Indonesia Must Emulate Vietnam to Unlock IDR 1.5 Quadrillion in Lost Investment Potential
JAKARTA – The Ministry of Investment/BKPM has revealed that Indonesia has lost potential investment opportunities worth IDR 1.5 quadrillion. One of the main reasons for this unrealised investment is the complex and multi-layered business licensing process in the past.
BKPM stated that many corporations that applied for business licenses through the Online Single Submission (OSS) system only reached the stage of obtaining a Business Identification Number (NIB) and the Indonesian Standard Industrial Classification (KBLI). However, there are still further stages that must be completed to obtain an operational license.
BKPM believes that simplifying the licensing process is necessary to ensure that investment potential can be realised optimally.
“Investment commitments are in place, but the realisation reports are lacking because the investments have not yet been executed. One of the contributing factors is the business licensing service sector,” said Deputy Minister of Investment and Downstreaming/BKPM, Todotua Pasaribu, at the BKPM office in Jakarta, Thursday (26/2/2026).
He then cited Vietnam as an example of a country whose industrial and investment growth has been progressive due to the ease of obtaining business licenses. The stages of the business licensing process have been made simple and streamlined, so that the flow of investment to the businesses being established can flow easily.
“When talking about investment, one of the parameters we always use for comparison is Vietnam,” he said.
According to Trading Economics data, foreign direct investment (FDI) in Vietnam grew 9.0 percent year-on-year to USD 27.62 billion in 2025. This achievement is the highest level recorded in the last five years.
Todotua emphasised that the business licensing process in Vietnam is much simpler and faster compared to Indonesia. This also affects how quickly and how much investment flows in.
“In Vietnam, the investment cycle may be the construction period itself. Meanwhile, in our country, to be honest, the investment cycle is still relatively long, perhaps 4-5 years, because one of the contributing factors is the business licensing service, which makes it difficult to execute investments quickly,” he said.