Indonesia Bets on Green Energy and Digital Economy to Attract Foreign Capital

Indonesia has tightened its investment playbook with the enactment of Government Regulation No. 28/2025 (PP 28/2025), which establishes risk-based business licensing as the sole framework for companies entering the market. The regulation replaces earlier rules and centralizes approvals under the OSS digital platform, prohibiting local governments from imposing additional requirements. Officials say the move is designed to give foreign and domestic investors greater certainty, faster processing, and fewer bureaucratic hurdles.

The timing of the reform is strategic. Indonesia is seeking to attract global capital into priority industries—chiefly renewable energy and the digital economy—as part of its wider growth agenda. By aligning licensing with international standards and streamlining approvals, PP 28/2025 signals that the government is serious about creating a more predictable investment environment.

The new licensing framework sits at the heart of Indonesia’s push to align with global economic shifts. National targets for carbon reduction and sustainability are opening the door to large-scale solar, wind, and hydropower projects, while digitalization programs are fueling the rapid rise of e-commerce, fintech, and online services. For investors, these industries are not only buoyed by strong demand but also underpinned by reforms that promise to cut through red tape.

Green energy is emerging as one of Indonesia’s most promising growth areas. Incentives for renewable projects and international partnerships reflect the government’s determination to position the country as a hub for sustainable infrastructure. Under PP 28/2025, approvals for environmental permits are now subject to standardized criteria and fixed timelines, reducing uncertainty that has long been a barrier for foreign developers.

Indonesia already boasts more than 200 million internet users, making it one of the world’s largest digital markets. E-commerce platforms, fintech services, and digital wallets are expanding rapidly, driven by a young and tech-savvy population. Yet the sector’s scale brings regulatory scrutiny. The centralized standards under PP 28/2025 aim to harmonize rules that were once fragmented across regions, giving investors more clarity in areas such as data protection and financial licensing.

Beyond energy and technology, healthcare, tourism, and infrastructure remain vital pillars. Healthcare demand is rising with a growing middle class, while tourism is rebounding strongly as destinations outside Bali, such as Labuan Bajo and Lake Toba, attract international attention. Infrastructure modernization under the “Making Indonesia 4.0” initiative continues to support manufacturing and logistics. Each of these sectors now operates under the unified risk-based licensing system, which limits the risk of delays from overlapping local approvals.

While PP 28/2025 represents a significant step forward, its success will depend on execution. Transitioning to centralized licensing requires coordination across ministries and consistent enforcement at the local level. For international companies, the opportunity is considerable, but so is the need for careful compliance planning.

Specialist advisory firms such as CPT Corporate highlight that company registration, permits, and sector-specific approvals remain essential steps. Missteps in navigating the new framework could still delay otherwise promising projects, even as the system promises faster outcomes.

Indonesia’s bet is clear: by coupling structural reforms with high-growth sectors, it hopes to cement its place as Southeast Asia’s most dynamic investment destination. With PP 28/2025 at the center of this effort, the country is signaling to global markets that opportunity comes with a clearer path to entry—provided investors are ready to engage with a system that is still evolving in practice.