Indonesia’s licensing framework has undergone major reform following the enactment of the Job Creation Law (Law No. 6 of 2023), which amended the earlier Omnibus Law.
Under this new regime, business licensing for Foreign Investment Companies (PMA Companies) follows a risk-based approach, replacing the previous permit-heavy structure with a streamlined, transparent, and integrated process.
Licenses are now issued through the Online Single Submission (OSS) system operated by the Investment Coordinating Board (BKPM), with requirements determined by the risk level of a company’s business activity.
Risk Classification Under the OSS System
Each business activity in Indonesia is categorized by its KBLI code and assigned one of four risk levels:
Low Risk
Medium-Low Risk
Medium-High Risk
High Risk
This classification determines what licenses or certifications a PMA company needs before it can legally operate.
- Business Identification Number (NIB)
The NIB (Nomor Induk Berusaha) is the foundational license issued through OSS and functions as the company’s official identity.
For low-risk businesses, the NIB alone is sufficient to start operating.
The NIB also automatically serves as:
Company Registration Certificate
Import Identification Number (API), if applicable
Registration for BPJS Ketenagakerjaan and BPJS Kesehatan
Because of its multiple functions, the NIB is the most essential license for every PMA company.
- Standard Certification
Companies in medium-low and medium-high risk categories must obtain Standard Certification (Sertifikat Standar).
This certification demonstrates that the company meets industry-specific feasibility standards, including:
Technical requirements
Health and safety standards
Environmental compliance
Two types of Standard Certification apply:
Self-Declaration (Medium-Low Risk)
The company declares compliance with the required standards through OSS.
Government Verification (Medium-High Risk)
Authorities review and verify compliance before the certification becomes effective.
- Business License (Perizinan Berusaha) for High-Risk Sectors
Companies categorized as high-risk must obtain a specific Business License before commencing operations.
These licenses typically require comprehensive assessments or technical approvals, which may include:
Environmental Impact Assessment (AMDAL)
Sector-specific operating permits (e.g., mining, oil and gas, financial services, heavy manufacturing)
Technical recommendations from ministries or local authorities
High-risk sectors may also need to submit periodic reports or undergo audits to maintain compliance.
Additional Basic Licensing Requirements
Regardless of risk level, every PMA company must also fulfill several foundational obligations, such as:
Registered business address and location permits
Zoning compliance under regional regulations
Employment registration with the Ministry of Manpower
Environmental approvals where required
These elements must all be processed through the OSS platform to ensure proper integration into Indonesia’s investment administration system.
The Role of OSS and BKPM
The OSS system, supervised by BKPM, is the central gateway for all business licensing activities. Through OSS, PMA companies can:
Apply for and obtain an NIB
Submit Standard Certification and Business License applications
Track licensing status
Update business information and fulfill reporting obligations
This digital approach significantly improves the ease of doing business and supports Indonesia’s efforts to attract foreign investment.
Conclusion
A PMA company in Indonesia must secure the appropriate business license based on its risk classification:
Low Risk → NIB
Medium-Low / Medium-High Risk → NIB + Standard Certification
High Risk → NIB + Business License + sectoral approvals
All licensing requirements are integrated through the OSS system under BKPM supervision, promoting transparency and regulatory consistency.
Understanding these licensing obligations allows foreign investors to operate efficiently, avoid compliance issues, and fully integrate into Indonesia’s regulatory environment.