Indonesia's Investment Climate Loses Out to Vietnam Due to Licensing Difficulties, Says BKPM Official
JAKARTA — Deputy for Investment Planning at the Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) Dedi Latip has revealed the reasons why Indonesia's investment performance lags behind Vietnam's, citing easier licensing processes and fewer on-the-ground obstacles in the rival nation.
"When we look at licensing, it turns out it is indeed easier in Vietnam. Problems? There aren't too many over there," said Dedi at the Iron Steel Summit and Exhibition Indonesia 2025 in Jakarta on Wednesday (21/5/2025).
"That's a challenge for us. Our question is: where exactly are the licensing bottlenecks? Licensing reform must be comprehensive," he continued.
Dedi noted that Indonesia already has the Online Single Submission (OSS) system to support investment licensing. However, there are also numerous technical investment requirements across various ministries.
Despite the current investment climate, Dedi said investors are still willing to invest in Indonesia, though they are also eyeing the possibility of shifting to Vietnam.
Nevertheless, Dedi stressed that Indonesia's investment position is not dramatically behind Vietnam's. The country simply needs to make more significant improvements.
"We need to be more energetic and make more concerted efforts to attract investors, similar to what Vietnam and other countries are doing," said Dedi. "If licensing is proving to be an obstacle, then we must fix it," he added.
Previously, National Economic Council (DEN) Chairman Luhut Binsar Pandjaitan stated that Indonesia still trails several Southeast Asian nations regarding regulations that support business readiness, including Singapore, Vietnam and the Philippines.
Indonesia also lags in terms of foreign company registration for investment purposes.
"Currently, based on a World Bank report, Indonesia still trails behind Singapore, Vietnam and the Philippines in business readiness regulation," said Luhut, as posted on his official Instagram account @luhut.pandjaitan on Wednesday (26/3/2025).
"The time required to register a foreign company in Indonesia takes up to 65 days, compared to the world's best standard of just a few days," he explained.
Furthermore, business dispute resolution in Indonesian courts can take up to 150 days, while 86 per cent of business operators still regard regulation as the primary obstacle.
Luhut said solutions must be found for all these issues. "President Prabowo has issued direct instructions for deregulation of inappropriate rules that burden business operators," he said.
"When we look at licensing, it turns out it is indeed easier in Vietnam. Problems? There aren't too many over there," said Dedi at the Iron Steel Summit and Exhibition Indonesia 2025 in Jakarta on Wednesday (21/5/2025).
"That's a challenge for us. Our question is: where exactly are the licensing bottlenecks? Licensing reform must be comprehensive," he continued.
Dedi noted that Indonesia already has the Online Single Submission (OSS) system to support investment licensing. However, there are also numerous technical investment requirements across various ministries.
Despite the current investment climate, Dedi said investors are still willing to invest in Indonesia, though they are also eyeing the possibility of shifting to Vietnam.
Nevertheless, Dedi stressed that Indonesia's investment position is not dramatically behind Vietnam's. The country simply needs to make more significant improvements.
"We need to be more energetic and make more concerted efforts to attract investors, similar to what Vietnam and other countries are doing," said Dedi. "If licensing is proving to be an obstacle, then we must fix it," he added.
Previously, National Economic Council (DEN) Chairman Luhut Binsar Pandjaitan stated that Indonesia still trails several Southeast Asian nations regarding regulations that support business readiness, including Singapore, Vietnam and the Philippines.
Indonesia also lags in terms of foreign company registration for investment purposes.
"Currently, based on a World Bank report, Indonesia still trails behind Singapore, Vietnam and the Philippines in business readiness regulation," said Luhut, as posted on his official Instagram account @luhut.pandjaitan on Wednesday (26/3/2025).
"The time required to register a foreign company in Indonesia takes up to 65 days, compared to the world's best standard of just a few days," he explained.
Furthermore, business dispute resolution in Indonesian courts can take up to 150 days, while 86 per cent of business operators still regard regulation as the primary obstacle.
Luhut said solutions must be found for all these issues. "President Prabowo has issued direct instructions for deregulation of inappropriate rules that burden business operators," he said.