BKPM Acknowledges Slow Business Licensing Eroding Micro-Economy Growth
Indonesia’s Ministry of Investment and Downstream Harnessing/Investment Co-ordinating Board (BKPM) has acknowledged that delays in business licensing processes can hamper economic growth, particularly in the micro-enterprise sector.
The issuance of permits requiring several months is considered an obstacle preventing small business owners from commencing operations promptly and making economic contributions.
The government is addressing this issue by refining Government Regulation (PP) No. 28 of 2025, specifically regarding the acceleration of Business Identification Number (NIB) issuance through the Online Single Submission (OSS) system. The objective is to reduce administrative barriers that have historically impeded micro-enterprises from launching their businesses.
Deputy Minister of Investment and Downstream Harnessing/Deputy Head of BKPM Todotua Pasaribu stated: “Someone who just wants to sell meatballs has to wait months to obtain their NIB,” at the Ministry of Investment and Downstream Harnessing offices in Jakarta on Thursday, 26 February 2026.
Although the government lacks precise data on potential economic losses resulting from slow licensing, BKPM recognises its significant impact. Approximately 90% of national business operators come from the micro-enterprise segment, which requires rapid licensing processes to survive and develop.
Prior to the refinement of PP 28/2025, micro-enterprise operators had to undergo clarification processes for Approval of Conformity of Space Utilisation Activities (PKKPR) or location permits, which often consumed considerable time. This procedure was deemed unsuitable for the scale of micro-enterprises, which are typically straightforward in nature.
With the regulatory change, micro-enterprise operators can now make independent location permit declarations in the OSS by specifying their business location. This mechanism allows NIB issuance to occur more rapidly without awaiting protracted clarification.
According to Todotua, swift licensing will encourage business operators to commence production and transactions immediately, thereby accelerating economic activity and contributing to the realisation of national investment targets.
The government hopes this licensing reform will unlock economic potential previously constrained by slow licensing processes, particularly from the micro-enterprise sector, which forms the backbone of the national economy.