The simplification of licensing procedure in job creation law: the effectiveness to attract foreign investor

Foreign Direct Investment in Indonesia has a very significant role in realizing the economic growth as a developed country. It is important to provide a good quality investment climate for a developing country. However, there are existing challenges to attracting foreign investors. Several challenge...

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Main Authors: Joko T. Suroso, Dani Durahman, Indra Budi
Format: Article
Language:English
Published: Taylor & Francis Group 2024-12-01
Series:Cogent Social Sciences
Subjects:
Online Access:https://www.tandfonline.com/doi/10.1080/23311886.2024.2414509
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author Joko T. Suroso
Dani Durahman
Indra Budi
author_facet Joko T. Suroso
Dani Durahman
Indra Budi
author_sort Joko T. Suroso
collection DOAJ
description Foreign Direct Investment in Indonesia has a very significant role in realizing the economic growth as a developed country. It is important to provide a good quality investment climate for a developing country. However, there are existing challenges to attracting foreign investors. Several challenges include hyperregulations and overlapping authority. Referring to the Easy of Doing Business Indicator by the World Bank, Indonesia reformed its investment regulations together with other related regulations through Law No. 11 of 2020 on Job Creation. One of the main issues that is newly regulated is the simplification of the licensing process with an online risk-based approach. Even though it does not directly regulate corruption as the main obstacle for investment regarding the World Economic Executive Opinion Survey, the integrated online system for the entire licensing procedure could reduce corrupt practices within the process. This article describes the investment law reform and analyzes its effectiveness. The findings of this study have the potential to inform changes that must be made in the field of domestic investment law. The result shows that the legal framework reformation of the simplification of licensing through Job Creation Law theoretically reduces barriers and increases the interest of foreign investors to invest in Indonesia. Foreign investment is instrumental for Indonesia as a host state to increase its economy. to attract foreign investors, Indonesia has reformed the domestic investment law through the Job Creation Law. The stipulations that were revoked and revised were areas that can ease foreign investment in Indonesia based on the EoDB Indicators from the World Bank and the World Economic Forum’s Executive Opinion Survey. These reforms are simplification of licensing, licensing processes into one electronic licensing system, and harmonization of provisions through a risk-based approach. However, corruption as one of the main challenges to attracting foreign investors is not directly regulated in the Job Creation Law. It is hoped that the reform of the OSS and NSPK regulations mentioned above can prevent corrupt practices.
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spelling doaj-art-b7e05a45d1134ed9b10a6fa918e15fc92025-07-01T17:15:37ZengTaylor & Francis GroupCogent Social Sciences2331-18862024-12-0110110.1080/23311886.2024.2414509The simplification of licensing procedure in job creation law: the effectiveness to attract foreign investorJoko T. Suroso0Dani Durahman1Indra Budi2Universitas LanglangbuanaUniversitas LanglangbuanaPostgraduate Faculty of Law, Universitas Islam BandungForeign Direct Investment in Indonesia has a very significant role in realizing the economic growth as a developed country. It is important to provide a good quality investment climate for a developing country. However, there are existing challenges to attracting foreign investors. Several challenges include hyperregulations and overlapping authority. Referring to the Easy of Doing Business Indicator by the World Bank, Indonesia reformed its investment regulations together with other related regulations through Law No. 11 of 2020 on Job Creation. One of the main issues that is newly regulated is the simplification of the licensing process with an online risk-based approach. Even though it does not directly regulate corruption as the main obstacle for investment regarding the World Economic Executive Opinion Survey, the integrated online system for the entire licensing procedure could reduce corrupt practices within the process. This article describes the investment law reform and analyzes its effectiveness. The findings of this study have the potential to inform changes that must be made in the field of domestic investment law. The result shows that the legal framework reformation of the simplification of licensing through Job Creation Law theoretically reduces barriers and increases the interest of foreign investors to invest in Indonesia. Foreign investment is instrumental for Indonesia as a host state to increase its economy. to attract foreign investors, Indonesia has reformed the domestic investment law through the Job Creation Law. The stipulations that were revoked and revised were areas that can ease foreign investment in Indonesia based on the EoDB Indicators from the World Bank and the World Economic Forum’s Executive Opinion Survey. These reforms are simplification of licensing, licensing processes into one electronic licensing system, and harmonization of provisions through a risk-based approach. However, corruption as one of the main challenges to attracting foreign investors is not directly regulated in the Job Creation Law. It is hoped that the reform of the OSS and NSPK regulations mentioned above can prevent corrupt practices.https://www.tandfonline.com/doi/10.1080/23311886.2024.2414509Foreign direct investmentease of doing businessjob creation lawBusiness & Company LawCommercial LawRegulation
spellingShingle Joko T. Suroso
Dani Durahman
Indra Budi
The simplification of licensing procedure in job creation law: the effectiveness to attract foreign investor
Cogent Social Sciences
Foreign direct investment
ease of doing business
job creation law
Business & Company Law
Commercial Law
Regulation
title The simplification of licensing procedure in job creation law: the effectiveness to attract foreign investor
title_full The simplification of licensing procedure in job creation law: the effectiveness to attract foreign investor
title_fullStr The simplification of licensing procedure in job creation law: the effectiveness to attract foreign investor
title_full_unstemmed The simplification of licensing procedure in job creation law: the effectiveness to attract foreign investor
title_short The simplification of licensing procedure in job creation law: the effectiveness to attract foreign investor
title_sort simplification of licensing procedure in job creation law the effectiveness to attract foreign investor
topic Foreign direct investment
ease of doing business
job creation law
Business & Company Law
Commercial Law
Regulation
url https://www.tandfonline.com/doi/10.1080/23311886.2024.2414509
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