Investment in Indonesia: 59 Investors Used BKPM's 3-Hour Licensing Service
According to the Indonesia Investment Coordinating Board (BKPM), the government agency that provides investment services and forms the primary interface between the Indonesian government and businesses, it has assisted 59 companies through the three-hour licensing service that was started on 11 January 2016. Originally, this service was only available to big investors who either invest at least IDR 100 billion (approx. USD $7.5 million) or generate 1,000 new job positions for Indonesian workers. However, a Presidential Instruction also opened this special service to investment in four infrastructure-related sectors.
These sectors are: energy and mineral resources, communication, public works, and communication & information.
BKPM Chairman Franky Sibarani said the 59 companies that have managed to realize their investment plans through the three-hour permit service generated a total of 44,000 jobs up to 1 June 2016 and it involved a total of IDR 137.5 trillion (approx. USD $10.3 billion) of investment. The largest foreign investor among these 59 companies is China, the world's second-largest economy. Six Chinese companies invested a combined IDR 40.6 trillion (approx. USD $3.1 million) in Indonesia.
In terms of job generation, the British Virgin Islands were ranked on the top spot. Total investment from this British overseas territory located in the Caribbean generated 12,000 new job positions, followed by China (5,981), Hong Kong (4,450) and the United Kingdom (2,700). Based on the recently leaked data from Mossack Fonseca (the so-called - and highly controversial - "Panama Papers"), the British Virgin Islands are one of the two most popular tax havens used by Mossack Fonseca on behalf of its clients.
Top Countries Investing in Indonesia through 3-Hour Service System:
| Country | Investment in IDR trillion |
Number of Companies |
| China | 40.64 | 6 |
| Malaysia | 35.69 | 2 |
| Singapore | 23.16 | 12 |
| Indonesia | 7.73 | 4 |
January-May 2016 period
Source: BKPM
The three-hour investment service system that was introduced on 11 January 2016 aims to speed up the investment process for investors. In three hours eight licensing procedures should be completed (after investors have delivered all required paperwork). These procedures involve the investment permits, the tax number (NPWP), a deed of the business establishment, a decree from the Ministry of Justice and Human Rights, a certificate of company registration, the permit to employ foreign workers, an importing producer identification number, and a customs identification number.
Foreign direct investment (FDI) into Indonesia reached USD $29.27 billion in 2015, up slightly from USD $28.53 billion one year earlier.