Indonesia Update W2 July 2025

Executive Brief: Indonesia’s New GR No. 28 of 2025 on Risk-Based Licensing – Strategic Takeaways for Business Leaders

Key Points at a Glance

Single-window digital licensing: The Online Single Submission (OSS) system now
centralizes all risk-based licensing electronically.
Firm deadlines, automated process flow: Service Level Agreements (SLAs) and the
fictitious-positive policy reduce uncertainty and enforce time frames.
Greater operational consistency: A unified framework aligns all regions and sectors,
with local decision-making potentially accelerating projects.
Integration for complex operations: Multi-unit or multi-sector businesses can
manage licensing more efficiently with consolidated documentation.
Continued transition and execution risks: Real-world timelines may vary due to
technical readiness and institutional coordination.

Strategic Context
Government Regulation (GR) No. 28/2025 reflects Indonesia’s commitment to simplifying
market entry and operational compliance, aligning with broader economic reforms under
the Omnibus Law on Job Creation.
This regulation is a continued step in enhancing Indonesia’s regional competitiveness. By
streamlining licensing processes and reducing bureaucratic hurdles, Indonesia aims to
position itself as a more attractive destination for foreign direct investment (FDI)
compared to regional peers like Vietnam, Thailand, and Malaysia.
For executives, this regulation signals a shift toward digitalization and efficiency. However,
the pace of change will depend on how quickly local institutions adapt and how
effectively businesses align with the new expectations.

What’s New –A Visual Overview

Business Strategy Implications
Opportunities

Faster Market Actions: Centralized, digital licensing and automated workflows
enable synchronized project timelines and reduced administrative bottlenecks.
Operational Clarity: Integrated requirements across sectors and regions enhance
visibility for legal, compliance, and project teams.
Cost Management: Reduced reliance on manual submissions and intermediaries
lowers compliance overhead.
Regional Competitiveness: By reducing red tape and improving efficiency,
Indonesia aims to gain more trust to be a preferred investment destination in
Southeast Asia.

Risks

Implementation Gaps: Regional and sectoral agencies may face delays in adapting
to OSS procedures, leading to inconsistencies.
Transition Costs: Teams may require training and new workflows to avoid missteps
during the early phases.
Data Quality: Incomplete or incorrect inputs can disrupt automated workflows, emphasizing the need for disciplined documentation.

Skylight’s Opinion: Looking Ahead
GR No. 28/2025 affects how business leaders approach regulatory strategy in Indonesia. By
streamlining licensing processes and aligning with global best practices, Indonesia is taking
significant steps to enhance its regional competitiveness.

Key Takeaways for Decision-Makers

A unified digital platform simplifies risk-based licensing.
Defined deadlines for approvals provide greater predictability.
The fictitious-positive policy ensures progress even if deadlines are missed.
Faster market entry and expansion are achievable with disciplined documentation and
monitoring.
Indonesia’s reforms position it as a stronger competitor in attracting FDI within
Southeast Asia.

As Indonesia’s licensing reforms transition from policy to practice, staying informed and
prepared will be critical for organizations aiming to navigate this new landscape effectively.
Proactive engagement and adaptability will be key to leveraging these changes for competitive
advantage.

Latest Update

Indonesian-European Union Comprehensive Economic Partnership (IEU-CEPA)
- After 19 rounds of negotiations since 2016, the IEU-CEPA process has finally
  been concluded, marked by the exchange of letters between Indonesia and
  the European Commission to accelerate its finalization.
- The official signing are expected in September 2025, paving the way for a
  major boost in trade. Indonesia–EU continues to show positive trend, where
  trade in 2024,reached $30 billion. This number is projected to double to $60
  billion the post-agreement.
- The agreement is also expected to open up new markets for Indonesia amid
  unstable geopolitics and global economy uncertainty, including wars in a
  number of countries and the US import tariffs.
- Indonesia’s key exports to the EU include palm oil and derivatives, copper
  ore, oleochemicals, footwear, coconut meal, steel, brown fat and copra, as
  well as rubber-based products and machinery.

Worldvuer iByond Limited Invests IDR 6 Trillion for Asia’s First Quantum AI Data Center
- Indonesia will host Asia’s first Quantum AI Data Center in Batam, with the
  initial phase involving $400 million (IDR 6 trillion) in investment, facilitated
  by the Ministry of Investment/BKPM.
- The investment plan was signed in a strategic partnership between Worldvuer iByond Limited, a Silicon Valley-based technology company, and Tunas Prima Industrial Estate, in Batam, a 100 Ha industrial park that implements renewable energy-based infrastructure such as solar panels and self-sufficient water treatment facilities. The park has also previously attracted investment from Apple factory for the air tag.
- Worldvuer iByond Limited is the developer of the Vovea iByond Operating System, a system that combines various types of advanced computing technologies, including quantum computing, artificial intelligence, and big data analytics, to deliver speeds and processing capacity far beyond conventional data centers.
- Indonesia will be their first base for this technology in Asia after previously being developed in Silicon Valley and the Middle East.

Danantara Partners With JBIC for Green Economy Project Financing
- Danantara Indonesia has signed MoU with the Japan Bank for International Cooperation (JBIC) to accelerate Indonesia’s transition to a green and digitally connected economy.
- Under the agreement, Danantara Indonesia and JBIC will jointly identify and co-develop priority initiatives focused on decarbonization and circular economy sectors.These include renewable energy, power transmission, water and wastewater management, sustainable digital infrastructure such as green data centers, and healthcare, with a broad range of financing instruments, including debt, equity, guarantees and other customized solutions aimed at supporting large-scale strategic projects across Indonesia.
- However, specific financial commitments or project timelines were not disclosed.

KCC Glass In KITB Expressed Disappointment Towards the Government
- PT KCC Glass Indonesia, a South Korean glass manufacturer operating in the state-owned industrial park, Batang Integrated Industrial Estate (KITB), has raised concerns over unmet government The company cited high gas prices, poor infrastructure access, and unexpected additional costs as key challenges.
- KCC Glass reported financial losses due to having to fund part of the supporting infrastructure themselves. These challenges were compounded by bureaucratic delays and poor inter-agency coordination, which have disrupted their operations.
- When invited to invest in KITB in 2020, KCC Glass was promised a Special Gas Pricing (HGBT) of $6.00/MMBTU. However, the company instead received a rate of $9.50/MMBTU. While KCC Glass eventually secured the HGBT rate for five years, this was only after a lengthy process involving the Ministry of Investment, Industry, and Energy and Mineral Resources.
- The delayed completion of Batang Port, originally promised by December 2023, has further disrupted KCC Glass’s operations. The company is currently forced to import raw materials via Tanjung Mas Port in Semarang, which is 70 km away, instead of the intended 2 km distance from Batang Port.
- During a high-level meeting with President Prabowo Subianto and the Federation of Korean Industries in April 2025, KCC Glass appealed for special natural gas pricing and policy support to address these challenges. The company also expressed plans for expansion, emphasizing the need for smoother operations and better infrastructure to support their

PGN 10 Year Expansion Plan
- State-owned gas company, PT Perusahaan Gas Negara (PGN) plans to expand its LNG infrastructure to meet Indonesia’s rising gas By 2034, PGN will build five land-based LNG terminals and one floating LNG terminal, adding 1,000 BBTUD of LNG to the domestic market. Key locations include Java, Teluk Lamong, Arun LNG Hub, Bontang LNG Bunkering, and western Papua.
- PGN will also extend its gas pipeline network by 1,292 kilometers, complementing its 33,859-kilometer In 2024, PGN distributed 858 BBTUD, commanding 91% of the domestic gas market. With declining pipe gas supply, PGN has initiated LNG regasification at the Arun LNG Hub, FSRU Lampung, and FSRU Jawa Barat.
- PGN urged the government to formalize PGN’s role as the national gas aggregator, ensuring reliable supply and uniform pricing across

Indonesia Seals a $27 Billion Deal with Saudi Arabia
- Indonesia and Saudi Arabia have agreed for a $27 billion (approximately IDR 437 trillion) investment partnership across various strategic sectors on July 2,
- Key strategic sector covers:
  1. Clean energy
  2. Petrochemical industry
  3. Aviation fuel services
  4. Healthcare
  5. Digital economy and technology
  6. Defense and security
  7. Industry and mining
  8. Agriculture, fisheries and food security
  9. Tourism, culture, youth and sport
  10. Education and scientific research

Danantara, ACWA Power and Pertamina USD 10 Billion Collaboration
- Indonesian sovereign wealth fund Danantara Indonesia has signed an MoU with Saudi Arabia’s ACWA Power and PT Pertamina to develop renewable energy and desalination projects in Indonesia, with a total investment of USD 10 billion.
- The first MoU between Danantara and ACWA Power focuses on renewable energy, combined-cycle gas turbines, green hydrogen, and water The second agreement with Pertamina includes 500 MW renewable energy and gas-to-power projects, green hydrogen initiatives, and operations and maintenance business lines.
- Danantara CEO, Rosan Perkasa Roeslani, highlighted the partnership as pivotal for Indonesia’s global energy transition leadership, aiming to meet renewable energy targets of 34% by 2034 and 87% by ACWA Power Vice Chairman, Raad Al-Saady, reaffirmed the company’s commitment to Indonesia’s energy and water security, while Pertamina President Director, Simon Aloysius Mantiri, emphasized the collaboration’s role in advancing a low-carbon economy and ensuring energy security.

Krakatau Steel Targets Global Expansion Through BRICS Collaboration
- State-controlled PT Krakatau Steel signed an MoU with Chinese state-owned enterprise Xiamen ITG Group , Ltd and PT Dexin Steel Indonesia during the BRICS Innovation Base Industry Project Matchmaking Meeting, covering cooperation in steel products such as slabs, hot rolled coils, and other potential areas.
- The event featured 12 projects valued at over $4.18 billion, with Krakatau Steel among the Indonesian companies The projects reflect large-scale investments, diverse sectors, and a high degree of international cooperation.
- Facing this opportunity, Krakatau Steel is requesting full support from its parent company, Danantara, to advance its business plans—ranging from ongoing restructuring to operational efficiency.
- The company also plans to expand its subsidiaries through the revitalization of port and industrial water facilities, development of the Cilegon Industrial Park, and its other downstream steel product program to accommodate their expansion plan.

Potential New Industrial Parks in Kendal
- Amid concerns over Indonesia’s unemployment rate—particularly in Kendal Regency, where unemployment stands at 01% or approximately 32,194 people (according to the Central Statistics Agency)—the Governor of Kendal has pledged to boost job creation through industrial park development.
- Several industrial development updates were highlighted:

- - Kendal Industrial Park is planning a 1,000 Ha
  - An industrial park named Seafer Industrial Park is being established in Patebon, covering 1,000 Ha.
  - An additional industrial park is being developed in Sidomuncul, Sumberejo, Kaliwungu, spanning 300–400 Ha.

▪ Neutra DC Nxera & Medco Power to Launch Green Data Center

- PT Telkom Indonesia, through its data center subsidiary NeutraDC Nxera Batam, has partnered with PT Medco Power Indonesia to integrate renewable energy into its hyperscale data center operations. The collaboration was formalized with a MoU signed on July 7, 2025, during the SIJORI WEEK: Batam Interconnect World Forum.
- The partnership focuses on utilizing renewable energy, particularly solar power, to meet the high energy demands of AI-enabled data centers while addressing environmental concerns. Medco Power plans to develop solar power plants near the Kabil Integrated Industrial Estate in Batam to support this initiative.
- NeutraDC Nxera Batam’s hyperscale facility, with over 60MW of IT load capacity, is designed with decarbonization principles, aligning with Telkom Group’s broader renewable energy and Net Zero Emissions goals. This facility strengthens Batam’s position as a key data center hub in Indonesia, supporting AI infrastructure and digital transformation. NeutraDC also operates a renewable-powered data center in Cikarang, further advancing sustainable digital infrastructure in the

Indonesia’s Purchasing Manager’s Index
- Indonesia’s manufacturing sector continued to weaken in June 2025. According to S&P Global, the Purchasing Managers’ Index (PMI) dropped to 9, down from 47.4 in May—its lowest level in recent months. A reading below 50 indicates a contraction in manufacturing activity.
- The lowering PMI indicates uncertainty in the industrial sector, with manufacturers delaying production amid expectations for more pro-business policy Weakening demand in both export and domestic markets, along with declining household purchasing power, also weighed on the output.
- However, while while the manufacturing sector struggles, agriculture is showing resilience and could offer new economic opportunities if leveraged strategically, giving an opportunity for Indonesia for job creation in the agribusiness and agro-based

Latest Update – Japanese Companies Movements in Indonesia

INPEX Establishes Indonesia Subsidiary to Strengthen Geothermal Business
- INPEX Corp. announced that it has established a subsidiary, PT INPEX Renewable Energy Indonesia (IRE), in Jakarta, Indonesia, with the aim of managing its renewable energy business and promoting the development of new projects in the country
- Through the establishment of IREI, INPEX will take a more active role in its existing geothermal power generation projects in Indonesia, including the Sarulla Geothermal IPP Project, in which it participates through INPEX Geothermal Sarulla Ltd., as well as the Muara Laboh, Rantau Dedap, and Rajabasa geothermal power projects, in which it participates through INPEX Geothermal Ltd.

Nihon M&A Center Holdings Inc. has established a local subsidiary in Indonesia
- Nihon M&A Center Holdings announced a local subsidiary in Indonesia under the name PT Nihon Mergers and Acquisitions Center Indonesia.
- Nihon M&A Center Holdings Inc. established the Overseas Support Office within Nihon M&A Center in April 2013 to address the growing number of cross-border M&A deals arising from the overseas expansion of Japanese companies and the divestiture of their foreign In Indonesia, the company opened a representative office in October 2019 as its second base in the ASEAN region, focusing on collecting information related to cross- border M&A.
- With the recent establishment of its local subsidiary, the company has begun conducting business development activities and sell-side opportunities, aims to increase both the volume of information and cross-border M&A transactions between Japan, Indonesia, and the broader ASEAN
- Nihon M&A Center operates investment funds such as “A to G Capital,” which target small and medium-sized enterprises (SMEs) in the ASEAN region— companies that are often difficult for Japanese firms to acquire

Daikin Attains Leading Position in Global Residential Air Conditioner Production
- Daikin Industries plans to produce 64 million residential air conditioners globally in fiscal year 2025, an 11% increase from FY 2024, marking a record- high production volume.
- On May 14, 2025, Daikin’s local subsidiary, PT Daikin Industries Indonesia, began mass production at its new factory in the GIIC industrial
- The factory represents a IDR 3 trillion investment, creating 2,500 jobs and enabling significant technology transfer to local workers. With an annual production capacity of 1.5 million units, the plant will also serve as a key export hub for Southeast Asia.
- On June 30, 2025, Daikin launched its first Indonesia-made air conditioner series, Nusantara Prestige, featuring 40% locally sourced components in line with government policies promoting domestic
- The series caters to Indonesia’s market demand for compact, high energy- efficiency inverter-type air conditioners, tailored to local electricity supply and housing designs.

Autobacs Strengthens Automotive Mechanic Training With Indonesia
- Autobacs Seven Co., Ltd., a leading Japanese retailer specializing in automotive parts and services, is enhancing its training framework for automotive mechanics by leveraging the Specified Skilled Worker (SSW)
- Partnership with Indonesia’s Ministry of Manpower: Autobacs has launched a training initiative to help Indonesian candidates acquire official automotive mechanic

Training Structure:

- Phase 1 (Indonesia): Participants undergo basic technical instruction and Japanese language training.
- Phase 2 (Japan): Participants receive hands-on training at Autobacs Seven service facilities, with the goal of obtaining a nationally accredited automotive mechanic license in

- Program Benefits:
  - Skill Development: Combines technical expertise with Japanese language proficiency to make participants job-ready.
  - Global Certification: Supports participants in earning a national license in Japan, recognized globally.
  - Future Opportunities: Equips participants to apply their skills in Indonesia upon returning, fostering long-term career
- This initiative aligns with a broader trend of Japanese automakers investing in vocational training across Asia, recognizing the importance of developing skilled local talent to support the automotive industry.

Lotte Completes New Production Building at Indonesian Factory
- Lotte Corporation has constructed a new production facility for Choco Pie at the Bekasi plant of its group company, PT Lotte Indonesia, located within the MM2100 Industrial Town in West A completion ceremony was held on July 8, 2025, and production is scheduled to commence in August 2025.
- PT Lotte Indonesia has been manufacturing and distributing Choco Pie since In response to anticipated growth in demand, the company has doubled its production capacity by building a new facility within the premises of the existing factory.
- A rooftop solar power generation system with a capacity of 726 kW has been installed at the new The electricity generated by this system will be used on-site, contributing to an estimated annual reduction of approximately 580 tons of CO₂ emissions, as part of its decarbonization goals.

Stem Cell Institute Joint Venture with Sinar Mas Group on Cord Blood Storage
- Stem Cell Institute has entered into a joint venture agreement with Big Rainbow Investment Ltd., the family office of the Sinar Mas Group. The partnership aims to develop and expand cell banking operations across the Southeast Asia region.
- A framework was established to allow early-stage expansion into neighboring countries, including Stem Cell Institute, a leading Japanese biobank, has been providing cell storage services derived from perinatal tissues for 26 years since its establishment in 1999, and currently holds approximately 99% of the domestic market share.
- Fiscal year 2025 will be positioned as an investment phase focused on infrastructure development and organizational setup, with a plan to gradually expand service offerings.

-end-

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