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The Business Identification Number (NIB) is a legal identity that every business actor in Indonesia must possess. This document signifies that a business entity has been officially registered under Indonesia’s prevailing legal and administrative system. Without an NIB, a company has no legal foundation to lawfully carry out business activities.

The NIB is issued through the Online Single Submission (OSS) system, an integrated licensing platform developed by the government to simplify business administration processes. OSS allows business actors to manage various permits through a single digital gateway that is efficient and integrated across multiple agencies.

More than just an identification number, the NIB serves as proof of legality that covers various administrative and operational aspects of a company. It is an essential prerequisite for gaining access to customs services, enrolling in labor and health social security programs, and fulfilling mandatory labor reporting. Therefore, the issuance of an NIB is a highly crucial first step for any business entity wishing to officially commence operations in Indonesia.

Background and Legal Basis

The issuance of the Business Identification Number (NIB) has a strong legal foundation, namely Law Number 6 of 2023. This law ratifies Government Regulation in Lieu of Law (Perpu) Number 2 of 2022 on Job Creation as a valid and binding regulation. This step is part of a major reform in Indonesia’s business licensing system.

Through this regulation, the government introduced a risk-based business licensing system. This approach aligns the type and level of licensing requirements with the degree of risk associated with each business activity. Low-risk businesses only require an NIB, while medium- or high-risk businesses must meet additional standards or obtain further permits in accordance with applicable regulations.

To support this system, the government developed the Online Single Submission (OSS) platform, managed by the Ministry of Investment/BKPM. OSS serves as the national integrated licensing service center, replacing the old model that was slow, bureaucratic, and spread across various agencies. With OSS, the entire licensing process becomes more efficient, transparent, and digitally documented.

NIB in OSS 1.0 to OSS RBA

The issuance of the NIB was first introduced through the OSS 1.0 system in 2018, as part of the government’s efforts to simplify and accelerate the business licensing process in Indonesia. OSS 1.0 integrated licensing services from various ministries and agencies into a single online platform. At this initial stage, the NIB functioned as a business identity while also replacing several administrative documents such as the Company Registration Certificate (TDP), Importer Identification Number (API), and customs access.

However, over time, the OSS 1.0 system faced various challenges, such as a lack of data integration between agencies, slow verification processes, and limitations in handling diverse types of businesses. To address these issues, the government introduced an upgraded version, OSS 1.1, which brought several technical improvements and enhanced system stability. Nevertheless, its approach was still sector-based and had not yet adopted a risk-based framework.

The biggest transformation came with the launch of OSS RBA (Risk-Based Approach) in 2021. OSS RBA introduced a paradigm shift from sector-based licensing to risk-based licensing. Under this approach, the types of licenses and obligations required of business actors are adjusted according to the risk level of their activities—low, medium, or high. The system makes the NIB the primary entry point and automatically aligns additional requirements such as standard certificates or technical permits. OSS RBA has improved the speed, transparency, and legal certainty of the business licensing process in Indonesia.

Read also: Understanding OSS RBA

Functions and Scope of the NIB

The Business Identification Number (NIB) serves primarily as a national business identity. Any business entity that holds an NIB is legally recognized and can operate across the entire territory of Indonesia. With this system, business actors no longer need to manage multiple business identity documents separately at different government agencies.

The NIB also replaces several important administrative documents such as the Company Registration Certificate (TDP), Importer Identification Number (API), and customs access. In this way, the NIB streamlines administrative processes and accelerates the integration of businesses into the national regulatory system. Business actors only need a single identification number that can be used for various operational and legal purposes.

In addition, the NIB is a requirement for registration in health and employment social security programs, as well as proof of the initial manpower reporting (WLKP). Its issuance is carried out digitally through the OSS system and electronically signed using a certificate from BSSN, ensuring the validity and security of the document. This process minimizes the potential for manipulation and guarantees the reliability of business data entered into the national system.

Information Contained in the NIB Document

The NIB document provides fundamental information that constitutes the legal identity of a business entity. Key details included are the investment status—whether Domestic Investment (PMDN) or Foreign Investment (PMA)—the company’s address, phone number, and official email address. This information serves as the basis for various administrative purposes and communication with government agencies.

In addition to basic identity information, the NIB is accompanied by an attachment that details business activities based on the Indonesian Standard Industrial Classification (KBLI). Each KBLI entry includes the business field code and title, operational location, risk level, and the corresponding licensing status. Examples of licensing statuses that may appear in the NIB document include “NIB Issued,” “Standard Certificate,” and “Requires Verification,” depending on the type of business and its risk level.

It is the risk level that determines the type of licensing requirements a business must fulfill. For low-risk business activities, the issuance of an NIB alone is sufficient as an operational license. However, for medium- to high-risk activities, companies are required to provide additional documents such as technical standard certificates or operational permits from the relevant ministries or agencies. Therefore, understanding the contents of the NIB attachment is crucial to ensuring compliance with the regulations governing the business sector being operated.

Next Steps After the NIB Is Issued

Obtaining a Business Identification Number (NIB) does not mean that the entire licensing process is complete. Business actors are still required to meet various additional requirements, particularly those determined by the risk level of their business. The OSS system automatically classifies business activities into low, medium, or high risk categories and sets out the subsequent steps that business actors must fulfill.

For businesses classified as medium- or high-risk, one of the key obligations is the application for and fulfillment of a Standard Certificate or other technical approvals. This process must be completed within a specified timeframe, generally no later than 90 working days before operational or production activities begin. Failure to meet this deadline may result in the business license becoming invalid or temporarily suspended.

In addition, business actors are required to continuously monitor their licensing status through their OSS account. Any updates related to permits and technical requirements can be accessed online, including obligations to comply with NSPK (Norms, Standards, Procedures, and Criteria) set by the relevant ministries or agencies. Thus, administrative compliance and regular data updates become an essential part of sustainable business legality management.