BKPM pursues licensing simplification to accelerate Indonesia's investment cycle
Jakarta (ANTARA) - The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) is pursuing licensing simplification to accelerate the investment realisation cycle in Indonesia.
Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM Todotua Pasaribu said during MINDialogue in Jakarta on Wednesday that although investment realisation in the country shows a positive trend, several challenges need to be addressed, particularly regarding the investment cycle.
He said the ministry continues to carry out licensing reform by implementing a positive fictitious scheme through Government Regulation No. 28 of 2025. The policy provides time certainty for business actors to obtain permits, allowing the construction process to proceed more quickly.
“So far we know that in our country, people can only start a business after waiting for their permits to be completed. This is what causes our investment cycle in this country to average around 4.5 to 5 years,” he said.
According to Todotua, the reform aims to remove investment barriers so that the licensing process can run in parallel with construction, especially for sectors with fast business cycles.
He noted that of the approximately 560 types of businesses in Indonesia, 287 have adopted the positive fictitious mechanism.
Todotua added that the government still has homework to expand the application of the reform to other business types.
He also explained that the government has set an investment realisation target of Rp13,000 trillion as a strategy to support achieving 8 percent economic growth.
The figure is higher than investment realisation during the previous two periods, which was around Rp9,600 trillion.
“The government has now stated that we will talk about economic growth heading towards 8 percent, where one of the main contributions to economic growth is investment realisation,” said Todotua.
According to him, investment plays an important role in the structure of national economic growth. His ministry notes that investment’s contribution to economic growth has increased from around 26-27 percent to around 30 percent.
Todotua explained that in 2025, investment realisation managed to exceed the target of around Rp1,950 trillion by approximately 3 percent. Meanwhile, in the first half of 2026, investment realisation has reached around Rp1,000 trillion.
In addition to driving economic growth, investment realisation also impacts job creation. The government is targeting the creation of around 2.5 million new workers, with first-half 2026 achievement reaching around 1.456 million new workers.