Government Implements Positive Fictitious Mechanism to Accelerate Investment Permits

The Indonesian government is taking firm steps to simplify bureaucracy in order to attract foreign investors. This strategy includes accelerating the permitting process, which has long been a complaint from global business players, particularly from South Korea.

Minister of Investment and Downstreaming/Head of BKPM and CEO of Danantara, Rosan Roeslani, has guaranteed legal certainty for foreign investors. This statement came after a meeting between the President and leaders of major South Korean companies in Seoul.

Quoted from Investortrust, Rosan Roeslani acknowledged that several entrepreneurs raised administrative obstacles in certain technical ministries. The lengthy processes were seen as disrupting the investment climate in the country.

“There were indeed inputs regarding other ministries where the process might be a bit long. In line with the President’s directives, this must be accelerated. We at BKPM continue to coordinate through the debottlenecking task force to resolve those obstacles,” said Rosan.

To address this bureaucratic bottleneck, the government is relying on Government Regulation (PP) No. 28 of 2026 on Business Licensing. This regulation serves as the legal basis for implementing the positive fictitious mechanism in Indonesia’s permitting system.

Through the positive fictitious rule, permit applications will be deemed automatically approved if the relevant agencies do not respond within the specified time limit. This step is designed to cut down on the uncertainties that often haunt foreign investors.

“If the promised time is not met by the relevant ministry, then we from the Ministry of Investment can issue the permit directly or automatically. This is what we call positive fictitious,” Rosan emphasised.

Rosan explained that international investors are essentially capable of managing business risks as long as the risk parameters can be clearly calculated. However, uncertainty in bureaucratic procedures is the thing they most avoid when investing capital.

“What we’re trying to reduce is uncertainty. They (investors) say that risk is okay as long as it can be measured, but uncertainty is what’s difficult. With this policy, we provide certainty in time and law,” Rosan stated.