Avoid These Costly Mistakes! How PP 28/2025 Reshapes Real Estate Licensing in Indonesia

Introduction

Indonesia’s property sector has witnessed significant transformation over the past decade, driven by rapid urban development, increased foreign investment, and shifting regulatory landscapes. As the government works to modernize and streamline business practices, real estate professionals—developers, agents, and investors—must stay informed and adaptive.

In 2025, the Indonesian government enacted Government Regulation No. 28 of 2025 (PP 28/2025), marking a pivotal shift in how real estate licensing is managed and enforced. This regulation replaces and updates older provisions, aligning with the broader agenda of economic reform, transparency, and digital compliance.

For property developers and agents, real estate licensing is no longer a procedural formality—it’s a strategic obligation. Non-compliance can now result in serious consequences, from project delays to full operational suspension. PP 28/2025 introduces stricter requirements for licensing, registration, business activities, and operational transparency.

This article breaks down what PP 28/2025 means for real estate businesses, who is affected, and how professionals can navigate the changes to remain compliant and competitive in Indonesia’s booming property sector. Whether you're launching a new residential project, managing a commercial complex, or representing clients as a real estate agent, understanding this new regulation is essential for your success.

What Is PP 28/2025?

Government Regulation No. 28 of 2025 (PP 28/2025) is the Indonesian government’s latest move to reform and refine business licensing processes across multiple sectors, including real estate. It serves as an update and replacement for PP 5/2021, which initially laid the foundation for risk-based licensing (OSS RBA) under the Omnibus Law framework. PP 28/2025 aims to address gaps in the earlier regulation and introduce clearer, more enforceable standards—especially in high-impact sectors like property development.

One of the regulation’s core objectives is to enhance compliance, transparency, and standardization in how business licenses are processed, reviewed, and monitored. It emphasizes stronger digital integration through the OSS (Online Single Submission) platform and clarifies licensing categories by business risk level: low, medium, and high. Each risk tier comes with different documentation requirements, supervisory mechanisms, and legal consequences for non-compliance.

For the property sector, the impact is particularly significant. Real estate licensing under PP 28/2025 now involves more stringent prerequisites, especially for medium-to-high-risk activities such as large-scale residential development, commercial properties, and land brokerage. Developers must show proof of land control, environmental approvals, and financial readiness. Agents must register under the proper sub-sector classifications and meet specific competency standards.

Unlike previous regulations, PP 28/2025 enforces active supervision—licenses are no longer permanent but can be revoked if requirements are not continuously met. This change pushes real estate professionals to treat real estate licensing as an ongoing obligation rather than a one-time checkpoint.

By redefining how real estate licensing functions, PP 28/2025 ensures that only credible, prepared, and compliant actors can legally operate in Indonesia’s real estate market.

Major Licensing Changes for Developers

Indonesia’s property development landscape is undergoing a pivotal transformation under PP 28/2025, with a renewed emphasis on structured, risk-based licensing. For real estate developers—especially those engaging in medium to large-scale projects—the regulation mandates a more rigorous process within the OSS RBA (Online Single Submission Risk-Based Approach) system.

All developers must now register and operate within this OSS RBA platform to obtain and maintain their real estate licensing status. This is not merely a formality. The system categorizes business activities based on risk level—low, medium, or high—and assigns corresponding licensing requirements and post-licensing obligations. Real estate development is typically considered medium-to-high risk, especially when involving housing complexes, resorts, or commercial properties.

One major shift is the compulsory submission of Environmental Impact Assessments (AMDAL) for developments above a certain scale. Smaller developers may be required to submit UKL-UPL (Environmental Management and Monitoring Efforts), while larger projects must fulfill full AMDAL requirements before proceeding with construction permits. These environmental documents are now directly linked to the issuance and validity of real estate licensing, ensuring environmental compliance is no longer a separate or optional track.

Another key requirement is the Building Use Permit (SLF – Sertifikat Laik Fungsi), which must be secured before any building can be operational. Under PP 28/2025, this certification is now embedded within the broader licensing framework, tying it directly to the developer’s real estate licensing validity.

For small-scale developers, the regulation may seem overwhelming, but the benefit lies in the clarity and legitimacy it brings. Meanwhile, larger developers must reassess internal compliance processes to meet the enhanced scrutiny.

Ultimately, PP 28/2025 turns real estate licensing from a static administrative step into a dynamic, ongoing compliance journey—anchored in accountability, environmental responsibility, and long-term legal adherence.

Requirements for Property Agents

Under PP 28/2025, real estate licensing for property agents—both individuals and brokerage firms—has been significantly revised to promote professional standards and regulatory compliance. The Indonesian government is pushing for greater accountability in the real estate sector, and this starts with those who act as intermediaries between developers and buyers.

One of the biggest changes is the requirement for Sertifikasi Kompetensi—a professional certification that proves a property agent’s qualifications and competence. This certificate must be issued by an officially accredited institution and is now a core prerequisite for real estate licensing. Both local and foreign individuals operating as agents must undergo training, assessment, and formal recognition to be legally allowed to practice.

Brokerage firms must also register under the OSS RBA system and meet minimum capital, staffing, and documentation requirements. This includes having a physical office location, clear organizational structure, and at least one certified property agent in the team. Firms without proper real estate licensing risk suspension, fines, or legal action.

For foreign-owned or foreign-affiliated real estate agencies operating in Indonesia, the new rules raise the bar. They are now required to partner with locally licensed entities and ensure all marketing activities—especially those aimed at foreign buyers—comply with domestic real estate licensing laws. Any promotional campaigns, property listings, or transactions must be conducted under the name of a licensed agency.

By tightening real estate licensing for agents, the government aims to eliminate informal brokers, reduce fraudulent transactions, and enhance trust in the property market. Agents who comply will benefit from increased legitimacy and client confidence, while those who operate informally may soon find themselves out of business.

Risk of Non-Compliance Under PP 28/2025

Failure to comply with the provisions of PP 28/2025 can have serious consequences for developers, property agents, and foreign investors alike. As the government strengthens enforcement mechanisms, businesses operating without proper real estate licensing face a range of penalties—both administrative and financial.

One of the most immediate risks is administrative sanctions. These can include temporary business suspension, operational freezes, or even permanent license revocation. Without valid real estate licensing, companies may be removed from the OSS RBA system, blocking their ability to legally advertise or sell properties.

Financially, the penalties for non-compliance can be substantial. Violations such as operating without proper permits, misrepresenting qualifications, or failing to meet professional certification requirements can lead to fines ranging from tens to hundreds of millions of rupiah. For startups or small agencies, this can be enough to jeopardize long-term sustainability.

Beyond regulatory and monetary issues, non-compliance can damage a business’s reputation. For foreign investors and agencies, this reputational risk is even greater. Working without valid real estate licensing may raise red flags with local authorities and communities, making it harder to form partnerships or gain market trust.

Moreover, illegal operations or informal brokerage activity may lead to litigation from clients who feel misled or defrauded. In an era where transparency and compliance are becoming non-negotiable, aligning with PP 28/2025 and ensuring all real estate licensing requirements are met is not just a formality—it’s a necessity for doing sustainable and credible business in Indonesia’s real estate market.

Checklist for Real Estate Licensing Compliance

To navigate Indonesia’s updated property regulations under PP 28/2025, both developers and property agents must stay aligned with the new compliance framework. Whether you’re launching a residential project or operating a brokerage firm, meeting real estate licensing requirements is no longer optional—it’s a legal obligation.

For Developers:

1. OSS RBA Registration
   All business actors must register through the Online Single Submission Risk-Based Approach (OSS RBA) system. This is the foundation of your real estate licensing status and determines your risk profile and operational eligibility.
2. PBG (Building Approval Permit)
   Formerly known as IMB, the Persetujuan Bangunan Gedung (PBG) is now mandatory for any new development. This must be approved before any physical construction begins.
3. Zoning Compliance (RDTR)
   Every planned development must align with spatial planning regulations (RDTR). Your license may be denied or revoked if your project is in conflict with zoning laws.

For Property Agents:

1. Professional Certification
   Property agents must hold a valid Sertifikasi Kompetensi (competency certification) issued by a recognized Indonesian institution. This certification is now a standard part of real estate licensing compliance.
2. Valid Company Registration
   Your agency must be registered as a legal business entity in Indonesia, complete with NPWP (Tax ID), SIUP, and NIB obtained via OSS RBA. These documents support the legitimacy of your real estate licensing status.
3. Consulting or Legal Support
   Due to evolving policies and stricter inspections, engaging a trusted legal or business consulting partner is strongly recommended. They can help you avoid common licensing mistakes and keep your compliance status up-to-date.

Staying ahead with real estate licensing not only protects your business from legal risks—it enhances credibility, trust, and long-term success in Indonesia’s dynamic property sector.

How This Affects Foreign Investors and Expats

The introduction of PP 28/2025 has significant implications for foreign investors and expatriates seeking involvement in Indonesia’s real estate sector. While the opportunities remain attractive—especially in high-demand areas like Bali, Lombok, and Sumbawa—the legal landscape now demands a deeper commitment to compliance and transparency.

Foreign nationals cannot directly hold land titles for most types of property in Indonesia. Therefore, collaboration with local partners—either through PT PMA (foreign-owned companies) or trusted local nominees—is essential. However, even with a local partner, strict real estate licensing requirements now govern every stage of property development and sales.

Whether investing in a beach club, residential villa, or commercial complex, foreigners must ensure the business is properly registered through the OSS RBA system. Moreover, all supporting documents, including zoning clearance (RDTR), building approvals (PBG), and environmental assessments (AMDAL), must be in order.

For those operating real estate agencies or brokerage services targeting expats, there are additional layers of licensing and certification required—especially the Sertifikasi Kompetensi for all agents. Foreign-owned agencies must also comply with the same licensing structure as local firms, ensuring that they meet updated professional and legal standards.

To navigate these complexities, investors are encouraged to work closely with Indonesian legal advisors and real estate consultants who understand both the regulatory system and the nuances of cross-border investment. They can help secure the right real estate licensing, prevent missteps, and ensure full legal protection.

In this new regulatory environment, compliance is not just about avoiding penalties—it’s about building sustainable, credible, and profitable ventures. Taking a proactive approach to real estate licensing will help foreign investors unlock long-term success in Indonesia’s growing property market.

Final Thoughts: Embracing Regulation for Growth

Indonesia’s real estate landscape is entering a new era with the enforcement of PP 28/2025, ushering in a regulatory framework that prioritizes transparency, accountability, and sustainability. While some may view these changes as burdensome, the truth is—tighter real estate licensing laws offer long-term benefits for the entire sector.

Clear, standardized licensing protocols help build investor confidence, reduce fraud, and elevate the professionalism of developers and property agents alike. In the long run, this contributes to a more stable property market and healthier business ecosystem. For foreign investors and local players, compliance is no longer optional—it is the gateway to operating legally and competitively in Indonesia’s rapidly growing economy.

Now is the time to act proactively. Don’t wait until enforcement tightens or penalties are imposed. If you’re a developer, agent, or investor involved in the Indonesian property sector, take immediate steps to assess your compliance with the latest licensing standards. Engage with legal advisors, attend professional certification programs, and review your OSS RBA registration and permits.

Check your licensing status now. Whether you’re building villas in Bali or launching a brokerage firm in Lombok, staying ahead of regulatory changes will not only protect your operations but also position you for long-term success.

By embracing regulation, we’re not limiting growth—we’re securing it.

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