On June 18, at the “CNBC Indonesia 2025 Economic Outlook” event, Ferry Irawan, the Deputy Minister for Economic Coordination, clearly stated that one of the core goals of the previously issued Government Regulation No. 28 of 2025 (PP 28/2025) is to provide clear time guarantees for businesses to obtain business licenses.
This reform aims to significantly reduce the institutional costs for businesses to establish and operate in Indonesia through systematic measures. In particular, for Chinese companies planning to set up factories in Indonesia, the process of project implementation will be simplified, and the time cost will be reduced. This marks a key step for Indonesia in creating an efficient, transparent, and low-threshold investment environment.
Policy Interpretation: Four Core Elements
I. Setting Clear Approval Time Limits and Introducing an Automatic Flow Mechanism
Core Commitment: The new regulations strictly stipulate that government departments must complete the approval of basic requirements, main business licenses (PB), and supporting business licenses (PB UMKU) within the committed Service Level Agreement (SLA) time limits.
Efficiency Guarantee: Most importantly, if a certain approval stage is not processed within the time limit, the application will automatically flow to the next stage. This effectively prevents the approval process from being “stuck” due to departmental delays and is a key breakthrough in improving efficiency.
II. Streamlining the Application Materials for Business Licenses (PB)
Eliminating Duplicate Submissions: The new regulations have abolished the requirement of using the Identity Card (KTP) and Taxpayer Registration Number (NPWP) as prerequisites for issuing PB. The reason is that this information has already been registered during the establishment of the enterprise’s legal entity (such as the registration of a foreign-owned company PT PMA), and there is no need to provide it repeatedly later.
Unbinding Non-Essential Pre-Conditions: At the same time, it is no longer mandatory for companies to obtain the supporting business license (PB UMKU) before applying for the main business license (PB). The new regulations clarify that PB UMKU should be a permit that needs to be handled after the company has obtained PB and entered the actual operation stage.
III. Restructuring and Significantly Streamlining the Supporting Business License (PB UMKU)
Clarifying the Applicable Stage: Following the above unbinding requirements, the new regulations clearly define that PB UMKU is only applicable after the company starts actual operations or business activities.
Scientific Classification and Sharp Reduction in Quantity: Based on this positioning, the government has restructured and streamlined PB UMKU into four clear categories:
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Product Distribution License
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Operational Feasibility License
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Product or Service Standardization License
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Business Activity Smoothness License
Significant Burden Reduction: Operational permits that do not belong to the above four categories are no longer included in the scope of PB UMKU. This fundamental adjustment has reduced the number of PB UMKU from over 1,000 to about 350, greatly reducing the compliance burden on companies during the operation stage.
IV. Implementing Integrated Supervision to Reduce Duplicate Inspections
Unified Target: To complement the above process simplification and reduce interference with business operations, the new regulations have introduced an “Integrated Inspection and Reporting” mechanism.
Platform Support: This mechanism is implemented through the sub-supervision system of the Online Single Submission (OSS RBA) system.
Benefits for Companies: By promoting coordination across government departments, it effectively avoids duplicate inspections by different departments on the same company, making supervision more efficient and companies more hassle-free.
