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This is a Literature Review study.

August 17, 2025

Licensing Aspects to Attract Foreign Investment in Law Number 11 of 2020 Concerning Job Creation

Key Points

The implementation of the Job Creation Act facilitates foreign direct investment by reforming licensing regulations, enhancing investment opportunities in Indonesia.
Obstacles such as complicated bureaucracy have historically deterred foreign investors, leading to the introduction of the Job Creation Act to streamline processes.
Normative juridical analysis based on primary, secondary, and tertiary legal materials demonstrates the impact of legislation on investment attractiveness.
The reforms under the Job Creation Act aim to simplify licensing regulations, which could significantly boost economic activity and attract more foreign investors.

Abstract

Foreign Direct Investment as part of economic activity that plays an important role in the life of the nation has encountered obstacles in its implementation practice, especially related to licensing regulations. Licensing bureaucracy which is considered complicated is one of the reasons why (foreign) investors are reluctant to invest in Indonesia. With these problems, the government issued the Job Creation Act as one of the solutions. This study seeks to discuss the application of the Job Creation Act to resolve licensing regulatory issues and their implications for foreign investment. The method used is normative juridical with sources on primary, secondary, and tertiary legal research materials. In this review, it is found that with the implementation of the Job Creation Law, efforts have also been made to reform licensing regulations, as well as their implications for aspects of licensing regulations that facilitate investment in Indonesia.

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