Automatic KBLI conversion preserves continuity, but it does not confirm that a company’s activities, documents and licenses remain aligned.

Following the implementation of KBLI 2025, Indonesia’s Online Single Submission system (OSS) has begun converting existing business classification codes to the new standard.

For many companies, the visible result appears reassuring: the Business Identification Number (NIB) remains valid, and existing business licenses have not been marked as expired.

The practical conclusion, however, is more nuanced.

OSS converts the KBLI code. It does not determine whether the company is fully compliant.

The system cannot assess whether the converted code accurately reflects the company’s current products, services, contracts and revenue streams. Nor can it confirm that the company’s Articles of Association, NIB, OSS records and operating licenses remain consistent.

For foreign-owned companies planning an expansion, license application, corporate restructuring, financing, acquisition or initial public offering, an unresolved KBLI inconsistency may become a transaction or regulatory obstacle.

What is the key issue for foreign investors?

The key issue is alignment—not whether the OSS system has technically completed the conversion.

A company should review whether the following elements remain consistent:

• The KBLI codes displayed in OSS;
• The company’s actual business activities;
• The purposes and business activities stated in its Articles of Association;
• Its NIB and other OSS records;
• Its existing business and sector-specific licenses; and
• Any foreign investment or sector-specific requirements applicable to its activities.

A mismatch does not automatically mean that the company is operating unlawfully. It does, however, require assessment to determine whether corrective action is necessary.

Practical guidance: Treat the OSS conversion as a trigger for review, not as confirmation of compliance.

What is KBLI 2025?

KBLI, or Klasifikasi Baku Lapangan Usaha Indonesia, is Indonesia’s official classification system for economic and business activities.

A company’s registered KBLI codes may affect:

• Its permitted scope of business;
• Foreign investment eligibility;
• Its OSS risk classification;
• The licenses and approvals it must obtain;
• Its NIB and OSS records;
• The business activities stated in its Articles of Association;
• Applicable investment and capital requirements; and
• Its ability to expand, restructure or complete a transaction.

KBLI 2025 was introduced under Statistics Indonesia Regulation No. 7 of 2025. Statistics Indonesia, the Ministry of Investment and Downstream Industry/BKPM and the Ministry of Law subsequently issued Joint Circular Letter No. 4.S/Tahun 2026, No. M.HH-1.HH.04.02/Tahun 2026, and No. 1/Tahun 2026 concerning the transition to and implementation of the new classification.

KBLI is therefore more than a statistical label. It connects a company’s stated activities with Indonesia’s foreign investment, corporate registration and risk-based licensing systems.

Practical guidance: Review KBLI in the context of the company’s business model and regulatory position, rather than as an isolated administrative code.

Do existing NIBs and business licenses remain valid?

In principle, existing licenses do not become invalid solely because the KBLI classification has changed.

An NIB, Business License (Perizinan Berusaha), PB UMKU (Perizinan Berusaha untuk Menunjang Kegiatan Usaha) or other relevant license obtained before the implementation of KBLI 2025 should generally continue to be valid. Most companies are not required to reapply for all existing licenses merely because the system has converted their KBLI codes.

However, two separate questions must be distinguished:

• Does the existing license remain valid?
• Does the license still cover the company’s actual activities under the new classification?

The answer to the first question may be yes while the second still requires review.

Continued validity does not necessarily mean that the converted KBLI is accurate. It also does not confirm that the Articles of Association, NIB, OSS records and business licenses have automatically become consistent with one another.

Practical guidance: Do not reapply for licenses unnecessarily, but confirm that existing licenses still correspond to the converted KBLI and the company’s actual operations.

Why does automatic OSS conversion not guarantee compliance?

OSS performs a technical mapping between the previous and new KBLI classifications. It does not conduct a legal or operational review of the company.

Where one previous KBLI corresponds directly to one new code, the conversion may be relatively straightforward. More complex issues arise where the classification has been divided, consolidated or redefined.

A company may encounter situations in which:

• One previous KBLI corresponds to several new codes;
• Several previous codes are consolidated into one new KBLI;
• An existing activity is divided into more specific categories;
• A new category of business activity has been introduced;
• The company’s operations have expanded beyond its original registration; or
• The converted code does not fully reflect its current commercial model.

For example, if one previous KBLI is divided into three new codes, OSS cannot determine which of those codes applies to the company, whether more than one should be registered, or whether the new classification creates additional licensing implications.

This is the central limitation of automated conversion: the system can map a code, but it cannot interpret a business model.

The correct classification must ultimately be assessed against the company’s products, services, contracts, operational processes and revenue sources.

Practical guidance: Companies affected by one-to-many, many-to-one, split, merged or redefined classifications should conduct a substantive review rather than rely solely on the code displayed in OSS.

Which companies should prioritise a KBLI review?

Four categories of companies should consider an immediate review.

1. Companies adding products, services or business activities

A company entering a new sector, launching a product line, providing additional services or expanding its operations should first identify the correct KBLI for the proposed activity.

For a foreign investment company, or PMA company, this analysis should also consider:

• Whether the activity is open to foreign investment;
• Whether any investment conditions apply;
• The relevant OSS risk classification;
• Whether sector-specific approval is required; and
• Whether the proposed activity is covered by the existing corporate documents and licenses.

Selecting a code because it appears similar to the proposed activity may create problems when the company later applies for a license or undergoes regulatory review.

Practical guidance: Define the commercial model first, then select the KBLI. The legal classification should follow the business activity—not the other way around.

2. Companies applying for or modifying licenses

KBLI is a key component of Indonesia’s risk-based licensing framework.

If the classification is inaccurate, a company may:

• Apply for a license that does not correspond to its activities;
• Be unable to proceed with a sector-specific application;
• Be required to amend or supplement its corporate documents;
• Encounter inconsistencies between OSS, the NIB and the Articles of Association; or
• Conduct an activity without the appropriate licensing basis.

These issues can affect both the timing and certainty of a licensing process.

Practical guidance: Before submitting a new license application or modifying an existing license, confirm that the KBLI, Articles of Association, NIB and OSS records are aligned.

3. Companies making corporate changes

Changes to shareholders, directors, commissioners, registered addresses or capital often require updates to both the AHU and OSS systems.

During this process, historical inconsistencies may become visible. Common examples include:

• The Articles of Association still using an outdated description of the company’s activities;
• Different information appearing in AHU and OSS;
• The NIB containing a KBLI that does not reflect current operations;
• New activities never having been added to the Articles of Association; or
• Previous corporate changes not having been reflected in OSS.

A corporate change can therefore provide an efficient opportunity to review and, where necessary, align the company’s documents and licensing records.

Practical guidance: Coordinate the KBLI review with planned corporate amendments to reduce duplication and avoid repeated filings.

4. Companies preparing for financing, M&A, restructuring or an IPO

KBLI inconsistencies may remain unnoticed during ordinary operations but become visible during legal due diligence.

Investors, lenders and their advisers will typically compare:

• The company’s actual operations;
• Its Articles of Association;
• AHU registration records;
• The NIB and OSS information;
• Business and sector-specific licenses;
• Material commercial contracts; and
• Principal sources of revenue.

From a transaction perspective, a material inconsistency may need to be disclosed, corrected before closing or addressed through conditions precedent, representations, warranties and indemnities.

The consequences depend on the nature of the issue, the importance of the affected activity and whether it can be remedied within the transaction timetable. An unresolved issue may affect deal certainty, financing approval, risk allocation or closing.

Practical guidance: Complete the KBLI and licensing review before the investor’s or lender’s legal team identifies the issue.

Are the Articles of Association automatically updated?

No. A KBLI conversion in OSS does not automatically amend the company’s Articles of Association.

This distinction is easily overlooked because OSS, AHU and the company’s constitutional documents form part of the same broader compliance framework but do not necessarily update in the same way or at the same time.

An inconsistency between the Articles of Association, KBLI, NIB and actual activities may become relevant during:

• A share transfer;
• A capital increase;
• Bank financing;
• The admission of a new investor;
• Corporate restructuring;
• An M&A transaction;
• Legal due diligence; or
• IPO preparation.

Not every technical conversion requires an amendment to the Articles of Association. If the nature and scope of the company’s activities remain unchanged, an amendment may not be necessary.

Where the classification, description or scope of the activities has materially changed, however, the company should assess whether it needs to amend its Articles of Association, update AHU and OSS, add or remove KBLI codes, or obtain additional licenses.

Practical guidance: Determine whether the change is purely technical or reflects a substantive change in the company’s registered or actual business activities.

Why is KBLI particularly important for PMA companies?

For a PMA company, KBLI connects the business model to Indonesia’s foreign investment and licensing frameworks.

It may affect:

• Whether foreign investment is permitted in the relevant activity;
• The company’s permitted scope of business;
• Its OSS risk classification;
• The licenses and approvals it requires;
• Applicable investment and capital requirements;
• The consistency of its corporate registration;
• A proposed financing or restructuring; and
• The legal readiness of an M&A or IPO transaction.

A PMA company should therefore avoid treating the review as a simple comparison between old and new codes.

A complete assessment should consider:

1. The company’s present activities;
2. Applicable foreign investment conditions;
3. Its OSS risk classification;
4. Required sector-specific licenses;
5. Its Articles of Association and registration records; and
6. Its expected business development over the next one to three years.

The final point is often overlooked. A company that reviews only its current activities may complete an amendment and then need to repeat the process when it introduces a planned product or service.

Practical guidance: Align the review with the company’s near-term growth strategy, not only its historical registration.

Is every company required to update its KBLI?

No. A KBLI review does not automatically mean that an amendment is required.

If the company’s activities have not materially changed, the converted code is accurate, and the Articles of Association, NIB, OSS records and licenses remain aligned, the company may not need to undertake further procedures solely because KBLI 2025 has been implemented.

Additional action may be required where an existing KBLI has been renumbered, divided, consolidated or reclassified, or where the company’s actual activities no longer correspond to its registered position.

Depending on the circumstances, the company may need to:

• Correct or update its OSS information;
• Update its NIB or related licenses;
• Add or remove KBLI codes;
• Amend its Articles of Association;
• Apply for additional sector-specific licenses; or
• Address foreign investment or other regulatory requirements.

Practical guidance: Diagnose first and amend second. This avoids unnecessary filings while ensuring that material inconsistencies are addressed.

What should management review now?

Management can structure the review in four steps.

Step 1: Map the previous and new KBLI codes

Determine whether each existing KBLI has been renumbered, divided, consolidated, reclassified or substantively redefined.

Step 2: Verify the company’s actual activities

Review more than the wording in the registration documents. Consider:

• Products actually sold;
• Services actually provided;
• Material commercial contracts;
• Operational processes;
• Principal sources of revenue; and
• Activities added in recent years.

Step 3: Reconcile the documents and licenses

Compare:

• The Articles of Association and all amendments;
• AHU registration records;
• The NIB;
• OSS information;
• PB and PB UMKU;
• Sector-specific licenses; and
• Other material approvals.

Step 4: Incorporate planned business changes

Consider whether the company expects to change its address, ownership, management, capital, business activities or financing structure.

A coordinated review may reduce duplicated documentation and repeated administrative procedures. The appropriate process, timing and cost will depend on the company’s circumstances.

Our recommendation

Companies should not assume that an automatic OSS conversion creates a compliance problem. Equally, they should not assume that it resolves one.

The proportionate approach is to conduct a targeted review of the converted KBLI against the company’s actual activities, Articles of Association, NIB, OSS records and licenses.

Priority should be given to companies that are expanding, applying for licenses, changing their corporate structure or preparing for financing, M&A, restructuring or an IPO.

The objective is straightforward: identify genuine inconsistencies early, avoid unnecessary amendments and prevent remediable issues from affecting an important business decision or transaction.

Frequently Asked Questions

Does automatic KBLI conversion in OSS mean that my company is fully compliant?

No. Automatic conversion changes the code displayed in the system but does not confirm that the code accurately reflects the company’s actual activities. The company should still verify its Articles of Association, NIB, OSS records and licenses.

Does every company need to amend its Articles of Association?

No. A purely technical code conversion may not require an amendment if the nature and scope of the company’s activities remain unchanged. An amendment should be considered where the registered activities no longer align with KBLI 2025 or the company’s actual operations.

Do existing business licenses remain valid after KBLI 2025?

In principle, existing licenses do not become invalid solely because the KBLI classification has changed. The company should nevertheless confirm that those licenses still correspond to the converted KBLI and its current business activities.

Can a KBLI inconsistency affect financing or an M&A transaction?

Yes. A material inconsistency may be identified during legal due diligence and may require disclosure, remediation or treatment in the transaction documents. Its impact will depend on the affected activity, the seriousness of the issue and whether it can be resolved within the transaction timetable.

What documents are needed for a KBLI compliance review?

A typical review requires the Articles of Association and amendments, AHU registration records, NIB, OSS information, existing licenses and a clear description of the company’s actual activities. Material contracts and revenue information may also be relevant where the correct classification is unclear.

How Schinder Law Firm Can Assist

Schinder Law Firm advises foreign investors and international businesses on market entry, corporate operations, regulatory compliance, transactions and dispute resolution in Indonesia.

Our services include:

• KBLI 2025 compliance reviews;
• PMA foreign investment analysis;
• Review of business activities and Articles of Association;
• Assessment of NIB and business licenses;
• OSS and AHU updates;
• Corporate amendments and restructuring;
• Business licensing;
• Legal due diligence for financing, M&A and IPO transactions; and
• Ongoing corporate compliance support.

If KBLI 2025 may affect your Indonesian operations or an upcoming transaction, our corporate and investment team can provide a preliminary assessment of the legal and practical implications.

Please contact us at info@schinderlawfirm.com or speak with your usual Schinder Law Firm contact.

Author:
Schinder Team

Schinder Law Firm

Indonesian counsel for foreign investors

Local judgment. Commercial clarity. Reliable execution in Indonesia.

Schinder Law Firm is an Indonesian business law firm focused on the legal and commercial priorities of foreign investors. With teams in Jakarta and Bali and nearly two decades of experience, we combine local legal judgment with practical execution to help clients make informed decisions, complete transactions safely and build sustainable operations in Indonesia.

Disclaimer: This publication is provided for general informational purposes only and does not constitute legal advice. Specific advice should be obtained based on the company’s activities, corporate documents, licensing position and proposed transaction.