On 2 February 2021, the government issued new Regulations to streamline business licencing in 16 sectors including trade, industry and tourism based on the risk those businesses represent (the Regulations).* These Regulations were introduced in accordance with the requirements of the Omnibus Law.**

The Regulations set out the following four different risk categories: low; medium-low; medium-high; and high. Each business sector has been categorised in the Regulations as primary and supporting in accordance with Indonesia’s 2020 Standard Industrial Classification system. The Regulations refer to each classification and assign a risk level.

The Regulations state that businesses classified as low risk do not need a business licence – only a business identification number. While businesses classified in the medium risk categories need a business identification number and standard certification (which includes statements and/or evidence of compliance with standards for the conduct of business activities). Finally, businesses classified as high risk, need a business identification number and a sector specific licence.

Businesses that are already licenced do not need to comply with the Regulations, unless it is advantageous for them to do so. The Regulations apply not only to new applicants but also to those who have already been issued a licence, which is not yet effective.

The risk-based licencing will be administered through Indonesia’s online single submission (OSS) system and takes effect on 2 June 2021. The Regulations revoke the previous regulations on the subject.***

*Government Regulation Number 5 of 2021 concerning The Implementation of Risk-Based Business Licensing.

**Law Number 11 of 2020 concerning Job Creation.

***Government Regulation Number 24 of 2018 concerning Electronically Integrated Business Licensing Service.