Indonesia Implements Risk-Based Licensing to Boost Investment Climate

Automated Licensing System Introduces Significant Reforms

Indonesia has taken a major step in improving its investment climate with the introduction of Government Regulation (PP) No. 28/2025 on Risk-Based Business Licensing. The new regulation, announced by Investment Minister and Head of BKPM Rosan Roeslani, aims to enhance investment certainty through an integrated and automated licensing system.

Key Features of the New Regulation

1. Single Window System: All investment licenses will be processed through the BKPM system, creating a centralized platform for investment approvals.
2. Automatic License Issuance: The regulation introduces a 'positive fictitious' mechanism where investment licenses are automatically issued if the relevant technical ministries fail to respond within the specified Service Level Agreement (SLA) timelines.
3. Improved Certainty: The system provides clear timelines for license processing, reducing uncertainty for investors.

Implementation and Reception

The new policy has been well-received by both domestic and international investors, according to Rosan Roeslani. The streamlined process is expected to significantly reduce bureaucratic delays and improve Indonesia's competitiveness in attracting foreign investment. The regulation demonstrates the government's commitment to creating a more favorable business environment through digitalization and process optimization.

Impact on Investment Climate

The introduction of this regulation marks a significant shift in Indonesia's approach to investment management. By reducing bureaucratic hurdles and providing clearer timelines, the government aims to attract more substantial foreign investment and stimulate domestic business growth. The success of this initiative will depend on effective implementation and monitoring of the new system.