Indonesia is one of Asia’s fastest-growing economies, driven by a vast base of micro, small, and medium enterprises (MSMEs). With more than 66 million MSMEs contributing around 61% of the country’s GDP and employing 97% of the workforce, the nation presents enormous opportunities for investors, lenders, and multinational partners.
But opportunity comes with complexity. Fragmented registries, high levels of informality, and shifting regulation make Know Your Business (KYB) in Indonesia a uniquely difficult task. For organisations expanding in this market, risk exposure can rise sharply without robust verification strategies.
Why KYB in Indonesia Is a Complex Jurisdiction
- Fragmented registries – Company data is split across multiple systems. AHU Online provides entity registration information, while the OSS (Online Single Submission) platform manages licensing. Neither gives a full picture on its own, and both primarily operate in Bahasa Indonesia, which adds another barrier for international firms.
- Informality remains high – Millions of MSMEs are only partially formalised, often lacking full registration or valid licences. Research shows this limits transparency and restricts access to finance.
- Regulatory momentum – In June 2025, Government Regulation No. 28/2025 (GR 28/2025) expanded risk-based licensing to 22 sectors and introduced automatic approval mechanisms (fiktif positif). On the surface, this simplifies the licensing process. But it also shifts responsibility onto businesses to monitor compliance after approval. For example, a food distributor may be granted automatic approval, but if subsequent checks reveal missing permits or incomplete ownership disclosure, regulators can revoke the licence. In practice, this means companies must adopt continuous KYB in Indonesia to ensure their partners remain compliant beyond initial onboarding.
- Beneficial ownership opacity – Identifying ultimate beneficial ownership (UBO) remains challenging, with the IMF and FATF both highlighting weaknesses in transparency across Indonesia.
From Compliance Task to Strategic Priority
- Fraud and financial crime – Indonesia’s Financial Intelligence Unit (PPATK) has flagged billions of dollars in suspicious transactions in recent years, much of it linked to the misuse of corporate entities.
- Speed versus risk – Manual checks and fragmented data slow onboarding, increasing friction in sectors like fintech and supply chains.
- Reputational exposure – Partnering with unverified businesses can lead to brand damage and regulatory scrutiny.
KYB in Indonesia is no longer just a compliance requirement; it has become a strategic imperative for driving growth and managing risk. Robust verification protects reputation by avoiding association with illicit entities, accelerates decision-making by reducing onboarding delays, and underpins sustainable growth by ensuring that expansion rests on trusted, compliant partners. In a high–growth but high-risk market, Know Your Business in Indonesia is the difference between scaling with confidence and stumbling into regulatory or reputational crises.
Smarter KYB: The Direction of Travel
Forward-looking organisations are adopting:
- Risk-based verification – deeper checks for high-risk entities, lighter checks for low-risk cases.
- Continuous monitoring – recognising that ownership, licensing, or compliance status can change quickly.
- Technology-driven processes – APIs, automation, and integrated data sources are replacing manual, fragmented checks.
AsiaVerify’s Role in This Shift
Against this backdrop, AsiaVerify has introduced Enhanced Indonesia KYB reports to help compliance teams adapt to one of the region’s most complex jurisdictions.
- Faster response times – a new upgrade that enables quicker onboarding and decision-making.
- “LITE” report option – newly added flexibility, allowing streamlined checks when speed is critical and detailed reports when deeper risk analysis is required.
- Built-in language support – already a core feature of all AsiaVerify reports, but especially valuable in Indonesia where official registries are Bahasa-only. Reports are fully translated into clients’ preferred business language, eliminating delays and misinterpretation.
These improvements give compliance teams the speed and flexibility they need to manage risk effectively in Indonesia.
Turning Indonesia’s KYB Complexity into Opportunity
Indonesia’s promise comes with complexity. The same MSME dynamism that fuels growth also creates opacity and risk. Businesses that succeed will be those that combine opportunity with disciplined, technology-enabled KYB.
AsiaVerify’s enhanced Indonesia KYB reports are built with this in mind, enabling organisations to assess risk confidently and act with speed in a market full of both challenges and opportunities.
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