Policy Pulse: Investment Law Reforms 2024 – 2025
An executive summary of the amendments to Indonesia’s Omnibus Law and what they mean for foreign capital entering priority sectors.
Indonesia’s investment framework has continued to evolve since the introduction of the Omnibus Law, with 2024 and 2025 bringing further legal and administrative developments affecting how businesses establish, license, and operate in the country.
For foreign investors, the direction is broadly clear: Indonesia continues to pursue a more integrated, risk-based, and digitally administered investment regime while maintaining strategic control over sectors considered important to national interests.
The practical implication is significant.
The question for investors is no longer simply:
“Is foreign investment allowed?”
It is:
“Under what structure, with what licensing requirements, in which sectors, and through which institutional pathway?”
The Omnibus Law: A Continuing Reform Platform
Indonesia’s Job Creation Law (Omnibus Law) was designed to simplify a fragmented regulatory environment and improve the ease of doing business.
Law No. 6 of 2023 confirmed the establishment of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation as law, providing the statutory foundation for the continuing reform framework.
The reform agenda has affected multiple areas relevant to investors, including:
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business licensing;
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investment;
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employment;
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land and spatial planning;
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environmental approvals;
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taxation;
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infrastructure; and
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sector-specific regulation.
The significance of the Omnibus Law therefore extends beyond a single piece of legislation.
It represents a broader attempt to make Indonesia’s regulatory architecture more integrated and investment-oriented.
2024–2025: The Next Phase of Implementation
The most important development for investors during this period has been the continued implementation and refinement of the risk-based licensing system.
In June 2025, the government issued Government Regulation No. 28 of 2025 on Risk-Based Business Licensing.
The regulation replaced Government Regulation No. 5 of 2021 and became the new framework for the administration of risk-based business licensing.
The significance of PP 28/2025 is practical.
It restructures the licensing process around clearer stages and introduces greater emphasis on processing timelines, transparency, and administrative certainty.
The government has described the framework as intended to make licensing more certain, simple, and efficient, including through defined Service Level Agreements (SLAs).
For investors, this means that understanding the licensing architecture is becoming as important as understanding the substantive sector regulation.
From Licensing Complexity to Risk-Based Regulation
One of the core principles of Indonesia’s current investment framework is risk-based business licensing.
Rather than applying identical licensing requirements to every business activity, requirements are differentiated according to the level and nature of business risk.
This creates a more structured pathway for investors.
At the same time, the approach means that investors must correctly identify the nature and classification of their proposed activities.
A seemingly straightforward investment can involve multiple business classifications, supporting licenses, basic requirements, or sector-specific approvals.
The quality of the initial regulatory assessment therefore matters.
OSS Becomes the Critical Gateway
Indonesia’s Online Single Submission (OSS) system remains at the center of the investment licensing architecture.
PP 28/2025 further strengthened the role of OSS as the national platform for business licensing.
The government has subsequently adjusted the OSS system to align with the new regulation, emphasizing legal certainty and ease of doing business. As of February 2026, approximately 15.4 million Business Identification Numbers (NIBs) had been issued through OSS.
For foreign investors, OSS should not be viewed merely as an online registration portal.
It is increasingly the operational interface between businesses and the Indonesian licensing system.
This makes the accuracy of corporate structure, KBLI classification, risk categorization, and supporting documentation increasingly important.
A New Element: Positive Legal Presumption
One of the more notable administrative reforms is the formalization of the Fiktif Positif mechanism.
Under this mechanism, where a complete licensing application has been submitted correctly but is not processed within the applicable timeframe, the application may be legally deemed approved through the OSS system, subject to the applicable requirements and subsequent verification.
The mechanism is intended to strengthen legal certainty and reduce uncertainty caused by administrative delays.
However, it should not be interpreted as removing regulatory oversight.
The government makes clear that relevant ministries, agencies, and regional authorities retain verification and evaluation responsibilities. Licenses may still be evaluated or revoked where inconsistencies are identified.
For investors, the message is therefore twofold:
Administrative certainty is increasing.
But:
Regulatory compliance remains essential.
What Has Changed for Foreign Investors?
The reforms do not mean that Indonesia has adopted a completely open investment regime.
Indonesia continues to maintain restrictions and conditions for certain activities.
The investment framework generally operates on the principle that commercial business activities are open to investment unless specifically closed or subject to particular conditions. This framework was established through the investment business-field regulations following the Omnibus Law reforms.
For foreign investors, the analysis therefore needs to go beyond the broad question of whether a sector is “open.”
Investors should assess:
- Ownership
Is foreign ownership permitted at the proposed level?
- Business Classification
Which KBLI classification applies to the actual activity?
- Licensing
What risk-based business licensing and supporting approvals are required?
- Sectoral Regulation
Are there additional requirements administered by the relevant ministry or regulator?
- Investment Structure
Does the proposed corporate or partnership structure comply with applicable Indonesian requirements?
- Location
Are there spatial, industrial-estate, regional, or special-zone requirements?
These questions should be addressed before capital is committed.
Priority Sectors: Opportunity Meets Policy
Indonesia’s investment strategy increasingly emphasizes sectors that support national economic priorities.
These include areas such as:
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downstream processing and industrial development;
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infrastructure;
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energy and renewable energy;
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digital economy and technology;
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electric vehicles and battery ecosystems;
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healthcare;
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manufacturing;
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food security;
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tourism and the creative economy; and
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other strategic industries.
For foreign capital, these sectors can offer substantial opportunities.
But they also tend to involve more complex institutional environments.
A project may require engagement not only with the investment authorities, but also with sectoral ministries, regulators, local governments, and other public institutions.
This is where regulatory navigation becomes a strategic issue rather than a compliance exercise.
The Importance of KBLI
One of the most practical issues for foreign investors is often overlooked at the beginning of an investment process:
What exactly is the business activity?
Indonesia’s KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) classification determines how a business activity is categorized within the licensing system.
The classification can influence:
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licensing requirements;
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risk level;
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foreign ownership conditions;
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supporting approvals;
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sectoral obligations; and
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eligibility for particular facilities or incentives.
The government is also moving toward implementation of KBLI 2025, with a 2026 joint circular establishing the framework for its implementation within risk-based business licensing.
For investors entering Indonesia, this reinforces an important principle:
Regulatory strategy should begin with accurate business classification.
Incentives and Investment Facilities
Indonesia’s investment framework also provides mechanisms for investment facilities and incentives.
These can vary depending on the sector, investment characteristics, location, and strategic relevance of a project.
The implementation framework for investment facilities was further updated through Minister of Investment and Downstreaming/Head of BKPM Regulation No. 5 of 2025, which provides guidelines for risk-based business licensing and investment facilities through OSS. The regulation replaced several earlier 2021 ministerial regulations.
This matters for investors because incentives should not be considered as an afterthought.
The investment structure, project location, business classification, and project design can all influence the availability and suitability of investment facilities.
What Foreign Investors Should Do Differently
The regulatory reforms point toward a more structured approach to entering Indonesia.
- 01 — Start With Regulatory Mapping
Before establishing a company or committing capital, map the applicable business activities, KBLI classifications, ownership rules, licensing requirements, and sectoral regulations.
- 02 — Understand the Institutional Landscape
Identify which ministries, regulators, and regional authorities have a role in the project.
A project may involve more institutions than initially expected.
- 03 — Design the Investment Structure Around the Regulation
Corporate structure should not be treated separately from regulatory strategy.
Ownership, activities, licensing, location, and investment facilities need to be considered together.
- 04 — Treat OSS as a Strategic System
OSS is not simply a filing mechanism.
The quality of the information submitted into the system can influence the licensing pathway and subsequent regulatory obligations.
- 05 — Monitor Policy Direction
Indonesia’s investment environment continues to evolve.
Investors should monitor not only regulations already in force, but also how government priorities are developing in their specific sector.
The Bigger Picture
The 2024–2025 period should not be interpreted simply as another round of regulatory amendments.
It represents the continued transition of Indonesia’s investment regime toward a more risk-based, digitally administered, and institutionally integrated framework.
For foreign investors, this can create greater predictability.
But greater predictability does not mean less complexity.
In fact, as Indonesia’s licensing system becomes more structured, the importance of getting the fundamentals right increases.
The wrong KBLI classification.
The wrong ownership assumption.
The wrong licensing pathway.
The wrong institutional engagement.
Any of these can create delays or affect the economics of a project.
AMANTRA Perspective
At AMANTRA, we view investment regulation as part of a broader strategic environment.
Entering Indonesia successfully requires more than understanding the text of a regulation.
It requires understanding how regulation operates in practice, which institutions shape its implementation, and how policy direction may affect an investment over time.
Our approach combines strategic advisory, regulatory advisory, government engagement, investment facilitation, and institutional knowledge to help international organizations navigate Indonesia with greater clarity.
The central lesson from Indonesia’s recent investment reforms is simple:
The regulatory environment is becoming more structured—but successful investors still need to understand the system behind the system.
For foreign capital entering Indonesia’s priority sectors, the opportunity remains significant.
The competitive advantage will increasingly belong to organizations that can combine capital with regulatory intelligence, local understanding, and trusted institutional relationships.
