Indonesia Lost Potential Rp1.5 Quadrillion Investment Due to Cumbersome Licensing Process

Jakarta — Deputy Minister of Investment and Downstream Industry/Deputy Head of the Investment Coordinating Board (BKPM), Todotua Pasaribu, has revealed that Indonesia previously lost potential investment worth Rp1.5 quadrillion. One of the primary causes of this unrealised investment was the layered business licensing process that existed in the past.

Todotua explained that the majority of corporations that processed business permits through the One Single Submission (OSS) system stalled at stages such as obtaining a Business Identification Number (NIB) and the Standard Indonesian Business Field Classification (KBLI). However, numerous additional stages remained before companies could obtain operational permits.

“Investment commitments are made, but their realisation reports show they haven’t happened because they haven’t been executed. And one factor contributing to this is the licensing services sector,” Todotua stated at the Investment Ministry/BKPM office in Jakarta on Thursday, 26 February 2026.

He cited Vietnam as an example of a country with progressive industrial growth and investment, bolstered by the ease of obtaining business permits.

The process of obtaining business licences was made unnecessarily layered and protracted, whereas streamlining procedures allows investment flows to move more smoothly into newly formed enterprises.

“When discussing investment, one parameter we always use for head-to-head comparison is investment, and that comparison is with Vietnam,” he said.

According to Trading Economics data, foreign direct investment (FDI) in Vietnam grew 9.0 per cent year-on-year to $27.62 billion in 2025, marking the highest level recorded over the past five years.