The Indonesian government has officially issued Government Regulation Number 28 of 2025 (PP 28 Tahun 2025) as a new milestone in the reform of risk based business licensing. This regulation fully replaces Government Regulation Number 5 of 2021 (PP 5 Tahun 2021), which previously served as the foundation of the Online Single Submission system (OSS).
Beyond administrative improvements, this new regulation introduces a fundamental shift in public service philosophy. Licensing processes that once relied heavily on manual bureaucracy have now transitioned to digital automation, supported by clear service timelines and an automatic approval mechanism known as positive fictitious approval (fiktif positif).
For both foreign and domestic investors, this reform sends a strong signal of the government’s commitment to creating a faster, more transparent, and more predictable investment climate.
Background of PP 28 of 2025
Since the implementation of the Job Creation Law (Undang-Undang Cipta Kerja), the government has gradually shifted the licensing framework toward a risk based approach. PP 5 of 2021 marked the first step of this transformation.
However, in practice, many challenges emerged. The OSS system often functioned merely as a document upload platform, while verification processes remained manual within technical ministries and regional governments. As a result, many licensing applications stalled without clear timelines, ultimately delaying investment realization.
Business actors consistently raised three major concerns that PP 28 of 2025 now aims to address:
- The absence of automatic mechanisms when service deadlines were exceeded
- The separation between business licensing and fiscal incentive processes
- Business classifications that no longer reflected the dynamics of the modern economy
Through this regulation, OSS is formally positioned as the administrative authority with full legal power to issue business licenses.
Positive Fictitious Approval as a Key Breakthrough in OSS
One of the most significant reforms introduced by PP 28 of 2025 is the systemic application of positive fictitious approval.
Under this mechanism, if the responsible authority fails to issue a decision within the defined Service Level Agreement (SLA) period, the OSS system will automatically deem the application approved and issue the license without manual intervention.
Technically, this process operates through several stages:
- Each type of license is assigned a fixed SLA within the system
- OSS sends tiered warning notifications to verification officers
- Once the deadline expires without action, the license is automatically issued
- All issued licenses are secured with official electronic signatures
This framework significantly reduces the long standing practice of “pending licenses” that has frustrated investors for years.
Acceleration of Core Licensing Requirements
PP 28 of 2025 also streamlines three core requirements that historically created the greatest investment bottlenecks.
Spatial Utilization Compliance (Kesesuaian Kegiatan Pemanfaatan Ruang or KKPR)
In regions with digital Detailed Spatial Plans (Rencana Detail Tata Ruang or RDTR), KKPR can now be issued automatically through OSS.
In areas without RDTR, if technical authorities fail to provide feedback within twenty working days, the system proceeds to issue Spatial Utilization Approval (Persetujuan Kesesuaian Kegiatan Pemanfaatan Ruang or PKKPR).
Environmental Approval (Persetujuan Lingkungan)
The integration between OSS and the Environmental Impact Assessment System (Amdalnet) ensures clear deadlines for Environmental Impact Analysis (Analisis Mengenai Dampak Lingkungan or AMDAL) and Environmental Management Efforts and Monitoring Efforts (Upaya Pengelolaan Lingkungan Hidup dan Upaya Pemantauan Lingkungan Hidup or UKL-UPL).
If no decision is issued within the set timeframe, environmental approval is automatically granted.
Building Approval (Persetujuan Bangunan Gedung or PBG)
Through the Building Management Information System (Sistem Informasi Manajemen Bangunan Gedung or SIMBG), PBG issuance is now more structured and can no longer be halted due to regional retribution issues.
OSS as an Integrated Digital Ecosystem
Under PP 28 of 2025, OSS evolves beyond a licensing portal into a fully integrated digital ecosystem consisting of six main subsystems:
- Investment information services
- Core business requirements
- Risk based business licensing
- Investment facilities
- Partnership between large enterprises and micro, small, and medium enterprises (UMKM)
- Supervision and sanctions
This structure is designed to eliminate data fragmentation across ministries while accelerating cross sector administrative processes.
Integration of Fiscal Incentives within OSS
Another crucial breakthrough is the unification of business licensing and fiscal incentive applications.
Through OSS, investors can now directly apply for facilities such as machinery import masterlists, tax holidays, and super tax deductions within a single system.
For businesses, this integration significantly reduces administrative duplication and improves operational efficiency.
KBLI 2025 Adjustment and Enhanced Risk Analysis
PP 28 of 2025 aligns with the implementation of the 2025 Indonesian Standard Business Classification (Klasifikasi Baku Lapangan Usaha Indonesia or KBLI 2025), which is more adaptive to the digital and green economy.
Sectors such as carbon trading, digital platforms, and factoryless goods producers now have specific classifications that directly influence risk levels and access to incentives.
To prevent misclassification, the OSS supervision system is equipped with artificial intelligence (AI) capable of detecting anomalies at an early stage.
Shift Toward Post Licensing Supervision
The new licensing approach under PP 28 of 2025 can be summarized simply: Faster licensing at the front end, stricter supervision after operations begin.
Oversight is conducted through risk based inspections and mandatory Investment Activity Reporting (Laporan Kegiatan Penanaman Modal or LKPM).
Failure to submit reports for two consecutive periods may trigger automatic suspension of the Business Identification Number (Nomor Induk Berusaha or NIB).
Key Preparations Investors Should Make Under PP 28 of 2025
While licensing processes are now faster, business readiness remains a critical success factor.
Investors should focus on:
- Ensuring accurate KBLI selection based on KBLI 2025 classifications
- Preparing location data and environmental documentation early in project planning
- Understanding SLA timelines to actively monitor OSS progress
- Developing fiscal incentive strategies from the outset
- Maintaining strict compliance with LKPM reporting obligations
With proper preparation, investors can fully leverage the accelerated licensing framework without facing administrative risks.
Strategic Impact of PP 28 of 2025 for Investors
This regulatory reform delivers several tangible benefits:
- Clearer licensing timelines
- Greater transparency and predictability
- Integrated fiscal incentive processing
- Reduced manual bureaucracy
At the same time, compliance responsibilities increase. All data submitted through OSS must be accurate, as post licensing supervision is now significantly stricter.
The Role of XPND in Supporting Businesses Under PP 28 of 2025
The transformation introduced by PP 28 of 2025 accelerates licensing processes while introducing new regulatory complexities. Automation within OSS, KBLI 2025 adjustments, core licensing requirements, and post licensing compliance demand comprehensive regulatory understanding.
For many companies, particularly foreign investors and large business groups, navigating this framework without professional support may lead to administrative risks.
XPND serves as a strategic partner assisting companies in navigating the full regulatory structure of PP 28 of 2025 in a structured and compliant manner. XPND supports risk based OSS licensing processes, ensures accurate KBLI classification, facilitates core requirements such as KKPR, environmental approvals, and PBG, and manages ongoing LKPM reporting obligations.
With deep expertise in digital licensing transformation and investment regulations, XPND enables companies to enter the Indonesian market more efficiently, securely, and in full compliance with the latest legal framework.
