Commercial building owners in Indonesia face a different licensing landscape since the enactment of the Job Creation Law (UU Cipta Kerja) and its derivatives, Government Regulation No. 16 of 2021 concerning the Implementation of the Building Law. The Building Permit (IMB), which was previously a primary requirement, is now replaced by the Building Construction Approval (PBG). This change is not merely a name replacement: the application mechanism, required documents, and the position of the permit in the Risk-Based Business Licensing flow have also changed.
PBG is a permit granted by local or central government to building owners to construct new buildings, modify, expand, reduce, or maintain buildings in accordance with applicable technical standards. SLF is a certificate that states the functional feasibility of a building before it is utilized. The two are paired but operate at two different points in time.
Difference between PBG and SLF: before construction and before use
The simplest way to distinguish them is through the sequence of time. PBG is processed before construction begins, and it contains approval of the technical plan. SLF is processed after the building is completed, and it contains a statement that the building is fit for use. One assesses the plan, while the other assesses the reality.
Another often-overlooked difference: PBG is a one-time requirement for a single construction project, while SLF has a validity period and needs to be renewed periodically. The validity period and renewal procedures are discussed separately in the article validity and renewal of SLF.
PBG is not just a replacement for IMB
Substantively, IMB assesses whether a building can be constructed. PBG assesses whether the technical plan meets the standards. Consequently, the required documents are more technical: land data, architectural plans, structural plans, as well as mechanical and electrical plans. Owners accustomed to the old pattern are often surprised at this point, as documents that used to require only a signature now need to be thoroughly calculated.
Buildings that have already been constructed without a PBG do not automatically lose their options. The pathway is through SLF, and this obligation applies to every building owner without exception.
How to process it through SIMBG
Since Government Regulation 16/2021, applications for PBG and SLF are no longer served manually at counters. Everything is submitted online through the Building Management Information System at simbg.pu.go.id. This same system also issues the Building Ownership Evidence Letter and technical plan approvals.
The process works as follows. Applicants create an account, fill in personal data, building data, building function, and land data, then upload technical documents. The application enters the technical consultation stage, which includes document verification, site review, and volume calculation. Once verification is approved, SIMBG issues a Retribution Determination Letter, and the retribution must be paid into the official local government account before the permit is issued.
Regarding time, there are two figures that need to be distinguished. Normatively, technical consultations are processed within 3 to 27 working days if the documents are complete and correct, and the issuance of PBG is targeted to be completed within a maximum of 28 working days from the receipt of the application. In practice, these figures depend on the queue for hearings at the relevant service. For SLF, issuance is done within a maximum of three working days from the functional feasibility statement being uploaded to SIMBG.
The difference between the normative targets and the reality of the queue is what usually disrupts project schedules, not the technical process itself.
Sanctions for neglect
The sanctions are administrative and tiered, not directly criminal. The sequence starts from a written warning, then restrictions on construction or utilization activities, temporary operational cessation, permit revocation, to building demolition. There are also administrative fines calculated as a percentage of the building's value.
Criminal charges only come into play when there are victims. If the negligence of the owner or user of the building results in property damage to others, the penalty is imprisonment for a maximum of three years or a fine of up to 10 percent of the building's value. If it causes accidents resulting in disability or loss of life, the penalty increases to a maximum of five years and a fine of up to 20 percent.
For commercial building owners, the risk that is often felt is not the fines, but rather the operational cessation. A single temporary cessation letter can halt the income of the entire building while fixed costs continue to accrue.
Its position in business licensing, after PP 28/2025
The context surrounding PBG and SLF changed again on June 5, 2025, when the government issued Government Regulation No. 28 of 2025 concerning the Implementation of Risk-Based Business Licensing, replacing Government Regulation No. 5 of 2021. The legal basis for building construction itself remains Government Regulation 16/2021, so do not confuse them. What has changed is the framework of business licensing where PBG and SLF reside.
Two changes are most felt by building owners. First, the principle of positive fictitious: if an application exceeds the standard service time without a decision, the permit is legally considered approved. Second, environmental approvals are now fully integrated into the OSS system, and environmental approvals and technical approvals can be submitted in parallel, no longer sequentially as in the previous regime.
For projects racing against deadlines, this second change is the most significant. It cuts down the waiting time that previously could only be endured.
Conclusion
PBG and SLF are often treated as administrative matters that can be pursued later. However, both are tied to two moments that cannot be postponed: before pouring concrete, and before opening doors. Understanding the differences from the outset is usually cheaper than managing a building that has already been constructed.
Sources
- Government of the Republic of Indonesia – Government Regulation No. 16 of 2021 concerning the Implementation of Law No. 28 of 2002 concerning Buildings → peraturan.go.id
- Ministry of Public Works of the Republic of Indonesia – SIMBG Licensing Portal: implementation of PBG and SLF → perizinan.pu.go.id
- Hukumonline – Understanding PBG and Sanctions If Buildings Do Not Have It → hukumonline.com
- JDIH Financial Audit Agency of the Republic of Indonesia – Government Regulation No. 28 of 2025 concerning the Implementation of Risk-Based Business Licensing → peraturan.bpk.go.id
- Ministry of Investment/BKPM of the Republic of Indonesia – Risk-Based Business Licensing through OSS → oss.go.id