BKPM Simplifies Licensing to Accelerate Investment Realisation
The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) continues to simplify the licensing process to accelerate the investment cycle in Indonesia.
Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM Todotua Pasaribu said that although national investment realisation shows a positive trend, a number of challenges still need to be addressed, particularly regarding the length of the investment cycle.
Todotua explained that the government is carrying out licensing reform by implementing a positive fictitious mechanism based on Government Regulation Number 28 of 2025. The scheme provides time certainty for business actors in obtaining permits so that the construction process can proceed more quickly.
“So far we know that in our country, people can only start running a business after waiting for their permit to be completed. This is what causes our investment cycle in this country to average around 4.5 to 5 years,” he said, as quoted from Antara on Wednesday (12/8/2026).
According to Todotua, the reform is directed at reducing investment barriers by allowing the licensing process to run in parallel with construction, especially in sectors with relatively fast business cycles.
Of the approximately 560 types of businesses in Indonesia, 287 types have implemented the positive fictitious mechanism. The government is still working to expand the application of the mechanism to other business types.
On the other hand, the government is targeting investment realisation of Rp 13,000 trillion as one of the strategies to support the 8% economic growth target. This target is higher than the investment realisation in the two previous periods, which was in the range of Rp 9,600 trillion.
“The government has now stated that we will be talking about economic growth towards 8%, 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. The contribution of investment to economic growth is currently recorded to have increased from around 26%-27% to around 30%.
Todotua said investment realisation in 2025 reached around Rp 1,950 trillion, or about 3% above the set target. Meanwhile, investment realisation in the first half of 2026 has reached around Rp 1,000 trillion.
In addition to driving economic growth, investment also contributes to job creation. The government is targeting the creation of around 2.5 million new jobs, with realisation in the first half of 2026 reaching around 1.456 million new workers.