RISK BASED APPROACH: NEW REGIME FOR BUSINESS LICENSING IN INDONESIA

Introduction
In furtherance to the Law No. 11 of 2020 on Job Creation (“Omnibus Law”), the government introduced a new licensing system for companies in Indonesia, known as risk-based licensing through the Government Regulation No. 5 of 2021 on the Implementation of Risk-Based Licensing Service (“GR 5/2021”). Although this regulation has come into force on 2 February 2021, GR 5/2021 explicitly stipulates that the implementation of this new system will be effective on 2 June 2021. During the period between 2 February 2021 and 2 June 2021, the BKPM and other government institutions would actively communicate with businesses, both domestic and foreign investment companies.

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