Legal analysis of the ratio legis behind risk-based business licensing reform in Indonesia: a study of PP No. 24/2018 and PP No. 5/2021
The transition from Government Regulation No. 24 of 2018 to Government Regulation No. 5 of 2021 in Indonesia marks a strategic regulatory reform, shifting towards a risk-based business licensing system through the Online Single Submission platform. This transformation reflects Indonesia’s efforts to...
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| Format: | Article |
| Language: | English |
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Kharkiv National University of Internal Affairs
2025-04-01
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| Series: | Law and Safety |
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| Online Access: | https://pb.univd.edu.ua/index.php/PB/article/view/858 |
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| author | S. N. Rachmania Sukarmi S. Hadiyantina |
| author_facet | S. N. Rachmania Sukarmi S. Hadiyantina |
| author_sort | S. N. Rachmania |
| collection | DOAJ |
| description | The transition from Government Regulation No. 24 of 2018 to Government Regulation No. 5 of 2021 in Indonesia marks a strategic regulatory reform, shifting towards a risk-based business licensing system through the Online Single Submission platform. This transformation reflects Indonesia’s efforts to streamline its regulatory environment, improve Ease of Doing Business rankings, mitigate regulatory overlaps, and align with international best practices. Given the critical role of an efficient business licensing system in fostering economic growth and attracting foreign investment, understanding the legislative rationale (ratio legis) behind this transition is essential. This study employs a normative juridical approach, incorporating statutory and conceptual analysis, along with content analysis of relevant legal materials to systematically assess the impact of these regulatory changes. The research focuses on the efficiency of the reformed licensing process, its role in corruption reduction, and its influence on Indonesia’s Ease of Doing Business performance. Findings indicate that Government Regulation No. 5 of 2021 addresses previous inefficiencies and inconsistencies by introducing a more integrated, standardized, and transparent licensing framework. The implementation of a risk-based model streamlines business licensing procedures, ensures greater legal certainty, and reduces excessive bureaucratic intervention, thereby creating a more business-friendly and investment-attractive environment. The study highlights how Online Single Submission facilitates a more accessible, structured, and digitized licensing system, allowing both domestic and foreign investors to operate within a regulatory framework that ensures transparency, accountability, and predictability. By effectively implementing these reforms, Indonesia enhances its legal certainty and economic competitiveness, thereby positioning itself as a stronger player in the global investment landscape. These regulatory improvements are expected to contribute to a more equitable and prosperous business ecosystem, ultimately supporting sustainable economic growth and enhanced investor confidence. |
| format | Article |
| id | doaj-art-a8031fbd04834dd585b4b4ec36f53d01 |
| institution | DOAJ |
| issn | 1727-1584 2617-2933 |
| language | English |
| publishDate | 2025-04-01 |
| publisher | Kharkiv National University of Internal Affairs |
| record_format | Article |
| series | Law and Safety |
| spelling | doaj-art-a8031fbd04834dd585b4b4ec36f53d012025-08-20T03:09:23ZengKharkiv National University of Internal AffairsLaw and Safety1727-15842617-29332025-04-0196114014910.32631/pb.2025.1.12858Legal analysis of the ratio legis behind risk-based business licensing reform in Indonesia: a study of PP No. 24/2018 and PP No. 5/2021S. N. Rachmania0Sukarmi1S. Hadiyantina2Brawijaya University (East Java, Indonesia)Brawijaya University (East Java, Indonesia)Brawijaya University (East Java, Indonesia)The transition from Government Regulation No. 24 of 2018 to Government Regulation No. 5 of 2021 in Indonesia marks a strategic regulatory reform, shifting towards a risk-based business licensing system through the Online Single Submission platform. This transformation reflects Indonesia’s efforts to streamline its regulatory environment, improve Ease of Doing Business rankings, mitigate regulatory overlaps, and align with international best practices. Given the critical role of an efficient business licensing system in fostering economic growth and attracting foreign investment, understanding the legislative rationale (ratio legis) behind this transition is essential. This study employs a normative juridical approach, incorporating statutory and conceptual analysis, along with content analysis of relevant legal materials to systematically assess the impact of these regulatory changes. The research focuses on the efficiency of the reformed licensing process, its role in corruption reduction, and its influence on Indonesia’s Ease of Doing Business performance. Findings indicate that Government Regulation No. 5 of 2021 addresses previous inefficiencies and inconsistencies by introducing a more integrated, standardized, and transparent licensing framework. The implementation of a risk-based model streamlines business licensing procedures, ensures greater legal certainty, and reduces excessive bureaucratic intervention, thereby creating a more business-friendly and investment-attractive environment. The study highlights how Online Single Submission facilitates a more accessible, structured, and digitized licensing system, allowing both domestic and foreign investors to operate within a regulatory framework that ensures transparency, accountability, and predictability. By effectively implementing these reforms, Indonesia enhances its legal certainty and economic competitiveness, thereby positioning itself as a stronger player in the global investment landscape. These regulatory improvements are expected to contribute to a more equitable and prosperous business ecosystem, ultimately supporting sustainable economic growth and enhanced investor confidence.https://pb.univd.edu.ua/index.php/PB/article/view/858ratio legisrisk-based licensingonline single submissionease of doing businessregulatory reforminvestment law. |
| spellingShingle | S. N. Rachmania Sukarmi S. Hadiyantina Legal analysis of the ratio legis behind risk-based business licensing reform in Indonesia: a study of PP No. 24/2018 and PP No. 5/2021 Law and Safety ratio legis risk-based licensing online single submission ease of doing business regulatory reform investment law. |
| title | Legal analysis of the ratio legis behind risk-based business licensing reform in Indonesia: a study of PP No. 24/2018 and PP No. 5/2021 |
| title_full | Legal analysis of the ratio legis behind risk-based business licensing reform in Indonesia: a study of PP No. 24/2018 and PP No. 5/2021 |
| title_fullStr | Legal analysis of the ratio legis behind risk-based business licensing reform in Indonesia: a study of PP No. 24/2018 and PP No. 5/2021 |
| title_full_unstemmed | Legal analysis of the ratio legis behind risk-based business licensing reform in Indonesia: a study of PP No. 24/2018 and PP No. 5/2021 |
| title_short | Legal analysis of the ratio legis behind risk-based business licensing reform in Indonesia: a study of PP No. 24/2018 and PP No. 5/2021 |
| title_sort | legal analysis of the ratio legis behind risk based business licensing reform in indonesia a study of pp no 24 2018 and pp no 5 2021 |
| topic | ratio legis risk-based licensing online single submission ease of doing business regulatory reform investment law. |
| url | https://pb.univd.edu.ua/index.php/PB/article/view/858 |
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