Indonesia’s regulatory landscape has undergone significant transformation with the issuance of Government Regulation No. 28 of 2025, which reinforces the risk-based approach to business licensing and strengthens integration through the Online Single Submission (OSS) system.
In this framework, the Klasifikasi Baku Lapangan Usaha Indonesia (KBLI) is no longer merely an administrative classification, but a fundamental element in determining the licensing structure for foreign investment companies (Perseroan Terbatas Penanaman Modal Asing or PT PMA).
The Evolving Role of KBLI
KBLI serves as the official classification system used to identify business activities in Indonesia. Under the latest regulatory regime, KBLI is directly integrated into the OSS risk-based system, where each selected KBLI code automatically determines the level of business risk.
Read More: The Strategic Impact of KBLI 2025 on Foreign Investors’ Market Entry into Indonesia
Business activities are categorized into four levels: low, medium-low, medium-high, and high risk. This classification serves as the basis for determining the types of licenses a company must obtain.
As a result, the selection of KBLI has become a strategic decision, as it directly shapes the entire licensing structure applicable to a PT PMA.
Transformation of the Licensing Structure
Government Regulation No. 28 of 2025 marks a shift from a uniform, administrative licensing system to a more structured and risk-based framework.
Each level of risk corresponds to different licensing requirements:
- Low-risk: only a Business Identification Number (NIB) is required
- Medium-risk: requires NIB and a standard certificate
- High-risk: requires NIB, additional permits, and verification from relevant authorities
This layered approach demonstrates that licensing is no longer standardized but tailored to the specific characteristics of each business activity.
Strengthened OSS Integration
A key feature of the new regulatory framework is the enhanced role of the OSS system as a fully integrated platform. All licensing processes, from application to supervision, are conducted within a single system.
In practice, once a company selects its KBLI:
- the OSS system automatically assigns the risk level
- the system determines the required licenses
- licensing processes may run in parallel
While this integration improves efficiency, it also reduces flexibility. Companies can no longer adjust licensing requirements outside the system, making accurate KBLI selection critically important.
Increased Legal Risks for PT PMA
With tighter integration and stricter supervision, legal risks for PT PMA have also increased. Any mismatch between the registered KBLI and the company’s actual business activities may lead to serious consequences, including:
- administrative sanctions
- suspension or revocation of licenses
- operational disruptions
KBLI, therefore, is no longer a mere administrative element but a key factor in legal risk management.
Complexity for Multi-Activity Businesses
Foreign investment companies often engage in multiple business activities. Under the current system, each activity must be properly reflected through the appropriate KBLI codes in the OSS system.
This results in a more complex and granular licensing structure, as:
- multiple KBLI codes may be required
- each KBLI may carry different risk levels and licensing obligations
- compliance management becomes more detailed
Accordingly, companies must adopt a more strategic approach in structuring their business activities and licensing framework.
Implications for Due Diligence and Investment
These regulatory changes also have significant implications for legal due diligence, particularly in mergers and acquisitions. Investors and legal advisors must ensure that:
- the KBLI accurately reflects the company’s actual operations
- all licensing requirements have been fulfilled in accordance with the applicable risk classification
- no inconsistencies exist that may create hidden liabilities
Given the central role of KBLI in the licensing system, this aspect has become a critical component in legal assessment and investment decision-making.
Conclusion
Government Regulation No. 28 of 2025 introduces a fundamental shift in Indonesia’s business licensing regime by strengthening the integration between KBLI, risk classification, and the OSS system. For PT PMA, KBLI now serves as the key determinant of the overall licensing structure.
Under this more integrated and stringent framework, companies must exercise greater care in selecting KBLI codes, ensuring compliance, and managing legal risks. Licensing is no longer a procedural formality, but a strategic element that directly impacts business sustainability and regulatory compliance in Indonesia.
