Feasibility Study
Feasibility studies are crucial for data-driven, risk-mitigated, and financially viable business decisions. They analyze economic, financial, market, technical, legal, and environmental factors, ensuring that investments are strategically sound and sustainable.
A well-executed feasibility study aligns with the Business Judgment Rule (BJR), protecting decision-makers when choices are made in good faith with reliable data. Conducted by an authorized Business Appraiser, feasibility studies provide measurable insights that strengthen corporate governance and minimize legal risks.
In many cases, feasibility studies are legally required, especially for State-Owned Enterprises (BUMN), Regional-Owned Enterprises (BUMD), and Public-Private Partnerships (PPP). These regulations help safeguard financial stability, transparency, and compliance, ensuring that business expansion and investments serve long-term strategic goals.
Regulatory Requirements for Feasibility Studies
1. State-Owned Enterprises (BUMN)
Under Article 62M of Law No. 1 of 2025, feasibility studies are required for BUMN expansion, particularly before forming subsidiaries. These studies evaluate profitability, sustainability, and operational impact, ensuring risks are minimized before investment.
They also reinforce Good Corporate Governance (GCG) by promoting transparency and accountability, ensuring that BUMN investments align with national economic priorities and support long-term financial stability.
2. Regional-Owned Enterprises (BUMD)
Ministerial Regulation No. 118 of 2018 requires BUMD to conduct feasibility studies before engaging in external partnerships. These studies assess financial feasibility, business risks, and alignment with regional development objectives.
By ensuring that business ventures are strategically and financially sound, feasibility studies protect regional finances while fostering local economic growth.
3. Public-Private Partnerships (PPP)
For PPP projects, Government Regulation No. 38 of 2015 mandates feasibility studies before project approval. These studies assess investment viability, revenue potential, and socio-economic impact, ensuring that projects attract private investment while maintaining financial sustainability.
They also identify and mitigate risks, including regulatory challenges and market volatility, helping optimize public-private collaboration for long-term infrastructure and service improvements.
The Role of Public Appraisers
In Indonesia, feasibility studies must be conducted by Public Appraisers, professionals regulated under Law No. 4 of 2023 and Ministerial Regulation No. 101/PMK.01/2014.
Only Business Appraisers are authorized to conduct business feasibility studies. Property Appraisers are restricted to real estate feasibility assessments, while Simple and Personal Property Appraisers are not permitted to perform business evaluations.
To ensure regulatory compliance, financial accuracy, and legal recognition, feasibility studies must be performed by licensed Business Appraisers with expertise in financial and strategic business assessments.
FIBA Firm: Your Feasibility Study Experts
At FIBA Firm, we specialize in comprehensive, data-driven feasibility studies, equipping businesses, government agencies, and investors with strategic insights for informed decision-making. Our expertise covers financial, market, legal, operational, and environmental assessments, ensuring projects are viable, sustainable, and fully regulatory-compliant.
We support State-Owned Enterprises (BUMN), Regional-Owned Enterprises (BUMD), Private Corporations, and Government Projects, guiding them through investment planning, risk management, and regulatory compliance. Our expertise in Law No. 1/2025, Government Regulation No. 38/2015, and Ministerial Regulation No. 118/2018 ensures a smooth, hassle-free approval process.
As an independent and trusted firm, our feasibility studies are legally recognized and relied upon by investors and regulators. We have a proven track record of guiding corporations and government agencies through complex feasibility evaluations, ensuring that every decision is financially sound, strategically aligned, and future-proof.
At FIBA Firm, we are dedicated to delivering expertise, risk mitigation, and regulatory compliance, ensuring that every investment and business expansion is structured for long-term success.
