GR 28/2025: A Step-by-Step Guide to Indonesia's New Business Licensing System

As of June 5, 2025, Indonesia has enacted Government Regulation No. 28/2025 (GR 28/2025), fundamentally reforming the business registration and licensing framework. This regulation introduces a more flexible, risk-based approach and further streamlines the digitalization of procedures via the OSS — Online Single Submission — platform.

This article explains how the new system works, what documents are required, and what both local and foreign investors need to consider when planning to establish a company in Indonesia in 2025–2026.

Key Objectives of GR 28/2025

GR 28/2025 is part of the ongoing reform to foster investment and simplify commercial activity registration. The regulation’s main objectives include:

Shifting from a one-size-fits-all model to a risk-based assessment scheme.
Full digitalization of licensing procedures via the national OSS portal.
Enhancement of procedural transparency and reduction of administrative hurdles.

In practical terms, your business risk profile now determines how many documents and permits you need before launching operations.

Risk Classification under GR 28/2025

According to GR 28/2025, every business activity is categorized into four levels of risk, each with its own licensing requirements:

Low Risk: Requires only a NIB (Business Identification Number).
Lower-Medium Risk: Requires a NIB and a Standard Certificate (sertifikat standar).
Upper-Medium Risk: In addition to the above, technical documentation and approvals are necessary.
High Risk: Comprehensive licenses are mandatory, such as environmental assessments, building permits, etc.

Selecting the correct KBLI code (Indonesia Standard Business Classification) is critical to ensuring a proper risk assessment. The KBLI affects not only your category but also determines the relevant authorities involved.

OSS as the Central Digital Gateway for Business Registration

The OSS system centralizes all business registration processes in Indonesia. Under GR 28/2025, its scope and capabilities have expanded:

The licensing application process is now exclusively online, conducted via OSS.
Improved integration across ministries: participating agencies have increased from 5 to 8, including social and educational institutions.
The platform now covers emerging sectors such as creative industries, cooperatives, PPPs, social security, education, and more.

OSS serves as the single entry point for all business types—from sole proprietors to multinational corporations.

Document Preparation: Your Starting Point for a License

Before registering on the OSS platform, you must compile a core set of legal and spatial planning documents:

KKPR (Spatial Utilization Conformity): Approval of land use based on regional spatial policy.
Environmental Permit: Based on environmental impact (UKL-UPL for basic projects, AMDAL for high-risk projects).
PBG (formerly IMB): Building construction permit issued by local authorities.
SLF (Building Use Certificate): Issued after construction completion, indicating proper usage approval.
KBLI: Precise classification of your economic activity.

Important: Mistakes in selecting the KBLI code are the leading cause of application rejections. Use the official KBLI classification tool for verification.

How GR 28/2025 Affects Foreign Investors

GR 28/2025 establishes a dual-impact framework: on one hand, it simplifies starting a business; on the other, it increases compliance scrutiny.

Implications for foreign businesses include:

Fast-track NIB registration and streamlined procedures for low and medium-risk activities.
Standardized and public requirements, reducing subjective barriers.
Online tracking of application and document status via OSS.
Heightened focus on compliance with environmental, spatial, and construction regulations.
DNI (Negative Investment List) still limits ownership in certain sectors — always consult the latest version before proceeding.

Step-by-Step Company Registration Under GR 28/2025

Identify your business activity’s KBLI code.
Use the OSS portal to determine the risk level of your activity.
Apply for KKPR via your local planning department.
If applicable, obtain an Environmental Assessment (AMDAL or UKL-UPL).
Secure construction permits: PBG first, then SLF post-construction.
Register on OSS.go.id and apply for your NIB.
Submit all additional documents as required by your project’s risk profile: standard certificates, sectoral licenses, etc.
Once all permits are issued, you may officially commence business operations.

Top 5 Common Mistakes in Business Registration

Incorrect KBLI code that doesn’t align with actual business activities.
Lack of KKPR approval, which halts NIB issuance in certain sectors.
Neglecting environmental requirements for medium- and high-risk projects.
Submitting incomplete document packages via OSS.
Ignoring ownership restrictions under the Negative Investment List (DNI).

Conclusion

GR 28/2025 lays the foundation for a more transparent and digitized business regulatory environment in Indonesia. While its classification system demands rigorous documentation, the updated rules offer significant advantages to companies prepared to operate in compliance with established standards via the OSS platform.

To avoid delays or legal risks, it’s highly recommended to consult with licensed business advisors and assess your risk classification early in the planning stage.

In summary, GR 28/2025 is not a barrier — it’s a tool. When approached correctly, it paves the way for scalable and sustainable business in Southeast Asia’s largest economy.