RDS Custom instances require an instance profile for a built-in automation to evaluate the instance profile permissions, which can be impacted by IAM policies, resource-based policies, VPC endpoint policies, and SCPs.
If any of these permissions have explicit deny policies or incorrect permissions, an instance may go into an INCOMPATIBLE_CREATE state.
To troubleshoot this error, you can review the Amazon RDS events, use it to identify resource-specific permission or SCP permissions blocking instance creation.
This post provides information to identify the causes of the INCOMPATIBLE_CREATE state of RDS Custom instances due to incorrect instance profile permissions.
Furthermore, possible reasons for this state include missing required IAM policy permissions, IAM permissions boundary, resource-based policies, VPC endpoint policy, and SCPs.
This blog post also demonstrates a scenario where RDS Custom for SQL Server instance creation fails due to resource-based policy in AWS KMS.
To prevent or fix this error, grant all the required permissions to your IAM principal and make sure that your IAM instance profile role has all the necessary permissions.
You can avoid ongoing charges by deleting the relevant resources such as IAM roles, AWS KMS keys, and RDS Custom SQL Server instances.
The authors of this post are cloud support professionals working with AWS for several years and subject matter experts in Amazon RDS.
They provide technical assistance to customers on database migration, RDS infrastructure, monitoring, and security related scenarios.