Renewal of Industrial Business Licensing Mechanisms Based on Minister of Industry Regulation Number 37 of 2025
Summary
Regulation of the Minister of Industry Number 37 of 2025 regarding Business Activity Standards and/or Product/Service Standards in the Implementation of Risk-Based Business Licensing for the Industrial Sector (“MOI Regulation 37/2025”) was issued by the Minister of Industry of the Republic of Indonesia as an implementing regulation for Government Regulation Number 28 of 2025 regarding the Implementation of Risk-Based Business Licensing [Perizinan Berusaha Berbasis Risiko] (“GR 28/2025”).
Effective as of 5 October 2025, this regulation sets out the standards and procedures for industrial business licensing, which now adopts a risk-based approach. The objective of this regulation is to provide legal certainty and simplify the licensing process by integrating the Online Single Submission (OSS) system and the National Industrial Information System (SIINas).
Background and Context
The issuance of this Ministerial Regulation was driven by the mandate to implement the provisions of GR 28/2025. As an implementing regulation of the Job Creation Law [Undang-Undang Cipta Kerja], said Government Regulation shifts the licensing approach from a permit-based system to a risk-based one.
Therefore, the Ministry of Industry needed to stipulate business activity standards and product/service standards specific to the industrial sector. This regulation is designed to provide a clear framework, ensuring that the obligations to be fulfilled by business actors are commensurate with the risk level of their business activities.
Comparison with Previous Regulations
MOI Regulation 37/2025 revokes and replaces three previous regulations, namely:
-
Regulation of the Minister of Industry Number 15 of 2019 regarding the Issuance of Industrial Business Licenses and Expansion Licenses within the Framework of Electronically Integrated Business Licensing Services (“MOI Regulation 15/2019”);
-
Regulation of the Minister of Industry Number 45 of 2019 regarding the Procedures for Granting Industrial Estate Business Licenses within the Framework of Electronically Integrated Business Licensing Services (“MOI Regulation 45/2019”); and
-
Regulation of the Minister of Industry Number 9 of 2021 regarding Business Activity Standards and/or Products in the Implementation of Risk-Based Business Licensing for the Industrial Sector (“MOI Regulation 9/2021”).
This change marks the full transition to the risk-based business licensing system.
| Aspect | MOI Regulation 15/2019, MOI Regulation 45/2019, and MOI Regulation 9/2021 | MOI Regulation 37/2025 |
| Primary Legal Framework | Refers to implementing regulations prior to the Job Creation Law and the initial implementation of the risk-based OSS system. | Directly based on GR 28/2025 as an implementing regulation of the Job Creation Law. |
| Licensing Approach | Previous licensing focused more on Industrial Business Licenses (IUI) and Industrial Estate Business Licenses (IUKI), although MOI Regulation 9/2021 had begun to introduce a risk-based approach. | Provides detailed classification of industrial business activities into four risk levels: low, medium-low, medium-high, and high, with different licensing types for each level. |
| Verification Process | Verification mechanisms for standards compliance were not regulated in a detailed or structured manner. | Regulates a highly detailed verification workflow for medium-high and high-risk businesses, from submission via SIINas, document examination, field verification, to the issuance of a Verification Report within a stipulated timeframe. |
| System Integration | Integration between OSS and SIINas existed, but the workflow and data exchange were not specifically detailed. | Emphasizes close integration between the OSS System and SIINas, where each stage of the licensing process provides mutual notifications to ensure smooth data flow. |
Key Provisions
The main substance of this regulation is reflected in the following key provisions:
| Regulatory Aspect | Provisions | Article(s) |
| SIINas Account Obligation | Every business actor applying for a Business License (PB) in the industrial sector is required to have an account in the National Industrial Information System (SIINas). This account is the main prerequisite before starting the process in the OSS system. | Article 4 |
| Risk-Based Licensing Mechanism |
PB is issued according to risk level:
|
Articles 5 to 9 |
| Technical Verification Process | For medium-high and high-risk businesses, verification is conducted via SIINas. This process includes examining document completeness and may be accompanied by field verification. Business actors are given 10 working days for document correction (maximum 2 revisions) before the application is rejected. | Articles 10 & 11 |
| Facility for a Single Production Line | Business actors with more than one product under different Indonesian Standard Industrial Classification [Klasifikasi Baku Lapangan Usaha Indonesia (KBLI)] codes but within a single integrated production line may combine the verification process. Verification will be conducted based on the KBLI with the highest risk level. | Article 13 |
| Supporting Business Activity Licenses | This regulation also governs various types of licenses that support primary business activities, such as Local Content certificates (TKDN), recommendations for specific natural gas users, and hazardous material registration letters. | Article 14 |
| Post-Issuance Supervision | Supervision is conducted after the PB is issued. For low and medium-low risk, supervision is carried out no later than 1 year after PB issuance. For medium-high and high risk, supervision is carried out sooner, i.e., no later than 3 months after PB issuance. | Article 15 |
| Obligation to Locate in an Industrial Estate | Industrial companies are obligated to be located in an Industrial Estate. Exemptions are granted if the relevant regency/city does not yet have an Industrial Estate, the plots are fully occupied, for specific small and medium industries, or for industries whose processes require a specific location. | Articles 16 to 20 |
| Administrative Sanctions | Violations of provisions, such as not possessing a PB, not being located in the designated area, or not conducting business activities for 3 consecutive years, will be subject to administrative sanctions in the form of written warnings, fines, temporary closure, freezing, to PB revocation. | Article 21 |
| Transitional Provisions | Applications for Risk-Based Business Licensing (PBBR) for medium-high and high risk that are currently in process will be continued following the mechanisms in this regulation. Business actors that already possess a Spatial Utilization Conformity (KKPR) document before this regulation took effect, no longer need to undergo location conformity verification. | Article 23 |
| Revocation of Previous Regulations | With the entry into force of this regulation, MOI Regulation 15/2019, MOI Regulation 45/2019, and MOI Regulation 9/2021 are officially revoked and declared no longer valid. | Article 24 |
Conclusion
MOI Regulation 37/2025 establishes a new legal framework for licensing in the industrial sector, aligned with the risk-based business licensing system, by providing a more structured workflow and creating certainty for business actors.
Three key points to note include:
-
The obligation to understand the business risk level classification, as this will determine the type of license and the procedures to be followed.
-
The need to ensure data completeness in the OSS and SIINas systems, as these two systems are central to the entire licensing and verification process.
-
The rules regarding the obligation to locate in an Industrial Estate and its various criteria must be carefully observed when planning business activities.
What is
Veritask is an integrated AI-powered legal platform that helps with regulatory research, document preparation, and compliance management in one dashboard.
Berlangganan untuk menerima email mingguan gratis berisi analisis hukum terbaru.
