License Revocation in Indonesia: How to Mitigate Risks in 2025

Starting September 1, 2025, new regulations governing business operations and reporting will come into force in Indonesia. Companies registered in the country are facing a digital transformation of administrative procedures: the issuance and management of licenses and permits will now be automated. Failure to comply with these new requirements may result in license suspension or revocation — without any manual review by officials.

This article explains how companies — including foreign-invested businesses — can avoid document handling mistakes and prevent sanctions under the new OSS (Online Single Submission) system.

What Has Changed with the New Regulations?

Online OSS Platform: Now Mandatory

The Indonesian government has implemented the OSS (Online Single Submission) system as a universal digital interface for business-to-government communications. From now on, all registration, licensing, and reporting actions must be completed through this platform, including:

Submitting financial and legal reports,
Updating shareholder and company executive data,
Requesting changes to business activities or opening new branches,
Managing commercial activity licenses (Izin Usaha),
Fulfilling pre-licensing requirements.

Using OSS eliminates the need for in-person visits to government offices—but requires strict consistency. Any delay or error is automatically flagged by the system as a violation.

Automated Suspension or Revocation of Licenses

As of September 1, 2025, the mechanism for automated license verification and revocation will begin, based on updated regulations available through the official OSS platform and the Ministry of Investment / BKPM (bkpm.go.id).

The system will suspend or revoke licenses in the following cases:

Failure to submit reports for more than six months,
Outdated information in OSS (legal address, board of directors),
Using the license for purposes inconsistent with registered KBLI codes,
Lack of tax activity or invalid NPWP (tax identification number),
No actual business operations at the registered address.

Important: the legal status of the license is what is suspended — it can be reinstated if issues are resolved. Ignoring the regulations, however, results in full and final revocation.

The Right to Restore a License Does Exist

The automated OSS system allows for recovery of suspended licenses, provided the following steps are taken within a designated timeframe:

Resolve the cause of suspension (such as submitting overdue reports or updating your OSS profile),
Submit a reinstatement request through OSS,
In certain cases — attach an explanatory letter via an authorized company representative.

Once a license is fully revoked, recovery is only possible through re-establishing the company from scratch — a process involving significant time and financial costs.

Who Is Especially at Risk Under the New System?

The automation of license revocation poses higher risks to certain business types. Here's a risk matrix based on company category:

Business Type	Potential Risk	Recommended Actions
Newly Registered Companies	No established reporting mechanisms	Set up compliance from the first month
Companies with Foreign Shareholders	Lack of familiarity with local regulations	Hire a legal adviser or corporate secretary
Inactive Companies	No activities or reports filed	Maintain legal activity status, even without operations
Companies in SEZ (Special Economic Zones)	Additional reporting obligations	Comply with specific regional regulations

How to Prevent License Revocation in Indonesia

1. Use OSS Daily

Make OSS your company’s primary compliance tool. Regularly verify:

Reporting deadlines and approval statuses,
Accuracy of your company’s profile,
Incoming government notices (via the “Communications” section).

Ignoring official system alerts is interpreted as a failure to meet administrative obligations.

2. Adhere to Documentation Submission Schedules

Depending on your business activity, you are required to submit:

Annual Financial Reports (in both English and Bahasa Indonesia),
Tax Filings:
- PPh 21 — for employee payroll,
- PPh 23 — for services/royalties,
- PPh Badan — corporate income tax,
- VAT (if applicable to your business).
Operational Activity Report — mandatory in SEZ areas.

All forms must be completed and uploaded via OSS or through the DJP Online tax portal.

3. Keep Company Registration Data Updated

Outdated addresses or executive info can result in deactivation. Ensure the following are current:

Founders and board member information,
Legal and operational addresses,
NPWP (company tax ID),
Registered business activities (KBLI codes) — especially if changes occur.

Even minor discrepancies may trigger license deactivation automatically.

4. Monitor Your Izin Usaha Validity Period

Izin Usaha is the business license allowing operations in specific industries. In some cases, a temporary version — Izin Usaha berlaku sementara — is granted and must be validated within 30 days of starting activity.

Missing this deadline triggers auto-deactivation. In some instances, reinstatement is only possible through full reapplication for a new license.

5. Assign a Compliance Officer

It is strongly advised to formally appoint a person responsible for regulatory compliance. This could be:

A local corporate secretary,
A professional legal or accounting firm,
An in-house legal counsel with access to OSS and DJP systems.

For foreign-owned companies, this is critical — most sanctions arise from a lack of awareness or missed timelines.

Conclusion

Indonesia’s business licensing system is moving into full digitalization. Beginning in 2025, any error in reporting or data inconsistency will be automatically recorded and may result in penalties — from temporary suspension of business operations to full license revocation.

To avoid these outcomes, companies must:

Use OSS as the central operations platform,
Submit all reports on time,
Ensure legal accuracy of data,
Engage qualified personnel familiar with Indonesian compliance laws.

Important: License reinstatement is a complex and costly process. It is far easier to follow the rules and keep your documentation accurate from day one.