What is BKPM Indonesia: It’s Role for Foreign Direct Investment

Indonesia, a land of abundant natural resources and a growing economy, has been a hotspot for foreign investment. One of the pivotal entities responsible for promoting and facilitating these investments is the Indonesia Investment Coordinating Board (BKPM).

In this article, we’ll delve into the significance and functions of BKPM, highlighting its role in making Indonesia an attractive destination for investors.

Also read: Investing in Indonesia: Great Opportunity for Global Investors

What is BKPM in Indonesia?

BKPM, an acronym for Badan Koordinasi Penanaman Modal, is the Indonesian Investment Coordinating Board. Established in 1973, it operates as a government agency tasked with coordinating investment policies and services within Indonesia. At present, BKPM is under the able leadership of Bahlil Lahadalia.

BKPM’s Commitment to Investment Climate

BKPM is on a mission to enhance Indonesia’s appeal as an investment destination. Over the years, it has undertaken several strategic initiatives aimed at improving the investment environment:

1. Streamlining Approval Processes: BKPM has worked diligently to streamline the often complex investment approval process, making it more efficient for investors.
2. Reducing Permit Requirements: To encourage investments, BKPM has reduced the number of permits and licenses required, cutting through bureaucratic red tape.
3. Improving the Investment Environment: Through various reforms and measures, BKPM has taken steps to create a more favorable investment environment.

The efforts of BKPM have yielded remarkable results, as evidenced by the record-breaking $310 billion in foreign direct investment that Indonesia received in 2022.

Also read: Where to Invest in Indonesia: 7 Best Cities and Locations

Main Functions of BKPM

BKPM’s core functions encompass a range of activities aimed at fostering investment growth and prosperity:

1. Coordinating Policies

   BKPM acts as a bridge between the government and the private sector, ensuring that investment policies and strategies are effectively communicated and implemented.

2. Investor Support

   It provides invaluable information and assistance to investors, helping them navigate the intricacies of the Indonesian investment landscape.

3. Facilitating Approvals

   Streamlining the investment approval process is a priority, with BKPM working diligently to simplify procedures for investors.

4. Performance Evaluation

   BKPM also takes on the role of monitoring and evaluating investment performance, ensuring that investments align with Indonesia’s goals.

Also read: 10 Reasons Why You Should Invest in Indonesia

Services Provided by BKPM

For investors looking to explore opportunities in Indonesia, BKPM offers an array of services:

1. Investment Counseling

   BKPM provides expert advice and counseling to help investors make informed decisions.

2. Permit Assistance

   It assists investors in obtaining the necessary permits and licenses, cutting through bureaucratic hurdles.

3. Information Hub

   BKPM serves as a valuable source of information on investment opportunities in Indonesia.

4. Matchmaking Services

   To facilitate business partnerships, BKPM offers matchmaking services to connect investors with potential business partners.

Also read: What to Invest in Indonesia: 7 Best Sectors for Foreigner

BKPM Guide for Foreign Direct Investment in Indonesia

Navigating the regulatory landscape for foreign direct investment (FDI) in Indonesia can be complex. BKPM has issued various regulations and guidelines to simplify the process and make it more investor-friendly. Here’s a brief overview of some key aspects:

• Negative Investment List (DNI)

  The DNI or Negative Investment List is a critical component of FDI regulation in Indonesia. It lists business sectors that are either closed to foreign investment or subject to specific restrictions. It is crucial for investors to stay updated on DNI changes, which are periodically revised by the government.

• Business License

  Irrespective of the nature of the business, all entities operating in Indonesia, including FDI companies, are required to obtain a business license. The process has been made more accessible through BKPM’s Online Single Submission (OSS) system.

  For a simpler registration process, you can also check our services for Indonesia Business License Application.

  Chat with us for FREE consultation about Indonesian Business Licenses

• Principle License

  The Principle License, while non-binding, signifies the government’s support for a particular FDI project. It expedites the approval process and offers certain investment incentives.

• Sector-Specific Permits and Licenses

  Depending on the industry, some businesses may need additional permits from other government bodies. For instance, companies involved in mining or energy may require permits from the Ministry of Energy and Mineral Resources.

  For a simpler registration process, you can also check our services for Indonesia Licenses and Permits Application.

Chat with us for FREE consultation about Indonesian Specific Licenses and Permits

BKPM’s OSS system has significantly simplified the process for foreign investors. It allows electronic submission of required documents and offers a centralized platform for tracking application status. Furthermore, BKPM extends various incentives, including tax breaks and import duty exemptions, to attract and promote investment in specific industries.

Foreign investors keen on investing in Indonesia should engage with BKPM or qualified investment advisors to gain a comprehensive understanding of the licensing and permitting process, as well as the available incentives.

InvestinAsia is among the companies that specialize in aiding you to setting up a company in Indonesia. We boast a team of seasoned experts who can guide you throughout the process of:

• PMA / foreign company registration in Indonesia
• Indonesia representative office setup
• Virtual office rent in Indonesia
• Business registration number in Indonesia

In addition to that, we can also assist you with the Indonesia Investor Visa / KITAS Application.

So, if you are interested in starting an investment journey in Indonesia, you can start by contacting us for FREE consultation.

In conclusion, the Indonesia Investment Coordinating Board (BKPM) plays a pivotal role in promoting and facilitating foreign investment in Indonesia. Through its efforts to streamline processes, reduce bureaucratic hurdles, and offer incentives, BKPM has contributed significantly to making Indonesia an attractive investment destination. As Indonesia continues its economic growth trajectory, BKPM remains a key partner for investors seeking opportunities in this dynamic nation.