals a strong intent to create a more attractive investment climate. However, as the ministry emphasized, strict supervision remains.
For foreign investors keen to avoid the pitfalls of non-compliance and ensure the long-term success of their ventures, partnering with an experienced local firm is paramount.
Seven Stones Indonesia specializes in navigating Indonesia’s evolving regulatory framework, providing comprehensive corporate legal services for company incorporation and ongoing business compliance. Connect with us today to transform regulatory challenges into growth opportunities for your business in Indonesia.