What Are the Business Licenses and Permits Requirements in Indonesia?
Starting a business in Indonesia that is legally operated depends on securing the right licenses and permits, a process now governed by the OSS Risk-Based Approach (OSS RBA) under Government Regulation PP 28/2025. With one of Southeast Asia’s fastest-growing digital economies and a licensing system that scales requirements to business risk rather than applying one-size-fits-all rules, knowing exactly which licenses your company needs is essential before operations begin.
This guide breaks down everything you need to know about business license and permit requirements in Indonesia from your first NIB application to ongoing compliance obligations.
What Is a Business License in Indonesia?
A business license in Indonesia is the legal authorization required to operate a company, issued once a business meets the requirements tied to its risk classification, sector, and scale. Every company, from a small consulting firm to a large PT PMA, must obtain the appropriate license before engaging in revenue-generating activities. Operating without one exposes a business to fines, forced closure, or revocation of its Business Identification Number (NIB).
How to Simplify The Business Licenses and Permits Approvals Process In Indonesia?
Indonesia issues business licenses through OSS-RBA, the Online Single Submission Risk-Based Approach, managed by BKPM under Government Regulation No. 28 of 2025. Applicants register on the OSS portal, select a KBLI business classification code, and submit company and capital data. The system then assigns a risk level that determines what’s required next.
Low-risk activities receive only the NIB (Nomor Induk Berusaha), which doubles as a business license and registration proof, often approved instantly. Medium-risk activities need the NIB plus a Standard Certificate. High-risk activities need the NIB plus full technical permits, taking one to two weeks or more. Entity type (PT or PT PMA) matters less than the KBLI code chosen, since foreign ownership can push a business into a higher risk tier regardless of structure.
How Do You Register Your Business and Obtain an NIB In Indonesia?
After completing tax registration, the next step is licensing under the OSS Risk-Based Approach (OSS RBA). This framework is currently governed by Government Regulation (PP) No. 28 of 2025 on Risk-Based Business Licensing, issued by the Ministry of Investment and Downstreaming/BKPM, which replaced the earlier PP 5/2021. The regulation determines what license a business needs based on the risk level of its declared activity.
Step 1: Create an OSS account
Access the OSS portal and register using an NIK (Indonesian ID number) for local applicants or a passport number for foreign nationals and PT PMA shareholders.
Step 2: Enter company data
Submit the entity’s legal name, business address, shareholding structure, and paid-up capital, matching the details from the deed of establishment approved by the Ministry of Law and Human Rights.
Step 3: Select the KBLI code
Choose the correct KBLI code (or codes) for every business activity the company will actually conduct. This selection is the single factor that determines the risk classification in the next step.
Step 4: Receive automatic risk classification
OSS assigns a risk level, low, medium-low, medium-high, or high, based on the KBLI code(s) submitted.
Step 5: Fulfill the risk-tier requirement
- Low risk: no further requirement; the NIB is issued directly.
- Medium-low risk: submit a self-declared Standard Certificate (Sertifikat Standar).
- Medium-high risk: submit a Standard Certificate that requires government verification before activation.
- High risk: apply for full technical permits and sector-specific approvals from the relevant ministry or local authority.
Step 6: Receive the NIB
The Nomor Induk Berusaha is issued once the applicable requirement is met. It functions as the company’s business identification number, import/export identity, customs access, and BPJS social security registration.
Step 7: Complete any post-licensing obligations
Depending on sector and risk tier, this may include environmental permits, building permits, or operational readiness inspections before the business can begin operating.
Step 8: File periodic investment activity reports (LKPM)
Medium and large enterprises report quarterly; small enterprises report semi-annually. Failure to file for two consecutive periods can trigger a system warning and, if ignored, freezing of the NIB.
What Are the Risk-Based Business License Categories Under OSS RBA?
Under OSS RBA, every business activity is assigned a risk level that determines its licensing burden:
- Low risk: An NIB alone is sufficient, and it doubles as company registration proof, import/export identification, and BPJS social security registration. Approval is typically near-instant.
- Medium-low risk: It requires an NIB plus a self-declared Standard Certificate (Sertifikat Standar).
- Medium-high risk: It requires an NIB plus a Standard Certificate that must be verified by the relevant ministry or regional authority, typically within one to two weeks.
- High risk: It requires an NIB plus a full operating license, which may take 30 to 60 days depending on technical or environmental review (e.g., AMDAL for environmentally sensitive activities).
Examples of higher-risk businesses include FinTech firms, construction companies, hotels, and spas.
What Licenses Does a PT PMA Need in Indonesia?
If your company is a PT PMA, you will need either a general business license or an industrial business license, depending on the nature of your business. An industrial business license (IUI) is required for manufacturing activities, excluding oil, gas, and geothermal industries.
A general business license (NIB) applies to activities such as trading and services. Specific business activities require specific licenses, such as a construction business license (SBU) for a construction company.
Which Business Licenses Can Be Processed Through OSS?
The OSS system consolidates three categories of licensing into a single online portal:
- Business Identification Number (NIB)
- Business licenses (Perizinan Berusaha)
- Operational and commercial licenses (Perizinan Berusaha untuk Menunjang Kegiatan Usaha)
Applicants register using their NIK (for Indonesian nationals) or passport (for foreign investors), select the correct KBLI classification code for their business activity, and submit company and investment data.
Once verified, the NIB is issued automatically for low-risk activities, while medium- and high-risk activities are routed for further certification.
Which Sectors Require Licenses Outside the OSS System?
Certain heavily regulated sectors still require additional approval from their respective ministries, layered on top of not replacing the standard OSS RBA process. These include:
- Electricity
- Mineral and coal mining
- Oil and gas
- Public housing and public works
- Customs and taxation
- Capital investment in restricted sectors
Businesses in these sectors should plan for longer approval timelines and additional documentation beyond the standard NIB process.
What Ongoing Compliance Is Required After Getting a License?
Holding a license is not a one-time event. Under PP 28/2025, oversight is largely ex post (after issuance) and centers on the Investment Activity Report (LKPM), which must be filed through OSS:
- Medium and large businesses report quarterly, by the 15th of the month following each quarter.
- Small enterprises report semi-annually.
Failure to submit LKPM for two consecutive periods triggers an automatic system warning; continued non-compliance can result in the NIB being frozen and OSS portal access being suspended. Businesses should also update their OSS registration whenever their business address, capital, management, or activity scope (KBLI code) changes.
Why Choose 3E Accounting for Your Business Licenses and Permits in Indonesia?
Indonesia’s licensing landscape has shifted meaningfully with the introduction of PP 28/2025 and KBLI 2025, and staying compliant now depends as much on ongoing reporting as it does on the initial application. Businesses that treat licensing as a one-time task risk falling out of compliance without realizing it, which can freeze operations at the worst possible moment.
3E Accounting helps foreign and local businesses navigate every stage of Indonesia’s licensing framework, from KBLI classification and NIB registration to sector-specific approvals and quarterly LKPM reporting. With in-depth regulatory knowledge and meticulous document preparation, we ensure your business stays fully licensed, compliant, and ready to operate.
