ANALYSIS OF THE LEGAL ROLE OF LICENSING IN THE EASE OF FOREIGN INVESTMENT TO ACHIEVE ECONOMIC DEVELOPMENT

Abstract

This research discusses the role of licensing law in supporting the ease of foreign investment in Indonesia and its implications for national economic development. In a competitive global context, foreign direct investment (FDI) is one of the important factors in driving economic growth through technology transfer, job creation, and increased productivity. However, Indonesia still faces various challenges in creating a conducive investment climate, including legal uncertainty, overlapping regulations, and inefficient bureaucracy. Efforts to reform the licensing law have been made through the passage of the Job Creation Law and the implementation of a digitally-based and integrated Online Single Submission - Risk Based Approach (OSS-RBA) system. This research emphasizes that effective licensing not only provides legal certainty for investors, but also becomes a strategic instrument to direct investment to national priority sectors. On the other hand, the reform still faces challenges in terms of infrastructure readiness, apparatus competence, and consistency of policy implementation between the center and regions. Therefore, synergy between policymakers and business actors is needed to create a licensing system that is transparent, accountable, and adaptive to global dynamics. Thus, foreign investment can optimally contribute to sustainable and inclusive economic development in Indonesia.