BKPM Evaluates Regulations on Technical Approval for Raw Materials and Capital

The Ministry of Investment and Downstreaming/Investment Coordinating Board (“BKPM”) is evaluating a number of regulations deemed to hinder investment inflows into the country. One of these is the Technical Approval (“Pertek”) requirement for raw materials and capital goods for investors, which is often considered a bottleneck in the licensing process.

“In accordance with the directive, we will evaluate a number of Perteks. If they are hindering or even unnecessary, we will eliminate the approval requirement for investors,” said Head of Legal Bureau of BKPM, Andre Abaraham.

Broadly speaking, the Organization for Economic Cooperation and Development (OECD) requires a rigorous Regulatory Impact Assessment (RIA) before a regulation is implemented. Currently, Indonesia has implemented the 2025 Indonesian Standard Industrial Classification (“KBLI”) and optimized the Online Single Submission (“OSS”) system. 

These adjustments aim to make Indonesia a country that is increasingly investor-friendly and capable of competing fairly with developed nations as well as competitors in ASEAN such as Vietnam and Thailand.