To improve the ease of doing business and attract more investment, Indonesia introduced a Risk-Based Business Licensing system through OSS (Online Single Submission) as part of the implementation of the Job Creation Law (Omnibus Law). This new approach, officially regulated under Government Regulation No. 5 of 2021, marks a major shift in how business licenses are granted in the country.
What is Risk-Based Licensing?
Risk-Based Licensing (RBL) is a system that classifies business activities based on their level of risk—Low, Medium-Low, Medium-High, or High. The higher the risk, the more detailed the licensing requirements. This classification allows the government to focus regulatory efforts on high-risk activities, while streamlining the process for low-risk businesses.
This system is fully integrated with the OSS RBA platform (OSS Risk-Based Approach), which automatically determines your business risk level based on the activities you input during registration.
Risk Levels and Their Licensing Requirements
- Low-Risk Businesses
Only require a Business Identification Number (NIB) to operate. No additional licenses are needed. - Medium-Low Risk Businesses
Require NIB + Standard Certificate, which can be self-declared through OSS. - Medium-High Risk Businesses
Require NIB + Verified Standard Certificate, which must be validated by the relevant authority before operations begin. - High-Risk Businesses
Require NIB + Specific Licenses and Permits issued after full evaluation, often involving technical, environmental, or safety considerations.
Benefits for Investors
- Faster and more efficient process
OSS RBA eliminates unnecessary steps for low-risk businesses, helping them go to market faster. - Clarity and certainty
Investors can now clearly understand which licenses are needed based on their risk profile, reducing regulatory confusion. - Digital and transparent system
All steps are conducted online via oss.go.id, with real-time tracking of license status.
A foreign investor planning to open a consulting firm in Indonesia would likely fall into the Low to Medium-Low risk category. This means they may only need a NIB and a self-declared standard certificate to start operations—drastically reducing the time and cost involved compared to the old system.
Indonesia’s move toward a risk-based approach under OSS is a significant reform that benefits both local and foreign entrepreneurs. By aligning licensing requirements with business risk, the system offers greater flexibility, efficiency, and regulatory focus where it’s most needed.
For investors looking to expand into Indonesia, understanding the OSS RBA process is essential. Partnering with a local expert can help ensure compliance while maximizing the benefits of this streamlined framework.