Government Streamlines Business Registration Bureaucracy for Micro-Enterprises Through New Circular
JAKARTA, KOMPAS.com – The Ministry of Investment and Downstreaming/BKPM has issued a new circular aimed at simplifying the process of obtaining a Business Identification Number (NIB) for micro-enterprises.
This regulation is designed to reduce administrative obstacles, particularly those related to location permits or the Approval of Conformity of Space Utilisation Activities (PKKPR), which have often slowed down the issuance of NIBs.
Deputy Minister of Investment and Downstreaming, Todotua Pasaribu, stated that the policy is a response to various complaints from micro-enterprises that have difficulty obtaining NIBs due to delays in the location permitting process.
“We at the Ministry of Investment and Downstreaming have now issued a Circular from the Minister of Investment and Downstreaming/Head of BKPM Number 1S Year 2026 regarding the Provisions for the Issuance of Conformity of Land Space Utilisation Activities for Micro-Enterprises,” said Todotua Pasaribu at a press conference at his office on Tuesday (24/2/2026).
He explained that the circular stipulates that micro-enterprises can now submit a self-declaration regarding the location of their business.
This mechanism allows the approval to be processed automatically without having to go through the technical inspection stage as in the previous procedure.
“The PKKPR still exists, but it can be done with a self-declaration,” he said.
“So, it is enough to state the location and address, without the need for further technical verification, and the NIB can then be issued,” he added.
Todotua affirmed that this policy will not stop at the circular level.
In the next three months, the government plans to elevate the legal framework to a Ministerial Regulation to provide a stronger and more binding legal basis.
Ministry data shows that, to date, approximately 15.2 million Business Identification Numbers (NIBs) have been issued. Of this number, approximately 14.9 million are from micro-enterprises.
Meanwhile, the potential number of micro-enterprises in Indonesia is estimated to reach 56 million units.
Therefore, there are still approximately 40 million micro-enterprises that do not have formal legal recognition.
He added that this simplification of the permitting process will not only benefit businesses but also have a positive impact on the country.
The more MSMEs that are officially registered, the greater the potential for increased contribution to state revenue and the strengthening of the national economic base.
“This will automatically increase the revenue contribution from the MSME sector,” he emphasised.
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