Government Issues New Risk-Based Business Licensing Regulation to Boost Investment Climate
The government has reaffirmed its commitment to creating a healthy, competitive, and inclusive business climate through the issuance of Government Regulation (PP) Number 28 of 2025 on the Implementation of Risk-Based Business Licensing. This regulation serves as a refinement of the previous policy, replacing PP Number 5 of 2021, whilst reinforcing the government's concrete steps to simplify the business licensing process in Indonesia.
The government has emphasised that PP 28/2025 will serve as the sole legal reference (single reference) for the issuance of risk-based business licences. No additional requirements or permits from ministries, agencies, regional governments, or zone administrators beyond those stipulated in the regulation will be permitted.
The primary objective of PP 28 of 2025 is to create business certainty and policy alignment between central and regional governments, thereby making Indonesia's investment climate more competitive. Through a risk-based approach, business operators are only required to fulfil requirements proportional to the risk level of their business activities.
The new regulation brings welcome relief for business operators, particularly Micro, Small, and Medium Enterprises (MSMEs) who have long been hampered by complex and slow bureaucracy. Through the risk-based approach, the government aims to simplify procedures and accelerate licensing processing times, whilst ensuring that high-risk sectors remain under strict supervision.
Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, stated that the issuance of PP Number 28 of 2025 demonstrates the government's commitment to continuously building a business licensing ecosystem that supports investment growth. Through strengthened regulations and an integrated system, the regulation is expected to simplify processes, accelerate services, and provide clarity and certainty for all business operators.
There are three key points that significantly differentiate PP 28/2025 from previous regulations. These three points are directly related to procedural simplification, service time certainty, and national digital system integration.
First, the certainty of Service Level Agreements (SLA) in the business licensing issuance process. This establishes deadlines at every stage of business licence issuance, from registration and document verification through to licence issuance.
Second, the implementation of a fictitious-positive policy, applied gradually in the risk-based business licensing process. If a response exceeds the service deadline (SLA), the system will automatically advance the process to the next stage.
Third, the government has given special attention to Micro and Small Enterprises (UMK) through simplified processes based on self-declaration via the Online Single Submission (OSS) system. The OSS system has been enhanced with three new subsystems: the Basic Requirements subsystem, the Business Facilities subsystem, and the Partnership subsystem.
Similarly, Secretary of the Ministry of Investment and Downstream Industries/Principal Secretary of BKPM, Heldy Satrya Putera, stated that PP 28/2025 will be implemented gradually and cautiously, particularly for technical permits requiring field measurements. Technical matters are said to still require time and depend on location.
The government is now implementing an SLA system to ensure measurable and monitorable service durations.
Meanwhile, Deputy for Investment Climate Development at the Ministry of Investment and Downstream Industries/BKPM, Riyatno, stated that PP 28/2025 will come into full effect on 5 October 2025. At least 61 ministerial and agency head regulations, as well as one presidential regulation, must be issued within the coming month. The government is currently in a four-month transition period as the OSS-RBA system needs to be adjusted to comply with PP 28/2025. Additionally, each ministry and agency must issue their respective ministerial regulations as derivative rules of PP 28/2025.
The success of PP 28/2025 cannot rely solely on the government. Support is needed from all stakeholders, from the business community, academics, MSME support institutions, to civil society. The business community needs to actively provide input, optimally utilise existing systems, and maintain integrity in conducting their business. Support institutions and professional associations can also play a role in educating business operators, particularly MSMEs, so they can understand and take advantage of the facilities provided through this regulation.
Civil society, including the media, plays an important role in exercising social oversight of the regulation's implementation to ensure it remains accountable and is not misused.
Government Regulation Number 28 of 2025 represents a step forward in bureaucratic reform of business licensing in Indonesia. Through a risk-based approach, this regulation not only provides convenience but also delivers legal certainty, efficiency, and balanced protection between business operators and public interests.
Simplified licensing does not mean neglecting quality and responsibility. On the contrary, with a more structured system, better supervision, and strong collaboration between central and regional governments as well as business operators, PP 28/2025 is expected to serve as a catalyst for inclusive and sustainable economic growth.
PP 28/2025 is also expected to transform the business community's perception of government licensing services, from what was previously considered slow and non-transparent to something more measurable and reliable. Support from all levels of society for the implementation of this regulation is the key to truly realising a healthy, fair, and competitive business climate in Indonesia.
The government has emphasised that PP 28/2025 will serve as the sole legal reference (single reference) for the issuance of risk-based business licences. No additional requirements or permits from ministries, agencies, regional governments, or zone administrators beyond those stipulated in the regulation will be permitted.
The primary objective of PP 28 of 2025 is to create business certainty and policy alignment between central and regional governments, thereby making Indonesia's investment climate more competitive. Through a risk-based approach, business operators are only required to fulfil requirements proportional to the risk level of their business activities.
The new regulation brings welcome relief for business operators, particularly Micro, Small, and Medium Enterprises (MSMEs) who have long been hampered by complex and slow bureaucracy. Through the risk-based approach, the government aims to simplify procedures and accelerate licensing processing times, whilst ensuring that high-risk sectors remain under strict supervision.
Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, stated that the issuance of PP Number 28 of 2025 demonstrates the government's commitment to continuously building a business licensing ecosystem that supports investment growth. Through strengthened regulations and an integrated system, the regulation is expected to simplify processes, accelerate services, and provide clarity and certainty for all business operators.
There are three key points that significantly differentiate PP 28/2025 from previous regulations. These three points are directly related to procedural simplification, service time certainty, and national digital system integration.
First, the certainty of Service Level Agreements (SLA) in the business licensing issuance process. This establishes deadlines at every stage of business licence issuance, from registration and document verification through to licence issuance.
Second, the implementation of a fictitious-positive policy, applied gradually in the risk-based business licensing process. If a response exceeds the service deadline (SLA), the system will automatically advance the process to the next stage.
Third, the government has given special attention to Micro and Small Enterprises (UMK) through simplified processes based on self-declaration via the Online Single Submission (OSS) system. The OSS system has been enhanced with three new subsystems: the Basic Requirements subsystem, the Business Facilities subsystem, and the Partnership subsystem.
Similarly, Secretary of the Ministry of Investment and Downstream Industries/Principal Secretary of BKPM, Heldy Satrya Putera, stated that PP 28/2025 will be implemented gradually and cautiously, particularly for technical permits requiring field measurements. Technical matters are said to still require time and depend on location.
The government is now implementing an SLA system to ensure measurable and monitorable service durations.
Meanwhile, Deputy for Investment Climate Development at the Ministry of Investment and Downstream Industries/BKPM, Riyatno, stated that PP 28/2025 will come into full effect on 5 October 2025. At least 61 ministerial and agency head regulations, as well as one presidential regulation, must be issued within the coming month. The government is currently in a four-month transition period as the OSS-RBA system needs to be adjusted to comply with PP 28/2025. Additionally, each ministry and agency must issue their respective ministerial regulations as derivative rules of PP 28/2025.
The success of PP 28/2025 cannot rely solely on the government. Support is needed from all stakeholders, from the business community, academics, MSME support institutions, to civil society. The business community needs to actively provide input, optimally utilise existing systems, and maintain integrity in conducting their business. Support institutions and professional associations can also play a role in educating business operators, particularly MSMEs, so they can understand and take advantage of the facilities provided through this regulation.
Civil society, including the media, plays an important role in exercising social oversight of the regulation's implementation to ensure it remains accountable and is not misused.
Government Regulation Number 28 of 2025 represents a step forward in bureaucratic reform of business licensing in Indonesia. Through a risk-based approach, this regulation not only provides convenience but also delivers legal certainty, efficiency, and balanced protection between business operators and public interests.
Simplified licensing does not mean neglecting quality and responsibility. On the contrary, with a more structured system, better supervision, and strong collaboration between central and regional governments as well as business operators, PP 28/2025 is expected to serve as a catalyst for inclusive and sustainable economic growth.
PP 28/2025 is also expected to transform the business community's perception of government licensing services, from what was previously considered slow and non-transparent to something more measurable and reliable. Support from all levels of society for the implementation of this regulation is the key to truly realising a healthy, fair, and competitive business climate in Indonesia.