What is PBBR?

Following the enactment of the Job Creation Law (Perppu Cipta Kerja), Risk-Based Business Licensing (“PBBR”) has now been established to improve the investment ecosystem and business activities. Further provisions regarding PBBR are regulated by a Government Regulation, namely GR 5 of 2021 on the Implementation of Risk-Based Business Licensing. *(Note: PP 28/2025 in the original text is likely a typo, as the context refers to GR 5/2021)*

According to Article 1 number 1 of GR 5/2021, PBBR is business licensing that uses a risk-based approach derived from the risk analysis results of each business activity. Risk is defined as the potential for injury or loss from a hazard or a combination of the likelihood and consequence of a hazard. Meanwhile, Business Licensing (“PB”) is the legality granted to business actors to start and run their business and/or activities.

Furthermore, Article 4 paragraph (1) of GR 5/2021 stipulates that PB is mandatory for business actors to conduct business activities. PB is implemented based on the determined risk level and business activity scale rating. Here are the details:

• Business Activities with Low Risk: The PB is a Business Identification Number (“NIB”), which serves as the business actor’s identity and the legality for conducting business activities.
• Business Activities with Low-Medium Risk: The PB is an NIB and a Standard Certificate.
• Business Activities with Medium-High Risk: The PB is an NIB and a Standard Certificate.
• Business Activities with High Risk: The PB is an NIB and a License.

Based on the explanation above, the NIB is used as the PB for all business activities across all risk levels. Therefore, it can be concluded that every business actor is required to have an NIB, and currently the SIUP (Business Trading License) has been replaced by the NIB. This is emphasized in Article 206 of GR 5/2021, which states that an NIB is mandatory for every business actor.

So, what is the NIB?

Definition of NIB

The NIB is proof of registration for business actors to conduct business activities and serves as an identity for business actors in carrying out their business activities.

For your information, the NIB as a PB is processed and issued through the Online Single Submission (OSS) system. According to Article 1 number 21 of GR 5/2021, the OSS system is an integrated electronic system managed and operated by the OSS Institution for administering PBBR.

On the other hand, Regulation of the Head of BKPM (Investment Coordinating Board) No. 4 of 2021 *(Note: adjusted to the latest regulation which generally refers to Perka BKPM 4/2021)* explains that business actors who possess licenses that were verified, approved, and are still valid prior to the implementation of the risk-based OSS system can still use them in accordance with statutory regulations. However, business actors must still register for PBBR through the OSS system, which will then verify the authenticity of their licensing documents within a certain period.

Furthermore, business actors who possess licenses (such as SIUP) issued before the implementation of the risk-based OSS system and which are no longer valid, are required to re-apply for PBBR (including the NIB) through the OSS system. If this obligation is not fulfilled, business actors may be subject to administrative sanctions, such as: Revocation of approval/registration.

Conclusion regarding SIUP:

Based on the explanation above, business actors are required to register for PBBR (the core of which is the NIB). In other words, companies are obligated to update their business legality with an NIB because the SIUP is no longer valid and has been replaced by the NIB. If this regulation is violated, business actors potentially face administrative sanctions.