Government Regulation Number 28 of 2025 Refines Business Processes and Strengthens Service Quality Assurance for Business Licensing

1. Introduction

1.1 Background

Government Regulation Number 5 of 2021 on the Implementation of Risk-Based Business Licensing [Penyelenggaraan Perizinan Berusaha Berbasis Risiko (PBBR)] (“GR 5/2021”) implements Law Number 11 of 2020 on Job Creation. However, GR 5/2021 was revoked and replaced by Government Regulation Number 28 of 2025 on the Implementation of Risk-Based Business Licensing ("GR 28/2025") following the enactment of Law Number 6 of 2023 on the Enactment of Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation into Law (“Law 6/2023”).

1.2 Problem Identification

1. What substantial changes does Government Regulation Number 28 of 2025 (“GR 28/2025”) stipulate compared to GR 5/2021, particularly regarding licensing mechanisms and business process flow arrangements?
2. What impact do the changes to the Risk-Based Business Licensing (PBBR) arrangements under GR 28/2025 have?

2. Philosophical Foundation and Legal Mandate for Establishing the Regulation

2.1 Comparison of Key Definitions and Concepts of RBBL

The definition of RBBL has been refined to clarify the basis for risk determination. Under GR 5/2021, RBBL is defined as "Business Licensing based on the Risk level of business activities". GR 28/2025 further refines this definition to "business licensing that uses a risk-based approach obtained from the results of risk analysis for each business activity".  Emphasizing the "risk-based approach" and the "results of risk analysis"  provides a clearer and more detailed foundation for risk assessment.  This aligns with GR 28/2025's objective of further providing legal certainty to businesses.

2.2 Scope Limitations and Business Sectors in GR 28/2025

GR 28/2025 expands and adjusts the RBBL sectors established in GR 5/2021 to accommodate all business activities:

3. Risk Classification and Implementation of Business Licensing (PB)

3.1 Criteria and Mechanism for Determining Risk Levels

The risk level is determined based on the results of a risk analysis. This analysis includes identifying the business activity and business scale, as well as assessing the hazard level and  potential occurrence.  This risk analysis classifies business activities into one of four risk categories: Low, Medium-Low, Medium-High, and High.

3.2 Comparison of Licensing Types (NIB, Standard Certificate, License) based on Risk

The following table compares licensing types based on risk level between GR 5/2021 and GR 28/2025.

Comparison Table of PB Types vs. Risk Level

4. Comparison of Prerequisites  I: Suitability of Spatial Utilization (KKPR/KKPRL)

4.1 Analysis of KKPR Confirmation and KKPR Approval Mechanisms

Pursuant to GR 28/2025, a Business License (PB) requires the fulfillment of Prerequisites, one of which is the Suitability of Spatial Utilization Activities (“KKPR”) and the Suitability of Marine Spatial Utilization Activities (“KKPRL”).

Comparison Table of KKPR Approval Procedures (RDTR Not Yet Available)

4.2 Regulation on Marine Spatial Utilization Obligations (KKPRL)

GR 28/2025  establishes the procedure for the Suitability of Marine Spatial Utilization Activities (KKPRL) (Article 65),  which is a fundamental requirement that must be met for business activities at sea. KKPRL Approval is required for permanent business activities in a part of the marine space, including the sea surface, water column, and/or seabed. Permanent activities are defined as  those carried out continuously for a minimum of 30 calendar days (Article 66 paragraphs 2 and 3).

The KKPRL licensing process is carried out  in stages with specific time limits (Service Level Agreement/SLA) as follows:

1. Registration and Examination: The Businesses  submit an application through the OSS System. The correctness of the documents for the proposed marine spatial utilization activity documents must be  verified within a maximum period of five Working Days from when the documents are received in full (Article 68 paragraph 1).
2. Substance Assessment:  A review of the documents, which includes a review of conformity with the applicable marine spatial plan, is carried out within a maximum of 20 Days (Article 69 paragraph 2).
3. PNBP Payment: If the documents are approved, the OSS System will issue a PNBP (Non-Tax State Revenue) payment order within a maximum of two Days of  approval. The Businesses must pay the PNBP within seven calendar days (Article 69 paragraph 3, Article 71 paragraph 1).
4. KKPRL Approval Issuance: After proof of PNBP payment is received, the KKPRL Approval must be issued through the OSS System within a maximum of six Days (Article 73).

Affirmation of Legal Certainty (Constructive Approval): Similar to KKPR on land, KKPRL Approval is also subject to a constructive approval mechanism. If the issuance period (six Days after the PNBP payment) is exceeded, the KKPRL Approval is issued automatically by the OSS System (Article 75).

Coordination Efficiency: If recommendations from other ministries or institutions are required and these recommendations are not provided within five Days, the assessment process must proceed without them (Article 74 paragraphs 2 and 3). This provision is intended to prevent delays in the licensing process due to slow responses between institutions.

 

5. Comparison of Prerequisites  II: Environmental Approval (PL)

For Amdal (High Risk) has a Substance Assessment/Feasibility Test limit of a Maximum of 50 Days. For UKL-UPL (Medium-Low Risk), the process is set to be Automatic through the OSS System.

According to GR 28/2025  Technical Approval (Pertek)  is a mandatory administrative requirement for applying for Environmental Approval (PL) with Amdal or UKL-UPL documents (Article 80). Pertek includes quality standards for wastewater, emissions, and B3 (Hazardous and Toxic Waste) management.

 

6. Regulation of Prerequisites  III: Building Approval (PBG) and SLF

A Building Approval (PBG) is required for the construction of Buildings. The process  involves the Planning Consultation and Issuance stages. A Certificate of Building Worthiness (SLF) must be obtained before the Building can be used  (Article 122). GR 28/2025 eases the transition by exempting buildings that were already standing without a PBG before this GR took effect are exempted from the obligation to obtain a PBG;  these buildings may apply directly for an SLF.

Verification of functional worthiness for SLF issuance can be carried out by a Technical Assessor (third party) or a Technical Assessment Team. All PBG and SLF processes are regulated and processed electronically through the OSS System.

 

7. Business Licensing for Supporting Business Activities (PB UMKU)

Business Licensing (PB) refers to the legal authorization required  to start and operate a business. Business Licensing for Supporting Business Activities (PB UMKU), on the other hand, refers to the legal authorization required at the operational and/or commercial stage to support business activities.

Table of Criteria for PB UMKU Needs

Licensing for export and import activities, as well as the fulfillment of provisions on prohibitions or restrictions on exported and imported goods is not included in PB UMKU. Instead, the licensing process for these activities is transferred through the Indonesia National Single Window (INSW) system.

 

8. Norms, Standards, Procedures, and Criteria (NSPK)

GR 28/2025 established the role of Norms, Standards, Procedures, and Criteria (NSPK) (Article 137) as the sole reference for all RBBL implementers at the Central, Regional, Special Economic Zone (KEK) Administrator, and Free Trade Zone and Free Port (KPBPB) Authority levels.

Overall, GR 28/2025 expands the scope from 16 sectoral groupings in GR 5/2021 to 22 sectors overall. This expansion includes separating the Environment and Forestry sectors, which were previously combined, and accommodating several new sectors, such as the Creative Economy, Geospatial Information, Cooperatives, and Investment sectors (Article 5 paragraph 2).

GR 28/2025 regulates NSPK  to ensure clear, single standards for each stage of business activity across all levels of government. Examples of refinement in sectoral regulation include:

1. Energy and Mineral Resources (EMR) Sector: GR 28/2025 exempts the new energy, renewable energy, and energy conservation, as well as the mineral and coal subsectors from the Suitability of Spatial Utilization Activities (KKPR) obligation for Business Licensing (PB) at the survey and exploration stage (Article 143 paragraph 3). This exemption alignes with the non-construction nature of initial activities in the EMR sector.
2. Industry Sector: Industrial business activities must be located in industrial estates, However, there are  exemptions for Micro and Small Enterprises (UMK), small-scale industries, or industries using specific raw materials or processes. These industries are still required to be located in areas designated for industry according to the Spatial Plan (RTR) (Article 151 paragraphs 1, 2, and 3).
3. Investment Sector: (Article 185) This sector was added to provide an RBBL framework for business activities that do not yet have a ministry or institution as a guardian (such as  law offices or other management consulting firms). This ensures that all types of business activities have a structured licensing standard.

9. The OSS System and Service Quality Assurance

Compared to GR 5/2021, GR 28/2025 expands the scope of the OSS subsystems

GR 28/2025 enhances legal certainty by setting precise and clear timeframes (SLA) for the PB process.

 

10. Comparison of Supervision and Accountability Mechanisms

Comparison Table of Routine Supervision Procedures

GR 28/2025 requires establishing a Business Profile based on the results of routine report reviews and/or field inspections. This profile is categorized as follows: Very Good, Good, Less Good, or Not Good.

 

11. Sanctions Provisions

11.1 Sanctions for Government Officials

GR 28/2025 establishes administrative sanctions for Ministers, Heads of Institutions, Governors, Regents/Mayors, KEK Administrators, and Heads of KPBPB Authorities who  fail to implement Risk-Based Business Licensing (RBBL) through the OSS System.

• Process: Sanctions are given in the form of written warnings, which can be issued up to 2 (two) times.
• Consequence: If the second written warning is still not implemented, a takeover of authority (ambil alih) will be imposed. For example, the OSS Institution will take over the authority to issue licenses that would normally be under the jurisdiction of that ministry or institution. Alternatively, the Governor (as a representative of the Central Government) will take over the authority of the Regent/Mayor.
• Individual Sanctions: Officials who are proven to not provide services or conduct supervision according to the provisions will also be subject to individual sanctions in accordance with the laws and regulations on state civil apparatus.

11.2 Sanctions for Businesses 

Businesses who violate the provisions of the prerequisites , PB, and/or PB UMKU may be subject to administrative sanctions. Depending on the level of compliance found during supervision, these types of sanctions can be applied gradually or cumulatively.

Types of administrative sanctions include:

• Warnings;
• Temporary suspension of business activities;
• Imposition of administrative fines;
• Imposition of police coercive measures;
• Revocation of licenses, certifications, or approvals; and/or
• Revocation of prerequisites, PB, and/or PB UMKU.

11.3 Details of Sectoral Sanctions

a. Marine Affairs and Fisheries Sector (Articles 356-362):

• Types of Violations: Utilizing marine space without a KKPRL, failing to fulfill a PB, building ships without approval, and importing fishery commodities that do not comply with provisions.
• Mechanism: Written warnings or reprimands are given for first-time violations with minor impacts.
  If the violation is ignored or is serious (posing a direct threat to health or the environment), Government Coercion can be applied, including sealing, suspending  activities, or demolishing buildings.
• Fines: Administrative fines are imposed if warnings are ignored.
  For example, utilization of marine space that does not meet the requirement of KKPRL is subject to a fine of 2.5% of the total investment value. Fishing without a PB UMKU is subject to a progressive fine based on the ship's gross tonnage (GT), ranging from IDR 50 million (for 10-30 GT) up to IDR 250 million (for >150 GT).
• Final Sanction: If the fine is not paid, the sanction increases to Suspension of PB/KKPRL, and culminates in Revocation of PB/KKPRL.

b. Industry Sector (Articles 415-423):

Types of Violations: Failure to conduct business activities for three consecutive years or failure to be located in an industrial estate (or an area designated for industry for those who are exempted).

Sanctions:

1. Written Warning: Given three times, each with a 30-day interval.
2. Administrative Fine: Issued if the third warning is ignored. The maximum fine is 1% of the investment value.
3. Temporary Closure: This will occur if the fine is not paid within 30 days.
4. Suspension of PB: If the temporary closure is ignored, it will be suspended for three months. 
5. Revocation of PB: This is the final sanction if the Suspension of PB is ignored.

c. Post, Telecommunications, and Broadcasting Sector (Articles 472-510):

• Types of Violations: Using the radio frequency spectrum without a license, using uncertified devices, failing to pay the Radio Frequency Usage Right Fee (BHP), or transferring frequency usage rights without approval.
• Mechanism: Sanction mechanisms are often cumulative (applied simultaneously).
• Example (Illegal Spectrum Violation): Subject to three sanctions at once: Written Reprimand, Administrative Fine, and Imposition of Police Coercive Measures (in the form of halting transmissions and/or sealing equipment).
• Example (Late Payment of Frequency BHP): Subject to strict tiered sanctions: (a) Written Reprimand (three times); (b) Late Payment Fine; (c) Suspension of licensing services (given concurrently with the 1st reprimand); (d) Temporary suspension of operations (given concurrently with the third reprimand); and (e) Revocation of License.

d. Operation of Electronic Systems and Transactions (PSE) Sector (Articles 531-533):

Types of Violations: Failure to register the PSE, failure to provide correct data, failure to terminate access (take down) to prohibited content, or failure to provide data access for supervision and law enforcement purposes.

Sanctions:

1. Written Reprimand: Given if the PSE fails to remove prohibited content or grant  law enforcement access.
2. Temporary Suspension: Imposed if the written reprimand is ignored.
3. Access Blocking: This can be carried out if the PSE fails to register, ignores a temporary suspension, or fails to remove prohibited content.
4. Administrative Fine: This sanction targets User Generated Content (UGC) PSEs that fail to remove prohibited content.
5. Removed from the List: This is the final sanction, which involves  revoking the PSE's registered status.

e. Agriculture Sector (Article 363):

• Types of Violations: Non-compliance or violation of the PB or the PB UMKU.
• Sanctions for PB Violations: Written warning, administrative fine, temporary suspension of activities, product recall from circulation, revocation of PB, closure of business activities, and/or imposition of police coercive measures.
• Sanctions for PB UMKU Violations: These are the same as for PB violations, plus the option of destruction.

f. Forestry Sector (Article 366):

• Types of Violations: Non-compliance or violation of the PB in the forestry sector.
• Sanctions: Written reprimand, government coercion, suspension of government services, administrative fine, Suspension of the PB, and/or revocation of the PB.

g. Energy and Mineral Resources (EMR) Sector (Articles 369-382):

• Oil and Gas (Articles 369-370): Sanctions for PB/PB UMKU violations include written reprimand, temporary suspension, a fine, police coercive measures, and revocation.
  If business activities are carried out without a license, the sanctions are more severe  and may include suspension of business, fine, and government coercion, and the demolition of facilities and infrastructure.
• Electricity (Articles 371-373): Sanctions include a written reprimand, temporary Suspension of activities, a fine, and/or revocation of PB/PB UMKU.
  If the violation results in casualties or damage to K3L - Safety, Security, Health, and Environment, sanctions of Suspension or revocation may be applied directly.
• Minerals and Coal (Article 374): Sanctions include a written warning, temporary suspension (partial or entire activity), and/or revocation of the PB/PB UMKU.
  Violations of state revenue payment obligations will also be subject to fines.
• Geology (Groundwater) (Articles 379-380): Sanctions include a written warning, temporary suspension of all groundwater exploitation activities, and/or revocation of PB UMKU.

h. Nuclear Energy Sector (Articles 383-414):

• Types of Violations: Violations of PB/PB UMKU regarding the use of ionizing radiation sources, nuclear installations, nuclear materials, or the mining of nuclear minerals.
• Sanction Mechanism: It starts with tiered written warnings (3 times) with short timeframes (e.g., ten days).
• Sanctions: If the warnings are ignored, the sanctions will proceed to administrative fines (e.g., if periodic reports are not submitted), suspension of the PB/PB UMKU (which requires the halting of activities), and revocation of the PB/PB UMKU.
• Direct Sanctions: Revocation sanctions can be carried out directly if an accident occurs that endangers health, safety, or the environment.

i. Trade and Legal Metrology Sector (Articles 424-434):

• Business Without License: If a business is found to be operating without PB/PB UMKU, the following sanctions may be issued: a written reprimand, temporary suspension, fine, and/or government coercion.
• Compliance Violation: If a license is held but violated, the sanctions are a written reprimand, a fine, Suspension of the PB/PB UMKU, and/or revocation of the PB/PB UMKU.
• Police Coercive Measures: These include withdrawal of goods from distribution, closure of warehouses, or closure or blocking of electronic systems for online trading.

j. Public Works and Public Housing (PUPR) Sector (Articles 435-445):

• Construction Services (Article 435): Sanctions can include a written warning, fine, temporary suspension, revocation of the PB, and/or inclusion on the blacklist.
• Water Resources (Articles 437-438): Violations (including transferring licenses or closing public access to water sources) are subject to sanctions including a written warning, temporary suspension, suspension, policed coercive measures, and/or revocation of the PB/PB UMKU.
• Highways, Human Settlements (Water Supply Systems - SPAM), and Housing: Includes warnings, suspension, and/or revocation for violations in the toll road, non-toll road, SPAM, and housing development subsectors.

k. Transportation Sector (Articles 446-451):

• Types of Violations: Violations of technical approvals (e.g., traffic impact analysis), PB, or PB UMKU.
• Sanctions: Warning (three times within 30 days), Suspension (30 days), fine, police coercive measures, revocation of certificates, and/or revocation of PB/PB UMKU.
• Mechanism: Sanctions may be applied non-sequentially (e.g., direct Suspension or revocation) if the violation poses an immediate threat to  transportation safety and security.

l. Health, Drugs, and Food Sector (Articles 452-463):

• Health: Sanctions include a warning (3x, 14 days), temporary suspension, fine, and/or revocation. If the violation endangers life, sanctions of suspension or revocation may be issued without warning.
• Drugs and Food: Sanctions for PB UMKU violations include a warning, suspension of the PB UMKU, a fine, police coercive measures (product recall, destruction, and blocking of electronic systems/online media), cancellation, and/or revocation of the PB UMKU.
• Fresh Food: Sanctions include warning (two warnings within 30 days), temporary suspension, a fine, police coercive measures, and/or revocation of the PB UMKU.

m. Education and Culture Sector (Articles 464-465):

• Education (Book Publishing): Sanctions include a written warning, product recall from circulation, Suspension of the PB, and/or revocation of the PB.
• Culture (Film): Sanctions include a written reprimand, fine, temporary closure, revocation of PB/PB UMKU, and/or police coercive measures (such as halting film production or distribution).

n. Tourism Sector (Articles 466-467):

Sanctions: 

1. Warning (up to three  times); 
2. Temporary suspension (if the third warning is ignored);
3. Administrative fine (if the temporary suspension is ignored); 
4. Revocation of PB (if the fine is not paid).

o. Religious Affairs Sector (Hajj and Umrah) (Articles 468-471):

• Types of Violations: Failure to depart pilgrims, failure to repatriate pilgrims, abandoning pilgrims, or lending PB legality (PPIU) to other travel bureaus.
• Sanctions: a Written reprimand, administrative fine, temporary suspension, government coercion (to force the organizer to depart or repatriate pilgrims), Suspension of the PB, and/or revocation of the PB. Sanctions are applied in tiers based on repeated violations.

p. Defense and Security Sector (Articles 511-515):

• Defense Industry: Sanctions in the form of a written warning (two times within three  months). If ignored, the sanction is revocation (of industry stipulation, feasibility certificate, or production license). Businesses can also be included on the Blacklist for two years.
• Security Services (e.g., Security Guards): (a) a Written warning (if the semi-annual report is not submitted); (b) Suspension of a PB (if the license is not renewed for three months); (c) Revocation of the PB (if the Suspension is ignored for three months).

q. Creative Economy Sector (Articles 516-517):

Sanctions: 

1. Warning (three times); 
2. Temporary suspension;
3. Fine; 
4. Revocation of PB.

r. Geospatial Information Sector (Articles 518-519):

Sanctions: Warning, temporary suspension, imposition of administrative fines, and/or revocation of PB.

s. Manpower Sector (Articles 520-523):

• Sanctions (for PB): Written warning, limitation of business activities, temporary suspension, revocation of PB, and/or fine.
• Sanctions (for PB UMKU): Written warning, temporary suspension, and/or revocation of the PB UMKU.

t. Cooperatives Sector (Articles 524-525):

• Types of Violations: Violation of the PB, particularly as it relates to savings and loan businesses.
• Sanctions: Warning, reduction in the cooperative's health assessment, temporary suspension (which may include a proposal to dismiss management or supervisors), fine, and/or revocation of PB.

u. Investment Sector (Articles 526-528):

Sanctions: Written warning, limitation of business activities, Suspension of business activities, fine, police coercive measures, and/or revocation of PB.

v. Environment Sector (Articles 541-543):

• Types of Violations: Violation of the PB in the environment sector (e.g., waste management or B3 waste).
• Sanctions: Written reprimand, government coercion, administrative fine, Suspension of the PB, and/or revocation of the PB.

12. Changes, Implications, and Regulatory Coherence between GR 5/2021 and GR 28/2025

GR 28/2025 implements Law 6/2023 to ensure legal certainty by refining business processes that rely on: 1) Time Certainty, which eliminates government stagnation through SLAs and constructive approval; and 2) Integration, which is achieved through full centralization into the OSS System.

 

13. Transitional Provisions

The Transitional Provisions of GR 28/2025 govern the licensing status of Businesses during the transition period from GR 5/2021 to the new regulation. Three main matters are regulated:

1. Legal Certainty of Already Issued Licenses

For Businesses who already possess existing licenses, GR 28/2025 affirms that all prerequisites, Business Licenses (PB), and/or PB UMKU that were issued, verified, and approved before the promulgation of GR 28/2025, are valid.

Therefore, Businesses who have complied with the provisions are not required to adjust their already valid licenses. However, an exception applies if the provisions in GR 28/2025 are more favorable to the Businesses.

2. Status of Applications in Process (Transition Process)

GR 28/2025 also regulates license applications that are still in process when this regulation takes effect, the following provisions apply:

• New Applications: Any application still in process, including those awaiting verification of a Standard Certificate for Medium-High Risk or fulfillment of License requirements for High Risk, will continue to be processed based on the provisions of GR 5/2021.
• Transition Time Limit: The process of completing applications based on GR 5/2021 applies until the OSS System that has been adjusted to GR 28/2025 is fully operational.

3. Administrative Obligations and System Adjustments

To support the transition period, GR 28/2025 establishes two main obligations:

• For Businesses: All Businesses who already had access rights before GR 28/2025 took effect must update their access rights data in the OSS System.
• For the Government: All implementing regulations (including Ministerial or Institutional Regulations) must be issued within a specified timeframe.
  Furthermore, the OSS System and the Indonesia National Single Window (INSW) System must be adjusted within the same timeframe to ensure the full implementation of all provisions of GR 28/2025.

 

References

1. Government Regulation of the Republic of Indonesia Number 28 of 2025 on the Implementation of Risk-Based Business Licensing
2. Government Regulation of the Republic of Indonesia Number 5 of 2021 on the Implementation of Risk-Based Business Licensing
3. Law of the Republic of Indonesia Number 6 of 2023 on the Enactment of Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation into Law