Regulatory reform in the field of business licensing constitutes one of the government’s strategic agendas to create a more competitive investment climate that is oriented toward legal certainty. This effort has been further reinforced through the enactment of Government Regulation Number 28 of 2025 concerning the Implementation of Risk-Based Business Licensing, which replaces Government Regulation Number 5 of 2021 as the principal instrument of risk-based licensing reform in Indonesia. This regulation serves as an integral component in the implementation of Law Number 6 of 2023, which reinstated the validity of Government Regulation in Lieu of Law Number 2 of 2022 on Job Creation. Accordingly, Government Regulation 28/2025 functions as a pivotal foundation in strengthening a modern licensing system that prioritizes efficiency, transparency, and accountability.
As a legal framework governing the implementation of risk-based business licensing, Government Regulation Number 28 of 2025 introduces several strategic provisions, including a reaffirmation of the minimum investment requirement for Foreign Direct Investment (FDI). This requirement is set forth in Article 212 paragraph (2), which stipulates that the minimum investment value for FDI per five-digit KBLI code per business location must exceed Rp10,000,000,000.00 (ten billion rupiah), excluding land and buildings. This provision is intended as a screening mechanism to ensure that only foreign investors possessing adequate capital, technology, and competence may enter the Indonesian market. The norm is designed to attract high-quality foreign investment, prevent small-scale enterprises from operating under a foreign investment label, and ensure that foreign direct investment generates significant economic impacts for Indonesia (Rajagukguk, 2019).
Nevertheless, the minimum investment requirement raises several normative issues that merit further examination. First, the provision invites scrutiny regarding its consistency with fundamental principles of investment law, particularly the principles of non-discrimination, equal treatment, and equitable efficiency as stipulated in Law Number 25 of 2007 concerning Investment. Second, there are questions concerning how the legal construction of the minimum investment requirement is established within the context of risk-based licensing, given that the provision is restrictive in nature and may affect the ease of doing business, which is the very aim of regulatory reform (OECD Regulatory Policy Committee, 2014). Third, from a theoretical standpoint, it is important to assess whether the minimum investment threshold satisfies the elements of legal certainty as understood in the concept of rechtszekerheid according to Gustav Radbruch and Hans Kelsen. Legal certainty is not limited to the clarity of norms, but also encompasses coherence between regulations, consistent applicability, and the ability of norms to provide clear guidance for business actors. In this regard, the minimum investment norm must be systematically examined to determine whether its construction is harmonized with the objectives of Government Regulation Number 28 of 2025 and the broader investment law framework.
Accordingly, the study of the legal construction of the minimum investment requirement for FDI under Government Regulation Number 28 of 2025 is not only critical for assessing regulatory effectiveness, but also for understanding its implications for legal certainty and the structure of national investment. Based on these considerations, this research seeks to provide a comprehensive normative analysis of how the minimum investment requirement is constructed within Indonesia’s legal framework and the extent to which the norm aligns with the fundamental principles of investment law.
Based on the foregoing description, this study formulates the following main research questions: (1) How is the legal construction of the minimum investment requirement for Foreign Direct Investment under Government Regulation 28 of 2025; (2) To what extent is the minimum investment requirement consistent with the principles of investment law in Indonesia.

This research employs a normative legal research method. Normative legal research is conducted by examining library materials or secondary data exclusively (Peter MM, 2017). This study utilizes primary legal materials, which include relevant legislation concerning risk-based investment licensing, as well as

secondary legal materials in the form of literature, doctrines, and opinions of legal scholars. The methodological approaches adopted are the statute approach and the conceptual approach. The technique for collecting legal materials is carried out through library research by reviewing regulations, official documents, and relevant literature in order to obtain a comprehensive analytical foundation.

3.1. The Legal Construction of the Minimum Investment Requirement for Foreign Direct Investment under Government Regulation Number 28 of 2025.
The minimum investment requirement for Foreign Direct Investment (FDI) under Government Regulation Number 28 of 2025, particularly Article 212 paragraph (2), stipulates that each business field at the five-digit KBLI classification and per business location must have an investment value exceeding Rp10,000,000,000.00, excluding land and buildings. This norm is systematically positioned as part of the verification mechanism within the OSS (Online Single Submission) system to ensure that the business data submitted by foreign investors comply with the minimum standards established by the government.
This legal construction is a continuation of the previous regulatory model under Government Regulation Number 5 of 2021, which essentially introduced an investment threshold for FDI as a means to regulate market structure, promote value-added investment, and prevent small-scale enterprises from operating under a foreign investment scheme when such activities do not generate significant economic impact for the national economy (Simanjuntak, 2022). The placement of the minimum investment requirement as both an administrative and substantive condition indicates that the government aims not only to conduct administrative screening but also to direct foreign investment toward sectors that provide strategic value. Nevertheless, the provision raises several issues related to the clarity of the norm, particularly because Government Regulation Number 28 of 2025 does not provide detailed explanations regarding the methodology for assessing investment value, the cost components that may be included, or the benchmarks for the intended “value creation.” This opens broad interpretive space and potential uncertainty in implementation. From the perspective of statutory theory, the absence of clear normative scope may weaken the principle of lex certa, which requires that legal rules be formulated clearly and unambiguously.
The absence of technical parameters regarding the method of assessing investment value and the cost elements considered under Government Regulation Number 28 of 2025 reflects a weak adherence to the lex certa principle. This principle essentially requires that a legal norm be drafted in clear language, with adequate precision, and comprehensible to those bound by it. According to Hans Kelsen, legal certainty can only be achieved when legal norms are structured logically and hierarchically, thereby minimizing unnecessary discretionary space at the implementation level. Vague norms, in Kelsen’s view, may undermine the rationality of the legal system because they allow subjective interpretation by law enforcers. Kelsen’s perspective aligns with Gustav Radbruch’s concept of the fundamental values of law (Grundwerte des Rechts), particularly the value of legal certainty (Rechtssicherheit). Radbruch emphasizes that legal certainty is the minimum requirement for law to function as a guide for societal behavior. When legal norms become unpredictable due to imprecise formulation, law loses its function as an instrument of social engineering and regulatory governance, especially in investment policy, which requires a high degree of predictability for business actors and investors.
In the context of Government Regulation Number 28 of 2025, the ambiguity in the method for assessing investment value generates not only theoretical concerns but also administrative implications. Licensing officials implementing OSS may interpret differently which cost components may be included in determining the investment value. This opens potential avenues for discrimination among business actors. Conversely, investors do not obtain certainty regarding the compliance criteria necessary to meet the Rp10 billion investment threshold.
Accordingly, it may be concluded that the absence of technical parameters in Government Regulation Number 28 of 2025 results in the investment-value requirement failing to meet the lex certa standard demanded in modern legislative theory. This uncertainty could lead to ineffective implementation and increase the risk of administrative disputes, particularly concerning the assessment of investor compliance by OSS.
Based on the foregoing analysis, the minimum investment requirement for Foreign Direct Investment under Article 212 paragraph (2) of Government Regulation Number 28 of 2025 demonstrates that the normative construction formulated by the regulatory drafter has not yet achieved the ideal level of normative coherence expected of an implementing regulation in the investment law framework. Although the norm establishes the basic elements namely, the subject, object, and conditions of application the provision does not explicitly stipulate legal consequences for non-compliance by business actors, rendering it a norm that is not fully operational and dependent on administrative instruments at the OSS level and technical policies issued by BKPM. From the perspective of hierarchical coherence, the norm also exhibits conceptual tension with the provisions at the statutory level, particularly Law Number 25 of 2007 on Investment and Law Number 6 of 2023 on Job Creation, both of which do not provide an explicit delegative mandate for the establishment of an investment threshold, thereby raising potential issues concerning ultra vires action and inconsistency with the non-discrimination principle and the openness principle in national investment law.
Therefore, although the ratio legis underlying the formation of the investment threshold namely the screening of foreign investors, protection of domestic business structures, and consolidation of risk-based licensing policy, remains teleologically defensible, such policy justification has not been fully integrated into the normative design of the provision. This is due to the absence of clear verification methodology and technical guidelines that ensure consistent implementation at the operational level. Consequently, the legal construction of the minimum investment requirement under Government Regulation Number 28 of 2025 occupies an ambivalent position: while it may be justified from a policy perspective, it remains normatively incomplete and requires further harmonization and regulatory elaboration to ensure adherence to the principles of legal certainty, proportionality, and coherence within Indonesia’s investment law system.
An analysis of the legal construction of the minimum investment requirement stipulated in Government Regulation Number 28 of 2025 must also be situated within the framework of normative relationships in the Indonesian investment law system. From the perspective of the hierarchy of norms theory (Stufenbau des Recht), every legal norm derives its validity from a higher norm and simultaneously serves as the basis for the formation of lower norms. Consequently, Article 212 paragraph (2) of Government Regulation Number 28 of 2025 cannot be understood in isolation but must be examined in relation to Law Number 25 of 2007 on Investment and Law Number 6 of 2023 on Job Creation as its sources of normative legitimacy. Within this framework, an important issue arises concerning the scope of delegated authority vested in the Government in promulgating implementing regulations. Although the Investment Law grants authority to the Government to further regulate the implementation of investment activities, no provision explicitly establishes a minimum investment threshold in the form of a specific monetary amount for foreign investors. This condition warrants further examination because, theoretically, implementing regulations are intended not only to execute statutory provisions but also to refrain from creating new restrictions that substantially alter the scope of rights and obligations established by the legislature.
From the perspective of administrative law, the establishment of an investment threshold exceeding IDR 10 billion may be viewed as a form of the Government’s normative discretion in formulating national investment policy. However, the exercise of such normative discretion must remain within the boundaries of the principle of legality (rechtmatigheid van bestuur), which requires that every regulatory action undertaken by the Government be based upon a clear legal authority that can be systematically traced to higher-level legislation. Accordingly, the principal issue surrounding Article 212 paragraph (2) is not whether the Government possesses the authority to regulate foreign investment, but rather the extent to which the investment threshold requirement has an adequate normative foundation within the national investment law framework. Furthermore, when analyzed through the lens of the theory of legal coherence, a norm is considered coherent when its substance does not create contradictions with the objectives and fundamental principles of the legal system governing it. In the context of Indonesian investment law, the primary objectives of investment regulation, as reflected in Law Number 25 of 2007, are to create a conducive investment climate, provide legal certainty, promote economic growth, and enhance national competitiveness. Therefore, the minimum investment requirement should not merely be perceived as a restrictive instrument but also as a regulatory mechanism that remains consistent with the overarching objectives of the investment legal regime (Adolf, 2020).
From the standpoint of legislative theory, the existence of a minimum investment norm also reflects the characteristics of an open legal policy that grants the Government discretion in determining the direction of national economic policy. In various decisions, the Constitutional Court has affirmed that policymakers possess a certain degree of freedom in choosing policy options, provided that such choices do not contravene the Constitution and prevailing legal principles. Nevertheless, the broader the policy discretion employed to restrict economic activities, the greater the need for rational, proportional, and transparent normative justification. Accordingly, the investment threshold stipulated in Government Regulation Number 28 of 2025 should not be regarded merely as an administrative figure, but rather as a legal instrument that must possess a normative justification capable of being defended both theoretically and juridically.
Based on the foregoing analysis, it can be understood that the legal construction of the minimum investment requirement under Government Regulation Number 28 of 2025 encompasses two interrelated dimensions. First, the norm represents a manifestation of the State’s legal policy aimed at selecting the quality of foreign investment through a risk-based licensing mechanism. Second, the norm constitutes an integral part of the investment law system that must satisfy the requirements of validity, coherence, and hierarchical conformity with higher-level legislation. Therefore, the quality of the legal construction of Article 212 paragraph (2) is determined not only by the effectiveness of its policy objectives but also by its ability to demonstrate systemic consistency within the broader framework of Indonesian investment law. This analysis further indicates that the principal issue concerning the minimum investment requirement lies not merely in the magnitude of the investment value prescribed, but rather in how the norm acquires legitimacy, operates, and integrates harmoniously within the national legal system.

3.2. The Consistency of the Minimum Investment Requirement with the Fundamental Principles of Investment Law in Indonesia.
The minimum investment threshold for Foreign Direct Investment (FDI) as stipulated in Article 212 paragraph (2) of Government Regulation Number 28 of 2025 must be assessed for its compatibility with the fundamental principles governing investment activities in Indonesia. Article 3 of Law Number 25 of 2007 affirms that investment activities must be carried out based on the principles of legal certainty, transparency, balanced progress, and equal treatment regardless of the country of origin. Normatively, these principles require that investment regulations be inclusive and non-discriminatory, such that any restrictive measure must rest upon objective justifications that are legally defensible.
In relation to the principle of equal treatment and non-discrimination, the minimum investment requirement for FDI constitutes a form of disparate treatment that differentiates the position of foreign investors from domestic investors. This distinction is permissible under the law insofar as it aims to protect national interests and strengthen economic structure (Ibrahim R., 2022). However, policymakers must remain mindful that such restrictions must not result in disproportionate barriers or lead to protectionist measures inconsistent with Indonesia’s commitments under international economic agreements (OECD, 2020).
Furthermore, regarding the principle of legal certainty, the minimum investment requirement demands a more comprehensive elaboration of sectoral parameters, risk assessment mechanisms, and permissible exemptions tailored to the characteristics of each industry. Without such clarity, overly broad discretion on the part of licensing authorities may result in inconsistent implementation and increased regulatory costs for businesses (Salim HS., 2020). Legal certainty is a key element in determining the quality of governance within the risk-based business licensing framework; consequently, ambiguous norms may undermine the goals of regulatory reform.
In addition, the principles of transparency and efficiency require the availability of clear information for investors concerning the economic justification for the establishment of the minimum investment threshold. The absence of transparent explanations regarding the underlying economic rationale may foster perceptions that the policy is arbitrary and insufficiently oriented toward improving the business climate (Kennedy, 2024). Therefore, to ensure the effectiveness of the norm, policymakers must develop an evaluation framework grounded in economic data and sectoral risk analysis.
Taking these principles into account, it can be emphasized that the consistency of the minimum investment requirement under Government Regulation Number 28 of 2025 still requires reinforcement both in its normative reasoning and in its practical implementation to align fully with the foundational principles of investment law while supporting Indonesia’s integration within the global investment system.
Based on this discussion, the alignment of the minimum investment requirement for Foreign Direct Investment under Government Regulation Number 28 of 2025 with the fundamental principles of investment law still displays imperfections in its normative construction. While the investment threshold may be justified as a policy instrument to promote selectivity and strengthen national economic structure, the norm has not yet fully satisfied the principles of equal treatment, legal certainty, transparency, and efficiency that form the core foundation of Indonesia’s investment regulatory framework. The absence of clear evaluative parameters, detailed economic justification, and effective enforcement mechanisms creates potential implementation barriers that may weaken the objectives of the risk-based licensing reform. Consequently, a strengthened normative design and more comprehensive implementing guidelines are required to ensure that the provision is not only legally valid but also functions optimally in supporting a competitive and sustainable investment climate.
The analysis of the consistency of the minimum investment requirement under Government Regulation Number 28 of 2025 cannot be conducted solely through a textual examination of the provision concerned. It must also take into account the position of legal principles as the normative foundation that guides the formulation and implementation of investment law. In modern legal theory, legal principles are not merely abstract and declaratory norms; rather, they function as interpretative guidelines and as parameters for assessing the validity of the substantive content of statutory regulations. Therefore, examining the consistency of Article 212 paragraph (2) of Government Regulation Number 28 of 2025 with the principles embodied in Article 3 of Law Number 25 of 2007 on Investment is essential to determine whether the provision reflects the fundamental orientation of Indonesia’s national investment law (Marzuki, 2021).
From the perspective of the principle of balance between economic progress and national economic unity, the minimum investment policy essentially pursues objectives that can be normatively justified. The establishment of an investment threshold is intended to ensure that incoming foreign investment makes a tangible contribution to economic development, enhances national industrial capacity, creates employment opportunities, and facilitates technology transfer. In this context, the minimum investment requirement may be understood as an expression of the State’s commitment to sustainable economic development without entirely restricting access to foreign investment. Consequently, from a teleological perspective, the provision is consistent with the objectives of investment law as stipulated in Articles 3 and 4 of the Investment Law (Salim HS., 2023).
Nevertheless, such alignment of objectives is not fully reflected in the normative formulation of the provision. From the perspective of the principle of proportionality, every restriction on economic activity must satisfy three essential elements: the existence of a legitimate aim, a rational connection between the restriction and the objective pursued, and a balance between the benefits achieved and the burdens imposed (balancing test) (Ucaryilmaz, 2021). Although the objective of improving investment quality may be regarded as legitimate, Government Regulation Number 28 of 2025 does not provide adequate normative justification for establishing IDR 10 billion as the investment threshold. The absence of such justification makes it difficult to assess whether the restriction is genuinely proportionate or whether it potentially creates excessive barriers to entry for certain categories of foreign investors. Furthermore, when examined through the lens of the equal treatment principle, a distinction must be made between legitimate differentiation and unlawful discrimination. Investment law does not prohibit the State from applying different treatment to particular categories of investors, provided that such differentiation is based on objective considerations and is intended to achieve a legitimate public interest. Accordingly, the existence of an investment threshold is not inherently inconsistent with the principle of equal treatment. However, the legitimacy of such differential treatment depends on the ability of the regulatory authority to demonstrate that the restriction is rational, proportionate, and non-arbitrary (Huala Adolf, 2022). In this regard, the absence of transparent evaluative indicators may weaken the normative justification for distinguishing between foreign and domestic investors.
From the standpoint of the principle of transparency, the minimum investment requirement also raises concerns regarding regulatory openness. The principle of transparency not only requires public access to legal information but also demands clarity regarding the considerations underlying policy formulation. Within a risk-based licensing regime, transparency is a crucial element in ensuring regulatory predictability and enhancing investor confidence in the legal system. Therefore, the absence of a normative explanation concerning the economic rationale, risk parameters, and evaluation methods underlying the determination of the investment threshold may be regarded as a deficiency in the implementation of the transparency principle (Kennedy, 2024). Moreover, when assessed in light of the principle of equitable efficiency, the minimum investment requirement should strike an appropriate balance between investment control objectives and ease of doing business. This principle requires that every regulatory instrument generate benefits that outweigh the compliance costs imposed upon business actors. In this regard, the absence of detailed operational guidelines concerning investment verification mechanisms may increase administrative costs and procedural uncertainty for investors. Consequently, the effectiveness of the provision as an instrument of investment control may be diminished, as it could create unnecessary administrative barriers.
Based on the foregoing discussion, it may be concluded that the principal issue concerning the consistency of the minimum investment requirement under Government Regulation Number 28 of 2025 does not lie in the policy objective itself, but rather in the fact that the normative formulation has not yet optimally linked that objective with the fundamental principles of investment law. In principle, the provision may still be justified within the framework of protecting national interests and enhancing investment quality. However, to ensure full consistency with the principles of legal certainty, equal treatment, transparency, proportionality, and equitable efficiency, it is necessary to strengthen its normative justification, formulate clearer evaluative parameters, and achieve a more comprehensive harmonization with the fundamental principles established under Law Number 25 of 2007 on Investment.

Based on the findings of this study, it can be concluded that the minimum investment requirement for Foreign Direct Investment (FDI), as stipulated in Article 212 paragraph (2) of Government Regulation Number 28 of 2025, constitutes a legal instrument designed to support the policy of investment selectivity through a risk-based business licensing mechanism. From a teleological perspective, the provision possesses a justifiable ratio legis as it is intended to enhance the quality of foreign investment, encourage value-added investment, protect the national business structure, and direct investment toward sectors that contribute strategically to economic development. Nevertheless, from the standpoint of legal construction, the provision has not yet demonstrated an ideal degree of normative coherence within the Indonesian investment law system. The absence of regulations concerning the methodology for assessing investment value, compliance verification parameters, and legal consequences for non-compliance indicates that the provision has not fully satisfied the requirements of the lex certa principle and legal certainty as fundamental principles of legislative drafting. Furthermore, from the perspective of the hierarchy of norms, the regulation of the investment threshold through a Government Regulation still raises questions regarding the clarity of the delegated authority derived from Law Number 25 of 2007 on Investment and Law Number 6 of 2023 on Job Creation. Consequently, its normative construction requires further strengthening to ensure greater conformity with the principles of validity and coherence within the legal system.
Moreover, the findings reveal that the minimum investment requirement under Government Regulation Number 28 of 2025 is not yet fully consistent with the principles of investment law embodied in Article 3 of Law Number 25 of 2007. Although differential treatment between foreign and domestic investors may, in principle, be justified as a means of protecting national interests and strengthening the national economic structure, the normative legitimacy of such restrictions requires objective, proportionate, and transparent justification. In practice, the minimum investment requirement is not supported by adequate explanations regarding the basis for determining the investment threshold, sectoral evaluation parameters, or supervisory mechanisms capable of ensuring uniform implementation. This condition has resulted in the suboptimal realization of the principles of legal certainty, equal treatment, transparency, and equitable efficiency. Consequently, although the provision pursues a legitimate policy objective (legitimate aim), the relationship between the intended objective and the normative design employed continues to exhibit weaknesses in terms of proportionality and regulatory transparency.
Accordingly, the principal finding of this study is that the fundamental issue concerning the minimum investment requirement under Government Regulation Number 28 of 2025 does not lie in the existence of the investment threshold itself as an instrument for regulating foreign investment. Rather, it lies in a normative construction that has not yet been fully capable of integrating investment policy objectives with the fundamental principles of investment law. Therefore, regulatory strengthening through the formulation of more detailed technical guidelines, the clarification of investment evaluation parameters, harmonization with statutory norms, and the development of transparent supervisory and evaluation mechanisms constitutes an urgent necessity. Such measures are essential to ensure that the minimum investment policy possesses not only policy legitimacy but also strong normative legitimacy, thereby contributing to the establishment of an investment governance framework that promotes legal certainty, competitiveness, and sustainability within the broader context of national economic development.

4.1. Recommendation
Based on the conclusions of this study, the government needs to strengthen the legal construction of the minimum investment requirement under Government Regulation Number 28 of 2025 through the formulation of more comprehensive technical guidelines, particularly concerning the methodology for assessing investment value and the cost components that may be taken into account during licensing verification through the OSS system. Harmonization of implementing regulations with the delegative provisions under the Investment Law and the Job Creation Law is also urgently required to ensure the absence of inconsistencies in the application of the investment threshold. In addition, it is necessary to enhance the implementation capacity at the OSS and the Investment Coordinating Board (BKPM) to prevent interpretative discrepancies among officials that may lead to unequal treatment or legal uncertainty for investors.
Furthermore, policymakers should adopt a transparency- and data-driven approach in formulating and evaluating the minimum investment policy to ensure that the restriction remains proportionate, does not result in excessive discrimination, and does not create barriers that conflict with Indonesia’s international commitments in the field of investment regulation. Strengthening the system of sectoral risk assessment and ensuring stakeholder participation in the public consultation process are essential to guarantee that the minimum investment policy is not only normatively sound but also capable of supporting a more competitive, sustainable business environment aligned with the objectives of national economic development.