Indonesia Lost Up to Rp2,000 Trillion in Potential Investment Due to Complex Licensing
JAKARTA - The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) has recorded that Indonesia lost up to Rp2,000 trillion in potential incoming investment.
Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM Todotua Pasaribu stated that Indonesia missed out on investment opportunities due to complicated licensing processes.
"We found that in 2024, realised investment stood at around Rp1,500 trillion, with unrealised investment possibly reaching Rp2,000 trillion," said Todotua, as reported by Antara on Saturday (5/7/2025).
He said the lost investment opportunities were partly caused by complex investment licensing and an unconducive business climate in Indonesia. Additionally, investment-related policies were considered to still overlap, creating confusion.
"Because of issues like these — licensing, an unconducive investment climate, various overlapping policies and others — this certainly must serve as a note and reflection for all of us," he said.
In response, the government issued Government Regulation (PP) Number 28 of 2025 on Risk-Based Business Licensing. This regulation integrates BKPM Regulations 3/4/5 of 2021, which comprise the OSS System, Licensing Services, and Supervision.
He also noted that BKPM had proposed to the Coordinating Ministry for Economic Affairs to grant licences to investors wishing to invest in designated zones, industrial estates, Special Economic Zones (KEK), and free trade zones.
According to him, licensing requirements must still be complied with, but this can be done through post-audit processes.
"If the investor is ready, we at the Ministry of Investment will issue the licence, and the rest will be subject to post-audit. Because once someone has invested, they're not going to run away. We shouldn't make them wait until all permits are completed," he added.
Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM Todotua Pasaribu stated that Indonesia missed out on investment opportunities due to complicated licensing processes.
"We found that in 2024, realised investment stood at around Rp1,500 trillion, with unrealised investment possibly reaching Rp2,000 trillion," said Todotua, as reported by Antara on Saturday (5/7/2025).
He said the lost investment opportunities were partly caused by complex investment licensing and an unconducive business climate in Indonesia. Additionally, investment-related policies were considered to still overlap, creating confusion.
"Because of issues like these — licensing, an unconducive investment climate, various overlapping policies and others — this certainly must serve as a note and reflection for all of us," he said.
In response, the government issued Government Regulation (PP) Number 28 of 2025 on Risk-Based Business Licensing. This regulation integrates BKPM Regulations 3/4/5 of 2021, which comprise the OSS System, Licensing Services, and Supervision.
He also noted that BKPM had proposed to the Coordinating Ministry for Economic Affairs to grant licences to investors wishing to invest in designated zones, industrial estates, Special Economic Zones (KEK), and free trade zones.
According to him, licensing requirements must still be complied with, but this can be done through post-audit processes.
"If the investor is ready, we at the Ministry of Investment will issue the licence, and the rest will be subject to post-audit. Because once someone has invested, they're not going to run away. We shouldn't make them wait until all permits are completed," he added.