Can a Foreign Waste Management Company Operate in Indonesia? A Licensing Overview

A foreign waste management company can operate in Indonesia, provided that it uses a legally recognized business structure and obtains the business licences, environmental approvals, and technical approvals required for its proposed activities.

The licensing requirements depend principally on the type of waste being managed, the nature of the proposed activity, and the facilities involved. In particular, activities involving hazardous and toxic waste (Bahan Berbahaya dan Beracun or B3) are subject to a more specific regulatory framework than activities involving non-B3 waste.

The general business licensing framework is administered through the Online Single Submission (OSS) system, while waste management activities are subject to additional requirements under the environmental regulatory framework.

1. Establishing a Legal Presence in Indonesia

Under Indonesia’s risk-based business licensing framework, business licensing is administered electronically through the OSS system.

Government Regulation No. 28 of 2025 on Risk-Based Business Licensing recognizes several categories of business actors, including individual entrepreneurs, business entities, representative offices, and foreign business entities.

For a foreign company intending to conduct actual waste management activities in Indonesia, such as waste collection, treatment, utilization, landfilling, or related operations, the relevant business structure must be capable of conducting the proposed commercial activity in Indonesia.

In practice, a foreign investor intending to establish and operate a waste management business would generally establish an Indonesian foreign-investment company (Perseroan Terbatas Penanaman Modal Asing or PT PMA) and obtain the required business licensing through OSS.

A representative office should be distinguished from an operating company. A representative office is subject to limitations on its activities and is not intended to conduct the commercial sale or purchase transactions associated with operating a waste management business.

Accordingly, the appropriate legal structure should be determined before the company proceeds with its operational licensing.

2. OSS-Based Business Licensing

The general business licensing framework is based on risk-based licensing through OSS.

Government Regulation No. 28 of 2025 provides that risk-based business licensing is implemented electronically through OSS. The system covers, among other matters, basic requirements, business licensing, and supervision.

The environmental sector is among the sectors covered by the framework, including activities relating to waste, refuse, hazardous and toxic materials management, and wastewater management.

For a foreign-owned waste management company, obtaining an NIB (Business Identification Number) is therefore an essential starting point.

Under Minister of Investment Regulation No. 5 of 2025, the NIB functions as the business actor’s identification and forms part of the legal basis for conducting business activities. The NIB also records the relevant KBLI classification.

The NIB, however, should not be treated as a substitute for sector-specific licensing where the proposed activity is subject to additional requirements. Depending on the risk level and type of waste management activity, the company may need to fulfil further licensing and environmental requirements before commencing operations.

3. Basic Requirements for Waste Management Facilities

A waste management company generally needs to assess requirements relating to the location, environmental impact, and physical facilities of its proposed operation.

Three areas are particularly relevant: spatial conformity, environmental approval, and building requirements.

Spatial Conformity

A facility such as a waste treatment plant, landfill, warehouse, or other waste management installation must be assessed against the applicable spatial planning framework.

Depending on the circumstances, the company may need to obtain the relevant KKPR (Spatial Utilization Activity Suitability) or fulfil the applicable spatial conformity requirements.

The spatial assessment is important because the legality of the business activity does not, by itself, establish that the proposed site may be used for the intended waste management facility.

Environmental Approval

Waste management activities may also require an Environmental Approval (Persetujuan Lingkungan).

Under the environmental framework, the required environmental document may take the form of an AMDAL, UKL-UPL, or SPPL, depending on the characteristics and environmental impact of the proposed activity.

The applicable environmental requirements should therefore be assessed based on the proposed business activity, location, scale, and environmental parameters rather than solely on the nationality of the investor.

For B3 waste management activities, additional environmental and technical requirements may apply.

Building Requirements

Where the project involves the construction of buildings or other structures, the company may also need to obtain the applicable building approvals, including PBG (Building Approval) and, where applicable, SLF (Certificate of Functionality).

These requirements should be considered separately from the business and environmental licences for the waste management activity itself.

4. Licensing for B3 Waste Management

B3 waste management is subject to a specific licensing regime.

Minister of Environment and Forestry Regulation No. 9 of 2023 on Business Licensing and Government Approval in the Field of B3 Waste Management provides that B3 waste management activities conducted by business actors require a business licence.

The regulation covers B3 waste management activities including collection, utilization, treatment, and landfilling.

The relevant licensing classification depends on the activity undertaken. KBLI 38120 – Collection of Hazardous Waste applies to B3 waste collection activities, while KBLI 38220 – Treatment and Disposal of Hazardous Waste covers activities relating to B3 waste utilization, treatment, and landfilling.

Accordingly, a foreign-owned company intending to conduct B3 waste management in Indonesia must identify the specific activities it intends to perform and obtain the corresponding business licensing.

The competent authority may depend on the applicable allocation of governmental authority.

5. B3 Waste Management Licensing Procedure

Applications for B3 waste management business licensing are submitted through OSS.

Under Minister of Environment and Forestry Regulation No. 9 of 2023, the process includes administrative and substantive verification.

The application is first subject to an administrative completeness assessment. Where the required documents are incomplete, the applicant may be required to correct and resubmit the application within the prescribed period.

Once administrative requirements have been fulfilled, the application proceeds to substantive verification. The relevant authority then determines whether the requirements have been satisfied and issues the applicable licensing decision through the OSS system.

The regulation also provides specific periods for the administrative review, substantive verification, correction of documents, and issuance or refusal of the licence.

A B3 waste management business licence is generally valid for five years and may be extended in accordance with the applicable requirements. An extension application must be submitted within the period prescribed by the regulation.

Where a planned change to the operation requires an amendment to the environmental approval, the relevant B3 waste management business licence may also need to be amended.

6. Technical Approval and Operational Requirements

Obtaining the business licence does not necessarily mean that a B3 waste management facility may immediately commence operations.

Depending on the activity, additional technical requirements may apply, including a Technical Approval for B3 Waste Management (PLB3) and an Operational Feasibility Letter (SLO).

These requirements are particularly relevant to B3 waste utilization, treatment, and landfilling activities.

The technical approval establishes the applicable technical requirements for the proposed activity and facility. Following construction or preparation of the facility in accordance with the approved technical requirements, the relevant authority may conduct verification before the facility is permitted to commence operation.

The SLO therefore forms an important part of the transition from licensing and facility preparation to actual operation.

For B3 waste management activities, ongoing compliance does not end once the relevant licence and approvals have been obtained. Operators are required to comply with the conditions of their technical approvals, including requirements relating to the collection, storage, and packaging of B3 waste, as well as applicable emission and wastewater standards. They must also maintain their facilities in accordance with the approved technical requirements and fulfil the periodic reporting obligations applicable to B3 waste utilization or treatment activities.

7. B3 Waste Transportation

Transportation of B3 waste is subject to a separate licensing requirement.

Government Regulation No. 22 of 2021 provides that B3 waste transportation requires a B3 waste transportation recommendation and a business licence for B3 waste transportation.

The transportation process involves requirements relating to the proposed transportation activity, vehicles, routes, and other technical matters.

A licensed transporter is also required to transport B3 waste in accordance with the applicable recommendation and licence, use the required electronic manifest system, and fulfil the applicable reporting obligations.

Accordingly, a waste management company that intends not only to treat or collect B3 waste but also to transport it should assess the transportation requirements separately from its B3 waste management licence.

8. Export and Cross-Border Movement of B3 Waste

Cross-border movement of B3 waste is subject to additional requirements.

Under the environmental framework, export of B3 waste is subject to specific conditions and is not simply an extension of the domestic B3 waste management licence.

Among the requirements are notification to the relevant environmental authority, submission of information concerning the transportation route, completion of the required notification documentation, and the applicable export licensing process.

The framework also limits export in circumstances where domestic technology is available for the relevant utilization or treatment.

Accordingly, a foreign waste management company considering a regional waste management model involving Indonesia should distinguish between domestic collection and management of B3 waste, transportation of B3 waste, and the import or export of B3 waste. These activities are subject to different regulatory requirements, and the licence or approval applicable to one activity should not be assumed to authorize the others.

9. Non-B3 Waste Management

The regulatory analysis is different where the company handles non-B3 waste.

Non-B3 waste management remains subject to environmental and business licensing requirements, although the specific requirements depend on the nature and scale of the activity.

Minister of Environment and Forestry Regulation No. 19 of 2021 regulates the management of non-B3 waste and includes requirements concerning the storage and handling of non-B3 waste.

For a company conducting commercial non-B3 waste management activities, the general licensing framework may include the NIB, applicable spatial conformity requirements, environmental approval, and the relevant business licence under the OSS system.

The environmental approval applicable to a particular project may differ depending on its scale, location, and environmental characteristics.

Accordingly, a foreign waste management company should not assume that the licensing requirements applicable to B3 waste automatically apply in the same manner to non-B3 waste.

10. Ongoing Compliance and Reporting

Waste management licensing is not limited to obtaining an initial business licence.

Operators must continue to comply with the conditions attached to their environmental approvals, technical approvals, and business licences.

For B3 waste management activities, ongoing compliance includes adherence to the applicable technical approval, environmental standards, operational requirements, and reporting obligations. The operator must continue to manage the waste in accordance with the requirements governing its collection, storage, packaging, treatment, utilization, or disposal, as applicable to the licensed activity.

The applicable reporting frequency depends on the particular activity and regulatory requirement.

This ongoing compliance is particularly important for facilities that handle B3 waste because the environmental and technical conditions governing the facility form part of the regulatory basis for its continued operation.

11. Consequences of Operating Without the Required Licences

Waste management activities conducted without the required licences or approvals may result in administrative sanctions and, in certain circumstances, criminal consequences under the applicable environmental framework.

Administrative measures may include written warnings, government coercive measures, administrative fines, suspension of business licences, and revocation of business licences.

The applicable enforcement measure depends on the nature and seriousness of the violation and the provisions governing the particular activity.

For a foreign-owned operator, foreign ownership does not exempt the company from these requirements. Once the company conducts waste management activities in Indonesia, it is subject to the applicable environmental and licensing obligations governing the relevant activity.

12. Key Licensing Considerations for Foreign Waste Management Companies

For a foreign company considering waste management operations in Indonesia, the licensing assessment should begin with the proposed business model and the specific activities to be undertaken.

The company should first determine the appropriate Indonesian legal structure, relevant KBLI classification, type of waste to be handled, and specific activities to be performed. The assessment should then address the proposed facility and location, including spatial conformity and environmental approval, followed by any applicable technical approval, operational feasibility documentation, transportation licensing, and continuing reporting obligations.

The licensing requirements should therefore be assessed as an integrated framework rather than as a single business licence. In particular, obtaining an NIB or establishing a PT PMA does not, by itself, authorize the company to conduct all forms of waste management activity.

Conclusion

A foreign waste management company can establish and conduct waste management activities in Indonesia, subject to the applicable investment, business licensing, environmental, and technical requirements.

For actual commercial operations, the company will generally need an appropriate Indonesian business structure and an NIB through OSS, followed by the relevant business licence for its proposed waste management activities. Additional requirements may include spatial conformity, environmental approval, building approvals, technical approval, operational feasibility documentation, and separate licensing for B3 waste transportation.

The regulatory requirements become particularly specific where the company handles B3 waste. Collection, utilization, treatment, landfilling, and transportation may each involve distinct licensing or technical requirements.

Accordingly, the appropriate approach for a foreign investor is to identify the proposed waste stream, activity, facility, and location first, and then map the applicable licensing requirements before commencing operations in Indonesia.

This article provides a general overview of the regulatory framework applicable to foreign waste management companies operating in Indonesia and is intended for informational purposes only. Specific requirements may vary depending on the type of waste, proposed activity, location, facility, business structure, and applicable regulatory framework.

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