{"id":15938,"date":"2025-08-14T10:05:58","date_gmt":"2025-08-14T03:05:58","guid":{"rendered":"https:\/\/investinasia.id\/blog\/?p=15938"},"modified":"2025-10-20T13:36:52","modified_gmt":"2025-10-20T06:36:52","slug":"why-indonesias-oss-system-still-confuses-foreign-investors","status":"publish","type":"post","link":"https:\/\/investinasia.id\/blog\/why-indonesias-oss-system-still-confuses-foreign-investors\/","title":{"rendered":"Why Indonesia\u2019s OSS System Still Confuses Foreign Investors"},"content":{"rendered":"

Indonesia\u2019s Online Single Submission (OSS) system was meant to simplify business licensing and boost investment. In 2025, however, many foreign investors still find it complex, inconsistent, and risky. Despite reforms like Government Regulation No. 28\/2025, implementation gaps, regional resistance, and legal ambiguities persist.<\/p>\n

Also read: OSS in Indonesia: A Guide for Foreign Companies<\/a><\/strong><\/p>\n

The Promise vs. the Reality<\/h2>\n
\"Challenges
Challenges in Completing OSS for Foreign Investors (pexels.com)<\/figcaption><\/figure>\n

The OSS was designed to centralize licensing under the Ministry of Investment and BKPM, replacing fragmented regional systems. In theory, a single platform should reduce bureaucracy. In practice, uneven regional capacity and poor coordination between government levels mean that investors still face local variations in procedures.<\/p>\n

Regional Gaps and Resistance<\/h2>\n

A key bottleneck is the lack of digitized RDTR (Detailed Spatial Plans). Only about 10% of Indonesia\u2019s 514 regencies and municipalities have integrated these into the OSS. Without them, location approvals stall, forcing manual processes that the system was supposed to replace.<\/p>\n

Some regional governments openly resist the OSS, citing fears over losing control of licensing decisions and revenue. This creates a patchwork of compliance standards, where the same investment might be approved quickly in one province but delayed for months in another.<\/p>\n

Also read:<\/strong> How to Apply for Indonesia Investment Incentives via OSS<\/a><\/strong><\/p>\n

The \u201cFictitious Positive\u201d Paradox<\/h2>\n

GR 28\/2025 introduced the \u201cfictitious positive\u201d rule: if authorities don\u2019t respond within a set timeframe, licenses are automatically approved. While meant to create certainty, it often causes more confusion. Ministries and regions interpret it differently, and many lack the capacity to meet deadlines\u2014leading to delays or conflicting outcomes.<\/p>\n

Sectoral Restrictions Still Complicate Matters<\/h2>\n

Indonesia\u2019s Positive Investment List replaced the Negative Investment List, but restrictions remain. Some sectors are fully closed to foreign ownership, others partially open with conditions. The OSS often fails to clearly communicate these nuances, leading to rejected applications or regulatory breaches that can trigger sanctions.<\/p>\n

Also read: The Complete Checklist Before You Open a Business in Indonesia (Local and Foreign)<\/a><\/strong><\/p>\n

Post-Licensing Risks and Enforcement<\/h2>\n

The risk-based OSS allows businesses to start operations before fulfilling all requirements, but post-licensing audits create uncertainty. Operation Wira Waspada in 2025 saw 267 foreign-owned companies lose licenses, with some facing visa cancellations. For investors, this undermines confidence in long-term stability.<\/p>\n

Also read: Risk-Based Business Licensing and OSS System in Indonesia<\/a><\/strong><\/p>\n

Technical and User Experience Issues<\/h2>\n
\"Challenges
Challenges in Completing OSS for Foreign Investors (pexels.com)<\/figcaption><\/figure>\n

From system crashes to unclear error messages, the OSS platform still struggles with usability. Local officials often lack technical skills to guide investors, forcing many back into manual processes. For foreign investors without Bahasa Indonesia fluency, language barriers add another layer of difficulty.<\/p>\n

Corruption Risks in a Digital Age<\/h2>\n

While OSS aims to reduce rent-seeking, discretionary powers and procedural opacity at the local level still open doors to informal payments. Complex rules and unclear guidance can push investors toward unofficial \u201cfacilitators\u201d who promise faster results.<\/p>\n

How to Navigate OSS Challenges Successfully<\/h2>\n

For foreign investors, the key is strategic preparation:<\/p>\n