Investment Ministry Revises Three Business Licensing Regulations to Accelerate Investment and Reach 8% Growth Target
Jakarta, CNBC Indonesia - The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) is currently revising three implementing regulations under Government Regulation No. 5 of 2021 on Risk-Based Business Licensing. The revision is expected to accelerate investment realisation and achieve the national economic growth target of 8% by 2029.
Deputy Minister of Investment and Downstreaming/BKPM Todotua Pasaribu explained that the three regulations being revised are BKPM Regulation No. 3 of 2021, which governs the Integrated Electronic Risk-Based Business Licensing System; BKPM Regulation No. 4 of 2021, which specifically governs Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities; and BKPM Regulation No. 5 of 2021, which governs Guidelines and Procedures for Risk-Based Business Licensing Supervision.
"This government has a target of economic growth towards 8%. This is quite an ambitious figure, but also quite realistic if it can be accomplished," said Todotua in a statement quoted on Sunday (6 July 2025).
He compared that during the previous ten years of government, investment realisation reached approximately Rp 9,900 trillion. Meanwhile, the current administration has set a target of 8% economic growth. Consequently, domestic investment over the next five years must reach Rp 13,000 trillion.
"If in the previous 10 years of government, the investment realisation figure was approximately Rp 9,900 trillion, then in the next 5 years to reach the 8% target, we need investment realisation of Rp 13,000 trillion," he explained.
This year's investment target has been raised to Rp 1,900 trillion, up from the 2024 realisation of Rp 1,700 trillion. He noted that investment realisation in Q1 2025 reached Rp 465 trillion, and early reports for the second quarter also show reassuring results.
"The first quarter saw approximately Rp 465 trillion in investment realisation. Then in the second quarter, from Monday onwards my Deputy has been reporting that the figure is relatively safe. And based on what my deputies have conveyed, hopefully the second quarter will remain on track," he said.
Nevertheless, the ministry is anticipating challenges in the third and fourth quarters, as investment realisation is heavily dependent on licensing services. According to Pasaribu, Indonesia lost potential investment of up to Rp 2,000 trillion in 2024 due to various longstanding issues ranging from licensing problems to an unconducive investment climate.
"We found that in 2024, unrealised investment was around Rp 1,500 trillion, possibly reaching Rp 2,000 trillion. Why unrealised? Because of problems such as licensing, an unconducive investment climate, various overlapping policies, and other issues," he said.
**Licensing Reform**
To address these business licensing problems, the Ministry of Investment and Downstreaming, led by Minister Rosan Roeslani, is determined to pursue reform.
"This must indeed be a note and reflection for all of us. And our Ministry of Investment under Minister Rosan Roeslani has a very strong desire to reform this. The President has also always been firm in speaking about reforming the bureaucracy," he explained.
With the revision of these three Ministerial Regulations on Investment, the process of business licensing is expected to become faster and easier.
"Hopefully this will also become a breakthrough in our actions to accelerate, simplify, and particularly provide certainty in business licensing," he said.
Pasaribu noted that there are currently 1,700 types of licences involving approximately 17 ministries and agencies. However, the financial industry has yet to use the Online Single Submission (OSS) system. Therefore, the ministry and the Financial Services Authority (OJK) have agreed that the financial industry should also be integrated into the OSS system.
"Approximately 1-2 weeks ago, we held a meeting with the OJK Chairman and we explained why it is important to consolidate," he said.
According to Pasaribu, the financial industry — including banking, insurance, and others — has not been counted in investment realisation figures to date. He stressed the need for consolidation with OJK into OSS, which has been well received.
"Within 1-2 weeks, we should have an agreement with the financial industry and OJK to bring the financial industry into our OSS system," he concluded.
Deputy Minister of Investment and Downstreaming/BKPM Todotua Pasaribu explained that the three regulations being revised are BKPM Regulation No. 3 of 2021, which governs the Integrated Electronic Risk-Based Business Licensing System; BKPM Regulation No. 4 of 2021, which specifically governs Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities; and BKPM Regulation No. 5 of 2021, which governs Guidelines and Procedures for Risk-Based Business Licensing Supervision.
"This government has a target of economic growth towards 8%. This is quite an ambitious figure, but also quite realistic if it can be accomplished," said Todotua in a statement quoted on Sunday (6 July 2025).
He compared that during the previous ten years of government, investment realisation reached approximately Rp 9,900 trillion. Meanwhile, the current administration has set a target of 8% economic growth. Consequently, domestic investment over the next five years must reach Rp 13,000 trillion.
"If in the previous 10 years of government, the investment realisation figure was approximately Rp 9,900 trillion, then in the next 5 years to reach the 8% target, we need investment realisation of Rp 13,000 trillion," he explained.
This year's investment target has been raised to Rp 1,900 trillion, up from the 2024 realisation of Rp 1,700 trillion. He noted that investment realisation in Q1 2025 reached Rp 465 trillion, and early reports for the second quarter also show reassuring results.
"The first quarter saw approximately Rp 465 trillion in investment realisation. Then in the second quarter, from Monday onwards my Deputy has been reporting that the figure is relatively safe. And based on what my deputies have conveyed, hopefully the second quarter will remain on track," he said.
Nevertheless, the ministry is anticipating challenges in the third and fourth quarters, as investment realisation is heavily dependent on licensing services. According to Pasaribu, Indonesia lost potential investment of up to Rp 2,000 trillion in 2024 due to various longstanding issues ranging from licensing problems to an unconducive investment climate.
"We found that in 2024, unrealised investment was around Rp 1,500 trillion, possibly reaching Rp 2,000 trillion. Why unrealised? Because of problems such as licensing, an unconducive investment climate, various overlapping policies, and other issues," he said.
**Licensing Reform**
To address these business licensing problems, the Ministry of Investment and Downstreaming, led by Minister Rosan Roeslani, is determined to pursue reform.
"This must indeed be a note and reflection for all of us. And our Ministry of Investment under Minister Rosan Roeslani has a very strong desire to reform this. The President has also always been firm in speaking about reforming the bureaucracy," he explained.
With the revision of these three Ministerial Regulations on Investment, the process of business licensing is expected to become faster and easier.
"Hopefully this will also become a breakthrough in our actions to accelerate, simplify, and particularly provide certainty in business licensing," he said.
Pasaribu noted that there are currently 1,700 types of licences involving approximately 17 ministries and agencies. However, the financial industry has yet to use the Online Single Submission (OSS) system. Therefore, the ministry and the Financial Services Authority (OJK) have agreed that the financial industry should also be integrated into the OSS system.
"Approximately 1-2 weeks ago, we held a meeting with the OJK Chairman and we explained why it is important to consolidate," he said.
According to Pasaribu, the financial industry — including banking, insurance, and others — has not been counted in investment realisation figures to date. He stressed the need for consolidation with OJK into OSS, which has been well received.
"Within 1-2 weeks, we should have an agreement with the financial industry and OJK to bring the financial industry into our OSS system," he concluded.