KBLI Does Not Match the Actual Business Activities: What Are the Legal Risks for Companies?

A company may develop significantly beyond the activities it conducted when it was first established.

A business initially engaged only in trading may begin providing consultancy services. A technology company may expand into operating digital platforms. A manufacturer may add distribution, installation, or maintenance services as separate revenue-generating activities.

Business expansion itself is entirely normal.

A legal issue can arise, however, where the company's actual activities no longer correspond with the activities stated in its Articles of Association, its Indonesian Standard Industrial Classification or KBLI codes, and the Business Licensing recorded through the Online Single Submission or OSS system.

Such a mismatch does not necessarily mean that a violation has automatically occurred.

The company first needs to understand why the mismatch exists and whether the actual activity substantively requires a different KBLI classification and additional Business Licensing.

This issue has become particularly relevant in 2026 following the implementation of KBLI 2025.

Why Does KBLI Matter?

KBLI is Indonesia's national classification system for grouping economic activities according to their characteristics.

It is not merely an administrative code.

Within Indonesia's Risk-Based Business Licensing framework, a company's KBLI classification can affect matters including:

• identification of the business activity;

• risk classification;

• required Business Licensing;

• Standard Certificates;

• sector-specific licences;

• Supporting Business Licences;

• environmental and spatial requirements;

• competent ministries or regulatory authorities;

• investment requirements; and

• in certain sectors, foreign ownership or partnership requirements.

A company should therefore not select a KBLI merely because its title appears similar to the company's business.

The description and scope of the classification should also be reviewed.

KBLI 2025 Is Now the Updated Classification

In December 2025, Statistics Indonesia issued KBLI 2025 through Statistics Indonesia Regulation No. 7 of 2025.

The new classification updated KBLI 2020 to reflect developments in economic activity, including new activities relating to digital transformation, technology, and climate-related industries.

Implementation was subsequently carried out across government administration and the licensing ecosystem.

A previous KBLI code does not necessarily convert directly into one new code.

The transition may involve:

• an unchanged code;

• one old code becoming one new code;

• one old code being divided into several new codes;

• several old codes being consolidated; or

• several codes being reorganised.

A change displayed in OSS therefore does not necessarily mean that the company itself changed its business.

KBLI 2025 Does Not Automatically Invalidate Existing Licences

This distinction is particularly important.

The Government has confirmed that existing Business Licences issued before the implementation of KBLI 2025 remain valid.

Companies therefore should not assume that all existing NIBs and Business Licences became invalid merely because the underlying classification was updated.

OSS also supports the transition and updating of classifications.

Companies should nevertheless review the conversion carefully, particularly where a previous code has been divided into several new classifications or where its description has changed.

A different issue arises where there has been a substantive change to the company's purposes, objectives, or actual business scope.

Such changes may require updates through the corporate administration and OSS systems.

A Code Conversion Is Different from a New Business Activity

Assume that PT A previously held a KBLI classification for a particular trading activity.

Following the implementation of KBLI 2025, that classification is renumbered or divided.

If PT A continues conducting the same underlying business, the matter is primarily one of classification transition.

The analysis is different where PT A originally sold products but subsequently begins providing paid consultancy services to customers.

Consultancy is potentially a separate economic activity.

The company should determine whether the new service remains within its existing KBLI scope or requires another classification.

Where another KBLI is required, the company should also consider whether its Articles of Association and Business Licensing need to be amended.

Review the Articles of Association

For an Indonesian limited liability company, KBLI should also be considered together with the Articles of Association.

Indonesian company law requires a company's purposes, objectives, and business activities to be stated in its Articles.

Where a new business line falls outside those provisions, simply adding a classification to OSS may not be sufficient.

The company should first consider whether its Articles of Association need to be amended.

An amendment involving the purposes, objectives, and business activities of the company requires the applicable corporate process under the Company Law.

This generally involves shareholder approval, a notarial deed, and corporate administration through the Legal Entity Administration System.

An NIB Is Not Necessarily the Only Licence Required

Companies should also avoid assuming that possession of an NIB automatically permits every commercial activity.

The NIB functions as the formal business identity within the OSS framework.

Business Licensing, however, is risk-based.

Depending on the relevant activity and risk level, a company may require:

• an NIB;

• a Standard Certificate;

• a specific Licence;

• basic requirements; and/or

• Supporting Business Licensing.

A company that has an NIB but begins carrying on a separate activity for which the applicable standards or licences have not been obtained may therefore need to update its licensing position.

Example: A Trading Company Begins Providing Services

Consider a company registered to conduct wholesale trade in particular products.

Over time, customers begin paying the company for consultancy and implementation services relating to those products.

Where such support is inherently included within the licensed trading activity, the analysis may be straightforward.

However, where the company separately charges professional fees, employs specialists, and treats consultancy as an independent revenue stream, it should determine whether that activity is actually covered by the existing trading classification.

If not, the relevant service KBLI should be identified.

The company should then determine its risk classification and licensing requirements.

Is It Better to Register as Many KBLI Codes as Possible?

Not necessarily.

Some companies include multiple KBLI codes at incorporation to anticipate future expansion.

That approach should still be managed carefully.

Each additional classification may carry different implications relating to:

• risk level;

• operational standards;

• licences;

• project locations;

• reporting;

• technical regulators;

• investment requirements; and

• regulatory supervision.

For foreign investment companies, additional activities can also affect investment-value calculations and foreign investment requirements.

Companies should therefore select activities they actually conduct or genuinely intend to conduct rather than accumulating classifications without considering their regulatory consequences.

Risk 1: Existing Licensing Does Not Cover the Actual Activity

The most direct concern is that a company may be carrying on an activity that falls outside its existing Business Licensing.

Government Regulation No. 28 of 2025 requires business operators to have the applicable Business Licensing to conduct their activities.

If the company's actual activity constitutes a separate business with a different risk level or applicable standard, the existing licensing position should be reviewed.

An NIB covering a trading business, for example, does not necessarily replace a Standard Certificate or sector-specific Licence required for another activity.

Risk 2: The Wrong Risk Classification May Have Been Applied

OSS licensing is based on the risks associated with each business activity.

Selecting an inappropriate KBLI can result in the wrong licensing pathway being applied to the company's actual operations.

A business that in reality falls within a medium-high or high-risk classification may therefore have failed to satisfy the standards or licensing requirements applicable to its actual activity.

This is particularly important in sectors involving health, safety, environmental impact, construction, energy, transportation, telecommunications, food, pharmaceuticals, and other technically regulated activities.

Risk 3: Regulatory Supervision

Business licensing does not end once documents have been issued.

Government Regulation No. 28 of 2025 and Minister of Investment/BKPM Regulation No. 5 of 2025 also establish a framework for supervision of business activities.

Authorities may assess compliance with basic requirements, Business Licensing, Supporting Business Licensing, applicable standards, and investment obligations.

Where the company's operations do not correspond with its licensing position, remedial action may be required.

Depending on the circumstances, administrative enforcement may also follow.

Risk 4: Administrative Sanctions

A discrepancy in a KBLI code does not automatically result in the most serious sanction.

The nature of the violation, applicable sector, licensing deficiency, compliance history, and corrective action remain relevant.

Nevertheless, the current licensing framework allows administrative sanctions that may include:

• warnings;

• temporary suspension of business activities;

• administrative fines;

• coercive administrative measures;

• revocation of licences, certifications, or approvals; and/or

• revocation of basic requirements, Business Licensing, or Supporting Business Licensing.

Temporary suspension may also affect the company's ability to conduct business activities or carry out specified corporate actions through OSS.

A material licensing mismatch should therefore be addressed before it develops into an enforcement issue.

Risk 5: Missing Sector-Specific Licences

Certain businesses remain subject to detailed sector regulation in addition to OSS.

Depending on the activity, further requirements may apply in sectors such as:

• trade;

• manufacturing;

• construction;

• energy;

• healthcare;

• pharmaceuticals;

• transport;

• telecommunications;

• environmental services; or

• regulated professional services.

An incorrect KBLI may mean that the company has not identified the relevant technical licence or standard at all.

The issue can therefore extend beyond classification and become a substantive operational licensing problem.

Risk 6: Due Diligence Findings

A mismatch between actual activities and licensing is commonly reviewed in legal due diligence.

A prospective investor or purchaser may compare:

• the Articles of Association;

• corporate registry information;

• the NIB;

• KBLI classifications;

• Business Licensing;

• Supporting Business Licensing;

• sector licences;

• financial statements;

• customer contracts; and

• the activities actually conducted by the company.

Where a significant portion of revenue comes from an activity that is not reflected in the company's legal documentation, this may become a material due diligence finding.

An investor or purchaser may then require remediation before closing.

The issue may also influence representations and warranties, conditions precedent, indemnities, or transaction structure.

A KBLI mismatch can therefore become a commercial issue in an investment or acquisition.

Risk 7: Additional Issues for Foreign Investment Companies

A PT PMA needs to conduct an additional review before adding or changing its KBLI classifications.

Not every business activity is subject to identical investment conditions.

A particular activity may be open to foreign investment, subject to specified conditions, allocated to cooperatives or MSMEs, or subject to partnership requirements.

Minister of Investment/BKPM Regulation No. 5 of 2025 also establishes minimum investment requirements for foreign investment companies using calculation methods related to business activities and KBLI classifications.

A PT PMA should therefore review:

• foreign investment eligibility;

• foreign ownership restrictions;

• partnership requirements;

• minimum investment value;

• capital requirements;

• risk classification; and

• sector-specific licensing.

Adding a KBLI to a foreign investment company should not be treated merely as an administrative update.

Does an Incorrect KBLI Automatically Invalidate the Company's Contracts?

It would be inaccurate to conclude that every contract becomes invalid simply because of a KBLI mismatch.

Contract validity must be analysed under contract law and the particular circumstances.

Licensing deficiencies can nevertheless create separate contractual issues.

For example, a customer contract may require a service provider to maintain a particular licence.

If the company does not actually hold that licence, issues may arise concerning contractual compliance or representations provided to the customer.

In highly regulated sectors, holding the appropriate licence may also be a legal prerequisite for carrying out the relevant activity.

Licensing and contractual consequences should therefore be assessed separately.

How Can a Company Determine Whether Its KBLI Is Correct?

The analysis should start with actual operations rather than the classifications already listed in OSS.

First, identify each material source of revenue.

Determine what activities the company actually performs to earn that revenue.

Second, review customer and supplier contracts.

The description of goods and services in commercial contracts often provides a clearer picture of the real activity than the company's trading name.

Third, compare those activities with the detailed descriptions under KBLI 2025.

Do not rely on the title alone.

Review the included and excluded activities.

Fourth, identify the applicable risk level and licensing requirements through OSS.

Finally, compare those findings against the company's Articles of Association and corporate registry information.

This process can determine whether the issue is merely a KBLI conversion or a genuine licensing gap.

How Should a Mismatch Be Corrected?

The appropriate process depends on the nature of the mismatch.

Where the issue results solely from conversion from KBLI 2020 to KBLI 2025 without any substantive change in the business, the company should review the conversion and updated OSS information.

Where the company has introduced a new business activity, the correct KBLI 2025 classification should first be identified.

The company should then review whether its Articles of Association already cover the relevant activity.

If not, an amendment may be required.

Once the corporate documentation is aligned, the company can update or add the relevant business activity through OSS and satisfy the licensing requirements for the applicable risk level.

Where sector licences or Supporting Business Licensing are required, those requirements should also be completed before the relevant activity is conducted as required by law.

Does Every KBLI Conversion Require an Amendment to the Articles?

Not necessarily.

A change to a numerical classification resulting from KBLI conversion is not necessarily the same thing as a change to the company's purposes or business activities.

Where the underlying business remains unchanged and only the classification has been updated, the position should be assessed under the KBLI 2025 transition mechanism.

Where the company has substantively expanded its business into a new activity outside the existing purposes or business scope, an amendment to the Articles may be required.

The key question is therefore not merely whether the KBLI number has changed.

The more important question is whether the company's actual business has changed.

Do Not Rely Only on the KBLI Title

A common source of classification errors is selecting a KBLI based solely on its title.

Activities with similar commercial names can fall under different classifications and regulatory requirements.

Conversely, a company describing itself broadly as an "IT company" may actually engage in several distinct activities, such as software development, IT consulting, digital platform operation, hardware trading, data services, or other activities.

Each should be assessed based on what the company actually does.

KBLI mapping should therefore begin with the company's business model.

Review KBLI before Investment or Expansion

A company does not need to wait for a regulatory inspection before reviewing its licensing position.

An internal KBLI review can be particularly useful when the company:

• launches a new product or service;

• enters a new sector;

• establishes a new location;

• changes its business model;

• accepts a new investor;

• undertakes a merger or acquisition;

• restructures its corporate group;

• changes foreign ownership;

• prepares for financing; or

• intends to participate in a material tender.

Such a review can identify gaps before they become transaction or enforcement issues.

What Should Companies Do in 2026?

With KBLI 2025 now implemented within the business licensing ecosystem, companies should review their existing legal information.

First, review the conversion of each KBLI 2020 classification previously used by the company.

Second, determine whether each classification remained the same, changed, was divided, consolidated, or reorganised.

Third, compare the resulting classifications with the company's actual operations.

Fourth, review consistency between:

• the Articles of Association;

• AHU corporate information;

• the NIB;

• OSS information;

• KBLI classifications;

• Business Licensing;

• Supporting Business Licensing;

• sector-specific licences; and

• actual commercial operations.

Finally, where a new activity is identified, determine the appropriate remediation sequence rather than merely adding another code to OSS.

Conclusion

KBLI should not be treated simply as a number entered when a company obtains its NIB.

Within Indonesia's Risk-Based Business Licensing framework, KBLI classifications form an important starting point for identifying the activity, its risk level, applicable standards, and required licensing.

A mismatch nevertheless needs to be analysed carefully.

Changes resulting from the transition from KBLI 2020 to KBLI 2025 do not automatically invalidate previously issued Business Licences.

A more significant issue arises when a company is substantively carrying on activities that are not covered by its Articles of Association and Business Licensing.

In those circumstances, the company may face licensing deficiencies, regulatory findings, administrative sanctions, sector-specific issues, and material due diligence findings in an investment or acquisition.

Companies should therefore review KBLI classifications based on their actual business model, operations, and revenue-generating activities rather than relying solely on the codes historically recorded in OSS.