| Full title | Peraturan Pemerintah Nomor 5 Tahun 2021 tentang Penyelenggaraan Perizinan Berusaha Berbasis Risiko |
|---|---|
| Citation | PP 5/2021 |
| Jurisdiction | Indonesia |
| Enacted by | President of Indonesia |
| Signed | 2 February 2021 |
| Promulgated | 2 February 2021 |
| Effective | 2 February 2021 |
| Implements | Pasal 12 of UU 11/2020 on Job Creation |
| Replaces | PP 24/2018 |
| Replaced by | PP 28/2025 |
Peraturan Pemerintah 5/2021 (Peraturan Pemerintah Nomor 5 Tahun 2021 tentang Penyelenggaraan Perizinan Berusaha Berbasis Risiko) was an Indonesian government regulation that introduced risk-based business licensing, under which the type of licence a business needs depends on the level of risk assigned to its activity. It was signed by President Joko Widodo and promulgated on 2 February 2021, as Lembaran Negara 2021 No. 15, and was issued to implement Pasal 12 of UU 11/2020 on Job Creation.[1][2] It belongs to the body of rules described at public administration in Indonesia.
The regulation classified business activities as low, medium-low, medium-high or high risk, and matched each level to a form of licence: a business identification number (Nomor Induk Berusaha, NIB) alone, an NIB with a standard certificate, or an NIB with a permit. It set norms, standards, procedures and criteria for sixteen sectors, required licences to be issued through the electronic Online Single Submission (OSS) system, and set rules on supervision, policy reform, funding, the resolution of problems and sanctions.[3][4][5][6]
It revoked PP 24/2018 on electronically integrated business licensing services, and was itself revoked on 5 June 2025 by PP 28/2025, which continued the risk-based approach.[7][8]
Pasal 2 lists the eight subjects of the regulation: the arrangement of risk-based licensing, its norms, standards, procedures and criteria (norma, standar, prosedur, dan kriteria, NSPK), licensing through the OSS system, supervision, evaluation and policy reform, funding, the resolution of problems and obstacles, and sanctions. Its stated purpose was to improve the investment ecosystem through more effective and simpler licensing and transparent, structured and accountable supervision.[3:1]
To start and run a business, a business actor had to meet the basic requirements of licensing and/or obtain a risk-based licence. The basic requirements were conformity of space use with the spatial plan, the environmental approval described at environmental approval in Indonesia, the building approval, and the certificate of fitness for use, each governed by its own legislation.[9] Pasal 6 applied risk-based licensing to sixteen sectors, from marine affairs and fisheries, agriculture, environment and forestry, and energy and mineral resources to health, education, tourism, telecommunications, defence and manpower, and barred ministries, regions, special economic zone administrators and free trade zone authorities from issuing business licences other than those it provided for.[4:1] The business classifications, risk levels, licences and their periods of validity were set out for each sector in Lampiran I, and the requirements and obligations in Lampiran II.[4:2]
The level of risk was set by the central government through an analysis that identified the activity, assessed the degree of hazard to health, safety, the environment and the use of resources, assessed the likelihood of the hazard occurring, and determined the risk level and scale of business; ministers of manpower, health and environment, sectoral ministries, businesses and the public took part.[10][11] Activities were classified as low, medium or high risk, and medium risk was divided into medium-low and medium-high.[5:1]
A low-risk activity needed only an NIB, which for micro and small enterprises also served as a national standard (SNI) declaration and a halal assurance statement. A medium-low activity needed an NIB and a standard certificate issued through the OSS system on the business's own statement that it met the standard. A medium-high activity needed an NIB and a standard certificate verified by the central or regional government; until verification, an unverified certificate allowed only preparations. A high-risk activity needed an NIB and a permit (izin), the approval of the central or regional government that had to be obtained before operation.[5:2] Where a high-risk activity required an environmental impact assessment, construction of buildings could begin only after the environmental approval had been issued.[12]
Under Pasal 21 and 22, the central government set the NSPK for each sector as the single reference for licensing by central and regional governments, and licences were issued by the OSS institution, by provincial and district one-stop service offices on behalf of governors and regents or mayors, and by the administrators of special economic zones and free trade zones; licences for foreign investment were issued by the investment coordinating agency.[13] Chapter III then set out the sector-by-sector rules.[13:1]
Licensing was carried out electronically through the OSS system, which comprised an information subsystem, a licensing subsystem and a supervision subsystem and had to be used by ministries, regional governments, zone authorities and businesses. The information subsystem, open to the public without an account, published the classifications by risk, spatial plans, investment requirements, licensing requirements, incentives and complaint channels.[14]
Supervision was carried out by the central government, regional governments and zone authorities within their powers, taking account of the business's compliance record, and covered spatial and building standards, health, safety and environmental standards, business standards, sectoral requirements and reporting obligations. It had to follow a supervision plan and was coordinated by the investment agency and the one-stop service offices.[15] Supervision was routine, based on risk level and compliance, through business reports and field inspections, or incidental. Businesses reported their investment and employment every three months during construction and commercial operation, and their production, social and environmental responsibility, partnerships and training once a year.[16]
Ministries were to reform licensing policy continuously under the coordination of the coordinating ministry for economic affairs, which set a risk-based licensing action plan. The OSS system was funded from the state budget, and licensing by ministries and regions from their budgets and other lawful sources.[17] Ministers, governors and regents or mayors had to resolve obstacles in their fields, and could make decisions consistent with the general principles of good governance where the law was silent; public complaints of abuse of authority were to be handled first through administrative processes.[18]
Officials who did not provide licensing through the OSS system were subject to administrative sanctions, and after two written warnings their licensing powers could be taken over by the OSS institution, the sectoral minister or the governor. Sanctions for business actors were set out sector by sector in the rest of Chapter IX.[19]
Licences approved and effective before the regulation took effect were exempted from its new rules unless these were more favourable to the business, while licences not yet effective were processed under it.[20] Pasal 565 revoked PP 24/2018 and kept other licensing provisions in force so far as they did not conflict with the regulation, and Pasal 566 required implementing regulations within two months and brought risk-based licensing through the OSS system into effect four months after promulgation.[7:1][21]
Pasal 550 of PP 28/2025 revoked PP 5/2021 when the later regulation took effect.[8:1] CRPG's regulatory tracker published an analysis of PP 5/2021 on 26 November 2025.[22]
K183 · Work URI /akn/id/act/pp/2021/5 · RegVault PP_5_2021[P] PP 5/2021, preamble, Menimbang (implementing Pasal 12 of Undang-Undang Nomor 11 Tahun 2020 tentang Cipta Kerja) and Mengingat angka 1 and 2; Lembaran Negara 2021 No. 15, Tambahan Lembaran Negara No. 6617. regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 567 and closing formula (Ditetapkan di Jakarta pada tanggal 2 Februari 2021; Diundangkan di Jakarta pada tanggal 2 Februari 2021). regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 2 and 3. regulation_id PP_5_2021. ↩︎ ↩︎
[P] PP 5/2021, Pasal 6 ayat (1) to (12). regulation_id PP_5_2021. ↩︎ ↩︎ ↩︎
[P] PP 5/2021, Pasal 10 and Pasal 12 to 15. regulation_id PP_5_2021. ↩︎ ↩︎ ↩︎
[P] PP 5/2021, Pasal 167 ayat (1). regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 565 huruf a and b, revoking Peraturan Pemerintah Nomor 24 Tahun 2018 tentang Pelayanan Perizinan Berusaha Terintegrasi Secara Elektronik (Lembaran Negara 2018 No. 90). regulation_id PP_5_2021. ↩︎ ↩︎
[P] Peraturan Pemerintah Nomor 28 Tahun 2025 tentang Penyelenggaraan Perizinan Berusaha Berbasis Risiko, Pasal 550 huruf b. regulation_id PP_28_2025. https://peraturan.bpk.go.id/Details/319773/pp-no-28-tahun-2025 ↩︎ ↩︎
[P] PP 5/2021, Pasal 4 and Pasal 5 ayat (1) and (2). regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 7 to 9. regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 19 ayat (1). regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 17 ayat (3). regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 21 and 22 and the heading of Bab III. regulation_id PP_5_2021. ↩︎ ↩︎
[P] PP 5/2021, Pasal 167 to 169. regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 213 to 217. regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 218 to 221. regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 310 to 312. regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 313 and 314. regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 315 to 317. regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 562. regulation_id PP_5_2021. ↩︎
[P] PP 5/2021, Pasal 566. regulation_id PP_5_2021. ↩︎
[E] "What Risk-Based Licensing Framework Applies Under PP 5/2021?", CRPG regulatory tracker, crpg.id, 26 November 2025. https://crpg.id/what-risk-based-licensing-framework-applies-under-pp-5-2021/ (free sign-in required on crpg.id) The post carries a notice that it is AI-generated; it is cited for the record of the development, not for its legal content. ↩︎