“An NIB is an identity. In many sectors, however, identity alone is insufficient: you also need a permit from the authority supervising that sector before you can actually operate.”
Sectoral approval is a mandatory licensing layer for companies in certain business sectors, in addition to the NIB issued by OSS. Many business operators, particularly foreign investors newly entering Indonesia, are unaware of this layer until they have obtained an NIB and are ready to operate. Only then do they discover that one or more additional permits from sectoral ministries or agencies must first be obtained.
This situation does not arise because Indonesia’s licensing system is unclear. It arises because sectoral permits occupy a different layer from OSS, and information about them is not all available in one easily accessible place.
Why Are Sectoral Permits Required Beyond the NIB?
The OSS RBA (Risk-Based Online Single Submission) system is designed as a single entry point for most business licensing in Indonesia. However, certain business sectors have such significant operational impacts on society, ranging from public health and financial stability to consumer safety or national security, that the state cannot rely on OSS risk classification as its sole supervisory mechanism.
For these sectors, the competent sectoral authorities, such as OJK for finance or BPOM for food and pharmaceuticals, are mandated to set standards and issue separate permits that apply in addition to or alongside OSS permits. These sectoral permits do not duplicate the NIB. The two serve different functions and are issued by different authorities.
JHY Legal routinely helps clients identify sectoral permits applicable to their business from the planning stage, well before the OSS process begins, because this information directly affects the operational timeline.
The Financial and Banking Sector
This is one of Indonesia’s sectors with the strictest sectoral licensing layers. All financial services operators, such as banks, insurers, securities companies, investment managers, fintech companies managing customer funds, and other non-bank financial institutions, must obtain a permit from the Financial Services Authority (OJK) before conducting business.
The OJK licensing process differs significantly from OSS. It involves specific minimum capital requirements, competency requirements for management, fit and proper tests for directors and commissioners, and submission of a business plan for substantive evaluation. Processing also takes considerably longer than NIB issuance: several months to more than a year, depending on the licence requested.
The Healthcare Sector
Healthcare Facilities
Clinics, hospitals, medical laboratories, and other healthcare facilities require permits from the Ministry of Health and operational permits from local government. Requirements cover physical facility standards, availability of healthcare professionals holding practice permits, and operating procedures that meet Ministry of Health standards.
Foreign investors wishing to enter this sector face an additional layer of DPI (Positive Investment List) verification to confirm whether foreign ownership is permitted and in what proportion.
Healthcare Products and Medical Devices
Companies manufacturing or importing healthcare products and medical devices require marketing authorization from BPOM (the Food and Drug Supervisory Agency). This process is entirely separate from OSS and requires product testing and complete technical documentation. (Source: pom.go.id)
“In healthcare, sectoral licensing is more than an additional formality. It is a public protection mechanism ensuring that patient safety standards are met before a facility is allowed to operate.”
The Food Sector
Companies manufacturing, importing, or distributing processed food products in Indonesia must obtain marketing authorization from BPOM. This applies to products intended for commercial distribution rather than personal consumption.
The process includes product testing, verification of production facilities, and checks on label completeness. Imported products must undergo registration before they can enter the Indonesian market.
In addition to BPOM authorization, some food businesses also require halal certification from BPJPH (the Halal Product Assurance Organizing Agency) for particular products where regulations make it mandatory.
The Telecommunications and Information Technology Sector
Companies providing telecommunications services, operating network infrastructure, or using radio frequency spectrum require permits from the Ministry of Communication and Informatics (Kominfo). The permit type varies with the service provided:
- Telecommunications network operators require a Network Operation Licence.
- Telecommunications service operators require a Service Operation Licence.
- Use of radio frequency spectrum requires a Radio Station Licence (ISR) or Radio Frequency Band Licence (IPFR).
- Certain digital platforms may be required to register as Electronic System Operators (PSE) with Kominfo.
Foreign investors in this sector should also check applicable foreign ownership limits. Telecommunications has DPI provisions requiring careful attention.
The Mining and Energy Sector
Business activities involving mineral and coal mining, oil and gas, and renewable energy require permits from the Ministry of Energy and Mineral Resources (ESDM). The principal permit types include:
- IUP (Mining Business Licence) for mineral and coal exploration and production.
- A Cooperation Contract or Special Mining Business Licence for certain areas.
- An Electricity Supply Business Licence (IUPTL) for power generation.
- Related business licences for electricity distribution, transmission, and sale.
The licensing process in this sector depends heavily on the planned location and scale of operations and often requires coordination with local government as well as the Ministry of Energy and Mineral Resources.
The Construction and Property Sector
Construction services companies in Indonesia must hold a Construction Services Business Entity Certificate (SBUJK) issued by the Construction Services Development Board (LPJK). This certificate is separate from the NIB and is required to participate in government project tenders or undertake private projects of a certain scale.
Property developers must obtain location permits, building permits (IMB, now known as PBG or Building Approval), and permits related to spatial planning from local government before projects can begin.
Initial Checklist: Questions to Answer Before Starting
Before beginning your business licensing process, several basic questions need to be answered to determine whether sectoral permits apply:
- Is your business in a sector supervised by a dedicated sectoral authority, such as finance, healthcare, food, telecommunications, mining, or construction?
- Are the products or services you plan to offer directly related to consumer safety, health, or finances?
- Does your business sector require the use of natural resources or infrastructure regulated by the state?
- For foreign investors: does the DPI impose foreign ownership limits in your intended sector?
If the answer to any of these questions is yes, there is a strong likelihood that sectoral permits must be arranged beyond the OSS process.
JHY Legal’s Experience Navigating Sectoral Permits
JHY Legal is a legal advisory firm focused on immigration, corporate actions, and regulatory licensing in Indonesia. For sectoral permits, we help clients identify all permits required for their business sector and planned operational scale, including permits not immediately apparent in the OSS interface. We coordinate sectoral permit applications with OSS processing so they run in parallel and neither becomes a bottleneck. For PT PMA companies, we integrate DPI checks into this licensing map to avoid discovering foreign ownership obstacles too late.
Plan Sectoral Permits Before Setting Your Operational Schedule
Obtaining sectoral permits often takes considerably longer than obtaining an NIB: weeks to months, depending on the permit type and competent authority. This means the company’s operational start date should depend on when sectoral permits are completed rather than when the NIB is issued.
The most practical step you can take now is to identify the main KBLI code for your business, then check whether a sectoral authority is responsible for supervising that business sector. From there, you can begin to assess whether your planned operational timeline is realistic or needs adjustment.
For more comprehensive mapping, particularly if your business spans several sectors or involves foreign ownership requiring DPI verification, JHY Legal is ready to help develop a complete and accurate licensing picture from the initial planning stage.