In Indonesia’s increasingly dynamic regulatory environment, business compliance is no longer a mere administrative obligation; it is a strategic necessity. Companies must navigate a complex framework of licenses and reporting obligations to ensure their activities remain lawful and sustainable.
At the heart of this framework is the Online Single Submission (OSS) system, the government’s primary platform for business licensing and regulatory oversight.
The Role of OSS in Indonesia’s Licensing Framework
The OSS system was established to simplify and standardize business licensing across all ministries. Through this centralized platform, businesses can obtain essential permits, including:
NIB (Nomor Induk Berusaha): The fundamental Business Identification Number.
Operational Licenses: Permits required to commence commercial activities.
Commercial Approvals: Sector-specific certifications.
The system’s authority was further solidified by Government Regulation No. 28 of 2025 regarding Risk-Based Business Licensing (OSS-RBA). This regulation designates OSS as the sole national gateway, requiring all regional and central government agencies to process licenses exclusively through this integrated system.
Why Compliance is Critical for Your Business
Staying compliant is the only way to safeguard your company from regulatory, operational, and reputational risks. Under the integrated OSS-RBA regime, data inconsistencies are easily detected, which can lead to:
Administrative Sanctions: Warnings or temporary restrictions.
Operational Suspensions: Forced pauses in business activities.
License Revocation: Permanent loss of the right to operate.
Financial Penalties: Heavy fines for non-compliance.
The “Fictitious Positive” Principle. One major benefit of Regulation No. 28 of 2025 is the introduction of clearer Service Level Agreements (SLAs). If a competent authority fails to issue a decision within the prescribed timeline, the license may be “deemed approved,” provided the applicant has submitted all data accurately. This enhances legal certainty for proactive businesses.
4 Key Compliance Requirements Under OSS-RBA
To maintain a “Green” compliance status in Indonesia, businesses should focus on these four pillars:
1. Accurate KBLI Classification
Businesses must be registered under the correct Indonesian Standard Business Classification (KBLI). A misalignment between your actual field operations and your registered KBLI code can lead to licensing invalidation or audit findings.
2. Risk-Based Licensing Obligations
Requirements vary based on the assigned risk level: Low, Medium-Low, Medium-High, or High. Higher-risk activities require stricter technical standards, environmental verifications (AMDAL/UKL-UPL), and manual approvals beyond basic registration.
3. Fulfillment of Post-Licensing Commitments
Many licenses issued via OSS are “conditional.” They require the fulfillment of post-licensing commitments, such as building permits (PBG) or operational feasibility certificates (SLF). Failure to meet these milestones can trigger a license suspension.
4. Ongoing Data Updates and Reporting
Any change in company structure—such as shareholders, directors, business address, or investment value—must be promptly updated in the OSS system to remain valid.
Overcoming Common Compliance Challenges
Despite the streamlined nature of the system, many investors encounter hurdles:
Incorrect Data Input: Errors during the initial registration phase.
Misunderstanding Risk Levels: Failing to realize that a project requires a technical verification.
Delayed Reporting: Forgetting to file mandatory Investment Activity Reports (LKPM).
Conclusion
The enactment of Government Regulation No. 28 of 2025 confirms that OSS is the heart of Indonesia’s business ecosystem. Compliance is not a one-time event; it is an ongoing process of accuracy and proactive management.
By maintaining accurate data and staying informed of legal updates, businesses can minimize risk and achieve sustainable growth in the Indonesian market.