Navigating Indonesia’s New Licensing Landscape: General Points from GR 28/2025

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To enhance the ease of doing business and attract more investment, the Indonesian government has issued Government Regulation No. 28 of 2025 (“GR 28/2025”) on Risk-Based Business Licensing, replacing Government Regulation No. 5/2021 (“GR 5/2021”). This new regulation strengthens the Online Single Submission–Risk Based Approach (“OSS-RBA”) system by refining risk classifications, clarifying the roles of ministries and regional governments, and improving system integration and supervision. Effective from 5 June 2025, GR 28/2025 aims to provide businesses with clearer procedures, stronger legal certainty, and faster licensing processes.

Insight on the Issuance of GR 28/2025

The Government confirmed through public briefings and webinars that GR 28/2025 is now the sole legal basis for risk-based licensing. Ministries, local governments, and other authorities may no longer impose additional requirements unless explicitly provided under this regulation.

GR 28/2025 also upgrades the OSS-RBA system by introducing new features such as basic requirements, investment facilities, and partnership obligations. It further strengthens implementation by imposing strict timelines and enabling automatic approval mechanisms (“Fiktif Positif”), if deadlines are not met. These changes are designed to simplify licensing, support Micro, Small and Medium Enterprises (“MSMEs”), and open more sectors to investment through a revised Positive Investment List. The Government expects these improvements to be fully implemented within three to four months of the regulation’s effective date.

Key Changes Introduced by GR 28/2025

• Expanded Sectoral Coverage

  GR 28/2025 introduces an expanded scope for risk-based business licensing, building upon the foundational framework established by GR 5/2021. While the core principles related to licensing and risk classification remain intact, the regulation now applies to a broader range of sectors. Previously limited to 16 sectors, including agriculture, environmental and forestry management, trade, and tourism, while the updated regulation now encompasses 22 sectors. Among the newly added sectors are: ¹

  1. Legal Metrology;
  2. Creative Economy;
  3. Geospatial Information;
  4. Cooperatives;
  5. Investment;
  6. Electronic Systems and Transaction Operations.
• Separation between Basic Licensing and Business Licensing

  Previously, the OSS-RBA system combined the submission menus for both business licensing and basic permits. However, with the enactment of GR 28/2025, these processes are now handled separately. This change aligns with the regulation’s introduction of two distinct phases for starting a business, outlined as follows: ²

  1. Business Initiation Phase ³
     1. Establishing legal entity status;
     2. Fulfilling basic permits, such as environmental approvals and location or spatial use permits;
     3. Submitting business licence applications.
  2. Business Operation Phase ⁴
     1. Preparation sub-phase includes land acquisition, building construction, recruitment, and meeting risk-based licensing standards.
     2. Operational sub-phase includes producing goods or services, marketing activities, and other commercial operations.
• Major Shifts in Environmental and Technical Approvals

  GR 28/2025 introduces maximum processing times for technical and environmental approvals (Pertimbangan Teknis or Pertek) after submission of complete and correct documents: ⁵

  1. Wastewater quality standards – maximum of 30 business days;
  2. Emission quality standards – maximum of 30 business days;
  3. Hazardous and toxic (Bahan Berbahaya dan Beracun – B3) waste management – maximum of 16 business days; and/or
  4. Traffic impact analysis (Analisis mengenai Dampak Lalu Lintas)
     1. for activities with high and medium traffic generation – maximum of 23 business days, and
     2. for activities with low traffic generation – maximum of 3 business days.

  This is a significant improvement, as GR 5/2021 did not provide any time limits for such approvals.

• Clear Timelines and Implementation of the Fiktif Positif Principle

  GR 28/2025 introduces a Service Level Agreement (“SLA”) mechanism that sets clear timelines for licensing processes, enhancing legal certainty for business actors. If the relevant authority fails to process applications within the stipulated period, the Fiktif Positif principle applies, whereby applications are deemed approved and may proceed to the next licensing stage.

  Further, licensing processes subject to the Fiktif Positif principle include:

  1. Basic Requirements (Persyaratan Dasar);
  2. Business Licensing (Perizinan Berusaha); and
  3. Business Licensing to Support Business Activities (Perizinan Berusaha untuk Menunjang Kegiatan Usaha or PB UMKU).

  For instance, the Commitment Approval for Forest Utilisation, issued by the Ministry of Environment and Forestry, must be processed within 25 working days (if no revisions are required); or 40 working days (if revisions are necessary). ⁶

  As of June 2025, approximately 258 Indonesian Standard Industrial Classification (“KBLI”) codes fall under the scope of the Fiktif Positif mechanism, as listed on the OSS-RBA website.

  However, please also note that a licence issued under the Fiktif Positif principle does not waive the Government’s authority to verify. If discrepancies are later discovered, the relevant authority may still evaluate or revoke the licence under applicable laws.

• Simplification for Multi-KBLI Applications and Businesses in Industrial Estates

  After the enactment of GR 28/2025, where a business involves multiple KBLI codes within a single ecosystem, the environmental approval must follow the highest applicable environmental standard. ⁷

  Furthermore, GR 28/2025 introduces clearer rules for businesses located in industrial estates, Special Economic Zones (“KEK”), or Free Trade Zones and Free Ports (“KPBPB”). If the area is covered by an Environmental Impact Assessment (“AMDAL”) and area-based environmental approval, business actors must prepare an Environmental Management Plan (“RKL”) and Environmental Monitoring Plan (“RPL”) based on the area document, a requirement not previously stipulated under GR 5/2021. ⁸

• Strengthening Monitoring and Sanction Mechanisms

  GR 28/2025 mandates that the entire process of environmental approval, including its application and issuance should be conducted through the OSS-RBA system. ⁹ Previously, ministries issued such approvals through their own systems, which were only later integrated into OSS-RBA.

  The regulation also introduces centralised administrative sanctions applicable to violations of basic requirements; business licensing; and/or supporting business licensing.

  Previously, administrative sanctions were only provided at the subsector level (e.g., fisheries, horticulture, energy). Under GR 28/2025, sanctions are now structured in a tiered system based on the level of non-compliance and may include: ¹⁰

  1. Written Warnings;
  2. Temporary Suspension;
  3. Administrative Fines;
  4. Enforcement of Police Measures;
  5. Licence or Certification Revocation;
  6. Revocation of Basic Requirements, Business Licensing, or Business Licensing to Support Business Activities.

  These sanctions must be imposed by authorised officials (e.g., ministers, governors, heads of agencies, or KEK administrators) through the OSS-RBA system. ¹¹

Implications for Existing Businesses

• For Existing Businesses

  For companies that are still in the process of fulfilling licensing requirements and/or have not yet completed verification under the OSS-RBA system, their applications will continue to be processed under the current OSS-RBA framework until further adjustments are made. ¹² GR 28/2025 mandates that all OSS-RBA system features, implementing regulations, and sectoral standards for business licensing be aligned with the new regulation no later than four months from its effective date, by 5 October 2025. ¹³

  During this transitional period, businesses may experience inconsistencies or delays as the OSS-RBA system adapts to new risk classifications and sectoral licensing structures. Companies are advised to proactively monitor system updates and coordinate with local authorities when necessary to avoid disruptions to their operational or licensing processes.

• For New Businesses and Investors

  The updated framework under GR 28/2025 provides clearer, more structured stages for business establishment and operation. New investors benefit from improved transparency on licensing requirements, clearer timelines, and the application of the ‘Fiktif Positif’ principle, granting automatic approval if deadlines are not met. The expansion of covered sectors and refinement of OSS-RBA processes presents a more predictable environment for investment planning and market entry.

1. Article 5 (1) and (2) of GR 28/2025 ↩
2. Article 7 of GR 28/2025 ↩
3. Article 8 of GR 28/2025 ↩
4. Article 9–10 of GR 28/2025 ↩
5. Article 80 (2) and Article 83 (1) of GR 28/2025 ↩
6. Articles 43–49 of GR 28/2025 ↩
7. Article 78 (6) of GR 28/2025 ↩
8. Article 102 of GR 28/2025 ↩
9. Article 78 (4) & (5) of GR 28/2025 ↩
10. Article 355 (2) of GR 28/2025 ↩
11. Article 355 (3) of GR 28/2025 ↩
12. Article 549 of GR 28/2025 ↩
13. Article 551 of GR 28/2025 ↩

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Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.

Go to

1. Insight on the Issuance of GR 28/2025
2. Key Changes Introduced by GR 28/2025
3. Implications for Existing Businesses

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