The Ministry of Investment/BKPM has issued Regulation No. 5 of 2025 on the Administration of Risk-Based Business Licensing and Investment Facilities through the OSS System (“MoI BKPM 5/2025”). This new regulation revokes and consolidates three earlier regulations; Perka BKPM No. 3, 4, and 5 of 2021—into a single unified framework. By merging these previously fragmented rules, MoI BKPM 5/2025 introduces a more accessible system for business licensing and investment management, serving as the implementing regulation for Government Regulation No. 28 of 2025 on Risk-Based Business Licensing Administration (“GR 28/2025”).
One of the most consequential reforms introduced by MoI BKPM 5/2025 concerns capital and investment requirements for Foreign Investment Limited Liability Companies (“PT PMA”) in Article 26 of MoI BKPM 5/2025. The regulation reduces the minimum paid-up capital for foreign-owned companies from IDR 10 billion under Perka 4/2021 to IDR 2.5 billion, significantly lowering the entry threshold for foreign investors. However, the minimum investment value threshold remains above IDR 10 billion under this MoI BKPM 5/2025.
MoI BKPM 5/2025 also introduces a mandatory capital lock-up mechanism in Article 27 that the paid-up capital must be placed in the company’s bank account and frozen for a minimum of 12 (twelve) months, unless it is used for legitimate business activities. Nevertheless, the detailed implementation of this capital lock up mechanism, including enforcement measures has not been comprehensively regulated. Accordingly, the application of Article 27 remains subject to further clarification through implementing guidelines, practice, or subsequent regulatory instruments, and should therefore be closely monitored going forward.
The investment value and capital requirements of foreign investment under Article 26 of MoI BKPM 5/2025 also introduces sector-specific minimum investment requirements, including thresholds for Electric Vehicle Charging Infrastructure (SPKLU) and investment activities within Special Economic Zones (KEK), both of which were absent from the previous regulations. By establishing these investment minimums, the regulation provides greater clarity for investors in high-priority sectors and aligns capital requirements with national development objectives.
Further, a compliance shift under Article 35 of MoI BKPM 5/2025 concerns the treatment of supporting business activities (KBLI pendukung). Under the previous regime of Perka BKPM No. 4 of 2021 regarding Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities (“Perka BKPM 4/2021”), supporting KBLIs were not required to be reflected in a company’s Articles of Association (“AoA”). MoI BKPM 5/2025 now mandates that any supporting KBLI intended to generate revenue must be expressly stated in the AoA and meet the minimum investment and capital requirements under MoI BKPM 5/2025. Please also note that the KBLI supporting business activity may not be the same as the KBLI main business activity.
In addition, MoI BKPM 5/2025 enhances procedural certainty by introducing the fiktif positif (positive fictitious decision) mechanism for several permits within the OSS system. Under this mechanism, a business licensing application that has been submitted in full and in compliance with applicable requirements is deemed legally approved if the competent authority fails to issue a decision within the prescribed service level agreement (SLA). In such cases, approval may be automatically recognized through OSS by operation of law. Notwithstanding such deemed approval, licenses issued through fiktif positif remain subject to post-approval verification and evaluation by the relevant authorities. Any inconsistency or non-compliance may result in administrative measures, including correction or revocation, in accordance with applicable laws.
Accordingly, the issuance of MoI BKPM 5/2025 introduces important changes to Indonesia’s risk-based business licensing and investment framework. While the regulation simplifies entry for foreign investors and improves licensing efficiency, it also brings new compliance requirements that companies shall carefully observe. Particularly for PT PMA, it is advisable to review the capital structure, licensing data, and corporate documents to ensure continued compliance under the new MoI BKPM 5/2025.
Should you require further explanation or clarification in relation to the investment matters outlined above, please do reach out to us. We look forward to assisting you as you pursue your business objectives and strategic initiatives in Indonesia.
