Harmonization of Investment Regulations: Aligning Central and Local Rules to Support Fair and Equitable Business Facilitation

Abstract

Indonesia's investment governance operates within a multilevel legal architecture in which central statutes and regional regulations frequently diverge, generating uncertainty for domestic and foreign investors alike. Since the enactment of Law Number 11 of 2020 on Job Creation and its implementing regulations, the central government has pursued a risk-based, single-submission licensing model intended to simplify business entry, yet numerous provincial and district regulations continue to impose requirements inconsistent with national standards. This article examines the extent to which harmonization mechanisms between central and local investment regulations support fair and equitable business facilitation in Indonesia. Employing a normative juridical method with statutory, conceptual, and comparative approaches, the study analyzes primary legal materials together with secondary literature drawn from recent Indonesian and international scholarship. The findings indicate that overlapping authority, weak regulatory review mechanisms, and inconsistent local incentive schemes remain principal obstacles to a coherent national investment climate. The article's novelty lies in proposing an integrated harmonization framework that combines ex-ante regulatory screening, digital synchronization through the Online Single Submission system, and a proportional fairness principle balancing local fiscal autonomy with national investment objectives. The study concludes that sustainable business facilitation requires not merely deregulation but institutionalized vertical coordination that protects both investor certainty and regional developmental interests, thereby reconciling the competing logics of centralization and regional autonomy within a single, coherent legal order.