Minimum Paid-Up Capital Reduced to IDR 2.5 Billion for Foreign Investments

In June 2025, the Indonesian government enacted the Government Regulation No. 28 of 2025 on the Implementation of Risk-Based Licensing (“GR 28/2025”), revoking the previous Government Regulation No. 5 of 2021 (“GR 5/2021”). This new regulation introduced adjustments to Indonesia’s business licensing framework and requires the issuance of updated sectoral implementing regulations.

Under its transitional provisions, GR 28/2025 provided a four-month period for the Government to issue these implementing regulations, which concluded in October 2025. With this, several key sectoral regulations have now been released to align with the new framework.

One notable development is the issuance of the Minister of Investment and Downstream Industry/Head of the Indonesia Investment Coordinating Board (“BKPM”) Regulation No. 5 of 2025 concerning the Guidelines and Procedures for the Implementation of Risk-Based Business Licensing and Investment Facilities through the Online Single Submission (“OSS”) System (“BKPM Regulation 5/2025”), promulgated on 2 October 2025. It introduces a significant change by reinstating the minimum paid-up and issued capital requirement for foreign investment companies (“PT PMA”) to IDR2.5 billion, thereby reverting to the investment regime prior to 2021.

Following this, the Government also issued new implementing regulations for the industry and trade sectors to further operationalize the risk-based licensing framework.

New Implementing Regulations

The following key regulations have been issued under GR 28/2025:

• Minister of Industry Regulation No. 37 of 2025 on Standards for Business Activities and/or Products/Services in the Industrial Sector (“MoI Regulation 37/2025”); and
• Minister of Trade Regulation No. 33 of 2025 on Business Activity and Product/Service Standards in the Trade and Legal Metrology Sectors (“MoT Regulation 33/2025”).

These regulations shall serve as the primary references for risk-based business licensing in their respective sectors, outlining specific standards and compliance requirements for business operators.

Industry Sector

The Ministry of Industry (“MoI”) issued the MoI Regulation 37/2025, effective as of 5 October and formally revoked MoI Regulation No. 9 of 2021 concerning Standards for Business Activities and/or Products in the Implementation of Risk-Based Business Licensing in the Industry Sector (“MoI Regulation 9/2021”). MoI Regulation 37/2025 now serves as the primary implementing regulation for risk-based licensing in the industry sector.

Substantively, the standard requirements for business licensing remain unchanged from those under MoI Regulation 9/2021. However, the new MoI Regulation 37/2025 primarily streamlines and reclassifies business licensing requirements, making it easier for businesses to understand and comply.

Rather than specifying requirements for each Indonesian Standard Industrial Classification (Klasifikasi Baku Lapangan Usaha Indonesia or “KBLI”) individually, the new regulation classifies businesses based on the type of license required, as outlined in Appendix I. It sets general requirements for each license and identifies which KBLI under the industrial sector must obtain them. Key licenses under this framework include:

1. Indonesian National Standard Certificate (Sertifikat Standar Nasional Indonesia)/ Technical Specification (Spesifikasi Teknis)/ Guidelines (Pedoman Tata Cara), under Section A of the Appendix I;

2. Certificate of Validity for Documents on the Prevention and Management of Chemical Emergency Situations in Chemical Industry Activities (Sertifikat Tanda Sah Dokumen Pencegahan dan Penanggulangan Keadaan Darurat Bahan Kimia Dalam Kegiatan Usaha Industri Kimia). Under Section B of the Appendix I;

3. Industrial Area Accreditation Certificate (Sertifikat Akreditasi Kawasan Industri), under Section C of the Appendix I; and

4. Green Industry Standard Certificate (Sertifikat Standar Industri Hijau), under Section D of the Appendix I).

Based on the above, we note that Appendix I of the new MoI Regulation 37/2025 classifies terms such as the Indonesian National Standard (“SNI”) certificate, technical specifications, and procedural guidelines applicable to all KBLIs in the industrial sector that require SNI compliance as required licensing items. These aspects were not specifically addressed as a licensing item in the appendix of MoI Regulation 9/2021.

As another example, the requirement for companies to have a written policy on green industry principles, which was previously part of the business management system under the KBLI framework, is now a licensing requirement for obtaining a Green Industry Standard Certificate. From this, it can be concluded that the substantive requirements remain the same, however, Appendix I of MoI Regulation 37/2025 provides greater clarity by itemizing the relevant licensing obligations.

In essence, the new MoI Regulation 37/2025 adopts a more concise and structured approach, with clearly itemized licensing requirements that facilitate compliance while maintaining the substantive provisions of the previous regulation.

Trade Industry

The Ministry of Trade (“MoT”) has issued MoT Regulation 33/2025. This new regulation amends and partially revokes MoT Regulation No. 21 of 2023, which previously amended MoT Regulation No. 26 of 2021 on the Determination of Business Activity and Product Standards in the Implementation of Risk-Based Business Licensing in the Trade Sector.

Under the previous regulation, the appendix(es) primarily categorized standards based on types of goods or specific activities (e.g., international trade fairs, standardized goods, or goods requiring SNI certification). The structure was relatively straightforward but fragmented, focusing mainly on physical goods and traditional trade sectors.

In contrast, the new MoT Regulation 33/2025 introduces a three-tiered attachment structure, which separates and organizes standards more clearly:

1. Appendix I – Business Activity Standards: KBLI-based activities subject to specific licensing standards;

2. Appendix II – Product/Service Standards: product or service specific licensing obligations; and

3. Appendix III – Goods Subject to Standards: items that must comply with applicable standards.

This structural update aligns the MoT framework with the broader risk-based, OSS-integrated licensing system, offering clearer categorization and easier reference for businesses.

Several key additions in the new regulation reflect the government’s response to evolving business models and trade practices:

• Digital Economy Coverage – New inclusion of Portal Web and/or Digital Platforms for Commercial Purposes (KBLI 63122) highlights recognition of e-commerce and online platforms as trade-sector activities.
• Expanded Trade Activities – Now explicitly lists non-store retail trade (KBLI 47999) and hazardous materials trading (KBLI 46653) as business activities subject to standardization.
• Service-Based and Technical Activities – Includes technical inspection and laboratory testing services (KBLI 71202, 71203, 71204), which were previously outside the trade sector scope.
• Real Estate – Broader recognition of business service sectors such as real estate management (KBLI 68200, 68111).

These inclusions indicate a wider and more contemporary interpretation of what constitutes a trade-related activity, extending beyond traditional wholesale and retail trade.

OSS System Update

It is also important to note that, along with the regulatory update, the OSS system has been undergoing a system update since the beginning of the month. The updated OSS introduces several changes to both the user interface and the available menus. During this transitional period, users continues to experience intermittent technical issues as the system is not fully stabilized.

In addition to the changes in the menus and interface, the new OSS also introduces mechanism for obtaining environmental licenses (persetujuan lingkungan), particularly for business with low risk that requires only Statement of Commitment for Environmental Management and Monitoring (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup or “SPPL”). Previously, the OSS system would automatically issue a SPPL for low-risk business. However, following the update, the issuance of all environmental licenses (i.e., SPPL, UKL-UPL and AMDAL) are now carried out through a screening (Penampisan) in AMDALNet platform.

This new process applies not only to new business applications but also to business activity expansion (i.e., adding new KBLI codes), both of which require new verification of both of spatial utilization conformity and environmental permit.

Conclusions

The issuance of MoI Regulation 37/2025 and MoT Regulation 33/2025 marks a key step in operationalizing the new risk-based licensing framework under GR 28/2025. Both regulations maintain the substance of previous rules but introduce more structured, transparent, and KBLI-aligned standards, facilitating compliance and consistency across sectors. Businesses operating in the industry and trade sectors are advised to review the new appendices to confirm whether their activities or products fall within the updated scope and to ensure timely adjustment to the new regulatory framework.

At this stage, there has not yet been any formal or comprehensive socialization by Ministry of Investment/BKPM regarding the updated OSS system. As a result, any questions concerning the updated system such as new menus, workflows, and environmental permit screening features, must still be addressed through direct inquiries to BKPM for consultation. BKPM has also confirmed that system errors are common during the transitional period. Users are suggested to attempt the process multiple times if an error occurs, and if the issue persists, to contact OSS for assistance. We expect that comprehensive guidance or socialization will be available soon to provide clear and proper instructions for using the new OSS system.