Indonesia Still Faces Investment Permit Hurdles Amid Competition with Vietnam and Malaysia

Indonesia continues to face challenges in attracting global investment as it competes with Vietnam and Malaysia for foreign capital. Industry stakeholders identify permitting processes, policy synchronisation, and on-ground procedural certainty as key obstacles. These issues were discussed during a meeting between the Indonesian Industrial Zone Association (HKI) and the Presidential Staff Office (KSP). Despite the country’s large domestic market, downstreaming agenda, and strategic position in global supply chains, investors remain concerned about execution speed, policy alignment, and time certainty in investment processes. ‘Investor interest in Indonesia remains high, but they are concerned about making the process faster, more synchronised, and with clear timeframes,’ said Ma’ruf during the meeting. HKI raised strategic issues including National Strategic Projects (PSN), Special Economic Zones (KEK), Land Use Activity Compliance (KKPR), and electricity supply business development. Ma’ruf stressed that resolving these issues requires stronger inter-ministerial coordination to expedite solutions and provide investor certainty. ‘Investment competition is now between countries, not just regions. Investors compare Indonesia with Vietnam, Malaysia, and others, making legal certainty, timely decisions, and speed critical for national competitiveness,’ he added.