Complex Licensing Procedures Cause Indonesian Investment to Lag Behind Vietnam
KONTAN.CO.ID – JAKARTA. Complicated business licensing processes are causing investment flows into Indonesia to be less competitive compared to Vietnam.
Deputy Minister of Investment and Downstreaming/Deputy Head of the Investment Coordinating Board (BKPM) Todotua Pasaribu stated that, in terms of investment, Vietnam is often used as a direct point of comparison.
Investment in Vietnam is considered to be in line with its economic growth, which has been able to grow rapidly, even reaching 8.02% in 2025. From this condition, Indonesia is using it as a role model.
“From this role model, we also see that in our country, the investment cycle is still relatively long,” said Todotua during the Socialization of the Adjustment of Government Regulation No. 28 of 2025 on the OSS System, Thursday (February 26, 2026).
This can be seen from various data received since the beginning of his assignment in this ministry. Todotua said that he saw data from the Online Single Submission (OSS) platform which showed that the consolidated value of unrealized investment reached around IDR 1,500 trillion.
This value comes from companies that already have a Business Identification Number (NIB), Indonesian Standard Industrial Classification (KBLI), and investment commitments, but have not reported their realization because the projects have not been executed.
“And one of the contributions given is in what is called the service sector. Therefore, the Ministry of Investment truly understands how important it is for us to improve this,” he said.
To ensure that business licensing processes are not complicated, the government issued Government Regulation No. 28 of 2025 concerning the Implementation of Risk-Based Business Licensing, which officially replaces Government Regulation No. 5 of 2021 to simplify permits, accelerate investment, and limit new nickel smelters. Effective from October 2025, this regulation streamlines procedures and strengthens the OSS system.
He explained that the birth of PP 28 is part of licensing reform, which includes the concept of fictitious-positive. This policy is one of the stages to carry out improvements, because without improvement, the speed of investment realization cannot be expected to run well, so this issue must receive special attention.
PP 28 also regulates service level agreements, which provide certainty for the business world. Certainty is considered a major need in business activities.
Todotua noted that of the approximately 372 types of permits with approximately 1,700 KBLI, about 180 of them have been included in the fictitious-positive scheme based on service level agreements. For example, permits in the hotel sector are targeted to provide certainty of issuance within 28 days so that business actors can immediately realize their investment.
According to him, this time certainty is important because there are types of businesses that have a short business cycle, so if the permits take too long to issue, business trends can change before the investment is realized. This condition often occurs and is the reason for the need for licensing reform through PP 28.
Interesting to Read: Eid Promo Pelni Tickets: 30% Discount Makes Homecoming More Affordable, Check the Terms and Conditions
Check out other News and Articles on Google News