Indonesia’s oil and gas sector is governed by Law No. 22 of 2001 regarding Oil and Gas. The oil and gas sector comprises of upstream and downstream activities, which are separately regulated and organised.
The Government of Indonesia recently issued Law No. 2 of 2017 regarding Construction Services. The New Construction Law introduces several changes and new provisions related to construction services in Indonesia.
The Ministry of Trade ("MOT") has introduced a new platform for the registration of a number of licenses including the franchise registration certificate. The system is launched based on MOT Regulation No. 85 and MOT Regulation No. 86.
The Minister of Energy and Mineral Resources has approved the 2017-2026 Electricity Supply Business Plan (RUPTL) of the national power utility, PT PLN (Persero). The RUPTL in essence represents PLN's plan to procure electricity from private Independent Power Producers.
On 14th March 2017, the Financial Services Authority (Otoritas Jasa Keuangan - "OJK") issued OJK Rule No. 10/POJK.04/2017. While generally there is no significant change in the procedures for convening a General Meetings of Shareholders, there are two new provisions which have been introduced.
On 14th March 2017, the Financial Services Authority ("OJK") issued OJK Rule No. 11/POJK.04/2017 on Reporting of Share Ownership in Public Companies. Similar to the previous rule, the following parties need to file a share ownership report to OJK.
Bank Indonesia (“BI”) has issued BI Circular Letter No. 18/41/DKSP on licensing procedures and requirements related to payment system transactions in Indonesia. The Circular Letter mainly concerns licensing procedures and requirements set by BI for various Payment System Service Providers.
The management of personal data under Indonesian law is largely consent-based. This consent must be given in writing by the owners of the personal data, either manually or electronically, after the owners are given a full explanation of any actions that will be taken in regards to their personal data.
Regulation 67 became effective on 30th January 2017 and provides more detailed provisions on trademark registration procedures criteria to determine the similarity of goods/services as well as criteria on well-known trademarks. Regulation 67 does not clearly revoke Government Regulation No. 23 of 1993.
MEMR Reg. 8/2017 regulates a type of oil and gas cooperation contract called a gross split production sharing contract (“Gross Split PSC”). Gross Split PSC applies for both conventional and non-conventional oil and gas.
There are various laws that relate to data privacy in a number of specific areas although there is no comprehensive data protection law in Indonesia. Indonesian legal scholars often refer to Article 28(g) of the 1945 Constitution as the basis (albeit rather vague basis) for more specific data privacy legislation.
On 23rd December 2016, the Financial Services Authority ("OJK") issued Regulation 73/POJK.05/2016 on Good Corporate Governance ("GCG") for Insurance Companies ("Regulation 73"). Regulation 73 became effective on 28th December 2016.
Regulation of Minister of Energy and Mineral Resources No. 12/2017 on the Utilisation of Renewable Energy Resources for Electricity Supply now sets out the tariff framework for several types of renewable energy projects.
Minister of Energy and Mineral Resources ("MEMR") Regulation No. 9 of 2017 further regulates the divestment process for the downstream mining industry in particular to the price at which the government will pick up shares. The regulation replaces MEMR regulation No. 27 of 2013 to the extent of the divestment provisions.
In 2011, the Indonesian government reformed its National Social Security System and passed Law No. 24 on the Social Security Organising Body to help meet the basic needs of the country’s population. Companies in Indonesia are required to register employees in the Indonesian government’s employment social security programmes.
The Government of Indonesia began 2017 by issuing Government Regulation No. 1 of 2017 regarding the Fourth Amendment to Government Regulation No. 23 of 2010 regarding the Implementation of Mineral and Coal Mining Business Activities.
The Ministry of Energy and Mineral Resources on 19th January 2017 issued Regulation No. 10/2017 on Principles of Power Purchase Agreements, which, for the first time in any material way, seeks to impose certain requirements as to what provisions must be built into PPAs in the power sector.
Indonesia’s Ministry of Finance (“MOF”) recently issued MOF 129/2016 amending MOF 265/2015 and introduces several new provisions. The newly-issued MOF 129/2016 introduces additional provisions with the stated aim of improving efficiency and effectiveness.
On 23rd December 2016, the Financial Services Authority issued Regulation No. 67/POJK.05/2016 on Licensing and Institution of Insurance Companies, Syariah Insurance Companies, Reinsurance Companies and Syariah Reinsurance Companies. The regulation became effective on 28th December 2016.
The Indonesian government introduced three new regulations that allow for the exports of certain amounts of mineral concentrates, the conversion of Contracts of Work holders into IUPKs, and for every producing mine in Indonesia to be majority Indonesian-owned.
In late 2016, the Indonesian government issued Regulation No.182/PMK.04/2016 on the Importation of Consigned Goods ("New Regulation"). Consigned goods were previously regulated under the Ministry of Finance Regulation No. 188/PMK.04/2010. The law will become effective on 28th January 2017.
On 23rd December 2016, the Financial Services Authority issued Regulation No. 69/POJK.05/2016 which became effective on 28th December 2016, providing more comprehensive provisions on certain aspects of running an insurance business.
The Minister of Communication and Informatics has issued Regulation No. 20 of 2016 on Personal Data Protection in Electronic Systems which became effective on 1st December 2016. The regulation provides new measures to the current personal data protection provisions in Indonesia.
The Ministry of Law and Human Rights officially launched electronic- based intellectual property services on 29th December 2016. The electronic filing system enables IP consultants to file applications at any time online without being constrained by the limited opening hours of the Intellectual Property Office.
On 28th October 2016, the Head of the Capital Investment Coordinating Board issued Regulation No. 8 of 2016 ("Regulation 8"), which immediately went into effect. Regulation 8 was issued to support the tax amnesty programmes initiated by the Indonesian government.
On 8th November 2016, the Minister of Health issued Regulation No. 58 of 2016 on Sponsorship for Healthcare Professionals ("Regulation 58"), which took effect on 29th November 2016. Under Regulation 58, both givers and receivers must report to the Corruption Eradication Commission.
The new Trademark and Geographical Indication Law has recently been introduced as Law No. 20 of 2016. This new law became effective on 25 November 2016.
The Indonesian government recently issued Government Regulation No. 54 of 2016 regarding the Third Amendment to Government Regulation No. 29 of 2000. The newly-issued Third Amendment introduces a provision that allows Regional-Owned Enterprises the same treatment as State-Owned Enterprises.
The Governor of Jakarta has issued a new regulation on the minimum wage for 2017, as stipulated under Regulation No. 227 of 2016 (Reg. 227). Under Reg. 227, companies in Jakarta are prohibited from paying workers less than 3,355,750 IDR per month.
The Indonesian government is currently discussing the Draft Law on Food and Drugs Supervision, which incorporates a total of 105 Articles setting out a comprehensive arrangement of provisions related to the supervision of food and drugs.
Indonesia’s Ministry of Trade (“MOT”) recently issued a regulation on the distribution of goods. MOT Regulation No. 22/M-DAG/PER/3/2016 regarding General Provisions on the Distribution of Goods stipulates that goods can be distributed directly or indirectly to consumers within Indonesia.
Bank Indonesia recently launched a FinTech Office on 14th November 2016. The office is expected to boost the growth of the Indonesian FinTech industry, optimise technology developments in the sector, improve the industry's competitiveness and provide feedback from business players.
On 31st October 2016, the Indonesian government issued Government Regulation No. 45 of 2016 on types and tariffs of non-tax state revenue applicable to the Ministry of Law and Human Rights. The enactment of GR 45/2016 changes some of the official tariffs at the Directorate General of Intellectual Property of Indonesia.
On 19th September, the Minister of Agrarian Affairs and Spatial Planning/Head of National Land Agency issued Regulation 29 on Procedure for Granting, Releasing, or Transferring Land Rights over Residential Houses to Foreign Nationals in Indonesia.
On 27th October 2016, the Indonesian Parliament amended Law No. 11 of 2008 on Electronic Information and Transactions. The amendments in the Amendment Law are not substantial and are related to a few concepts and existing provisions in the EIT Law.
The Halal Product Assurance Law needs around 20 implementing regulations which must be issued within two years after 17th October 2014. The Halal certification obligation under the Halal Product Assurance Law will become mandatory 5 years after 17th October 2014.
The Government of Indonesia has over the past year issued several regulations of note on seaports. Among these regulations include Ministry of Transportation Regulation No. PM 15 of 2015 and Government Regulation No. 61 of 2009.
Indonesia’s Ministry of Trade recently issued new regulations that affect the rules for importing beverages, cosmetics, electronics, used capital goods and horticultural products. Among these include MOT Regulation No. 87/2015 regarding Provisions on the Import of Certain Products.
Indonesia recently enacted the new Trademark and Geographical Indication Law which will replace Law No. 15 of 2001. The new law will provide protection to broader types of trademark, as well as make it more time and cost-efficient for trademark owners to obtain registration licences in Indonesia.
Following the enactment of Law No. 13 of 2016 on Patent, the Ministry of Law and Human Rights recently issued Circular Letter No. HKI-3-08.OT.02.02 of 2016 on the Transitional Period of Patent Maintenance Fee Payment from the old Patent Law.
The MOT has revoked the requirement for importers to obtain a Special Importer Identification Number for the import of certain products such as textiles, shoes and electronics. The provisions on Importer Identification Number are now regulated under MOT Regulation No. 70/2015, which became effective on 1st January 2016.
On 4th August 2016, the Food and Drug Supervisory Agency enacted a new regulation which changes the registration process of drugs. The changes are reflected in Head of BPOM Regulation No. 17 of 2016 on the Second Amendment of Head of BPOM Regulation No. 3 of 2011.
The Indonesian Capital Investment Coordinating Board recently announced the terms of principle licenses and business licenses. The announcement was said to be effective as of 30th September 2016.
On 6th September 2016, the Minister of Energy and Mineral Resources issued Regulation No. 24 of 2016 on mine mouth coal pricing. This amends the existing Regulation No. 9 of 2016 on the Procedures for the Supply and Determination of Coal Price for Mine Mouth Power Plants.
On 4th August 2016, Ministry of Energy and Mineral Resources Regulation No. 21 of 2016 on the Purchase of Electric Power from Biomass and Biogas Power Plants was enacted. Business entities intending to develop and operate biomass and biogas power plants must first secure a stipulation as the developer of a biomass and biogas power plant.
On 8th September 2016, BANI Pembaharuan or Renewed BANI was launched in Indonesia. Its name is very similar to that of the already existing arbitration centre, BANI. Up to now, BANI has been regarded as the most prominent Indonesian arbitration institution.
On 30th August 2016, the Financial Services Authority issued Circular Letter No.31/SEOJK.05/2016 on Fit and Proper Test for Financial Services Institutions Primary Parties which took effect on the same date. Insurance companies that are in the midst of preparing a FPT application will need to restart the application process.
The Financial Services Authority recently issued a new rule on annual reports for listed and public companies. To implement this new rule, on 3rd August 2016, OJK issued OJK Circular Letter No. 30/SEOJK.04/2016.
On 30th August 2016, the Financial Services Authority issued Circular Letter No. 32/SEOJK.05/2016 on the distribution channel of insurance products in cooperation with banks. The regulation came into effect on 1st September 2016.
To support the development of power plants in Indonesia, the government has introduced regulation MEMR No. 19/2016, which is intended to boost the country’s electricity capacity and help achieve its national energy policy target.
The issuance of Presidential Instruction 3/2016 followed the announcement of the government’s “one million houses” programme aimed at building a million houses for lower-income families. Following its issuance, developers reported the same challenges in obtaining the necessary licenses.
To encourage investors to develop infrastructure projects using the PPP approach, PR 38/2015 allows government support in the form of what is called Viability Support, which is a financial contribution granted by the government.
There is no arbitration facility or process specifically designed to accommodate real estate matters under Indonesian law. Disputes related to real estate are treated in a similar manner as any other dispute in Indonesia.
There has been considerable confusion about whether employers in Indonesia are allowed to downsize a part of their workforce for efficiency reasons. Law No. 13 of 2003 regarding Employment allows a company to terminate employees when closing the company for efficiency reasons.
This new Patent Law will replace Law No. 14 of 2001 on Patents, and may come into effect at the end of August 2016. The new Patent Law will provide patent holders with some solutions to the shortcomings of the current patent framework and registration procedures.
The recently issued OJK Rule No. 26/2016 reduces the regulatory requirements for some capital market investment products so that Indonesian investors relying on the Tax Amnesty Law would consider investing their funds in those investment products.
The Financial Services Authority issued Regulation No. 27/POJK.03/2016 on Fit and Proper Test ("FPT") which took effect on 1st August 2016. The Regulation aims to harmonise all FPT requirements for Financial Services Institutions.
When the government introduced a number of recent economic policy packages in an effort to stimulate the economy, none of the policy packages focused on the franchising sector. The fact that no regulatory change occurred is noteworthy.
The Indonesian Government recently issued the long-awaited and anticipated Tax Amnesty Law (Law No. 11 of 2016). The Tax Amnesty Law eliminates the principal tax debt and administrative sanctions as well as providing no-examination of tax crimes.
Indonesian President Joko Widodo has strengthened regulatory and enforcement functions in the environmental sector by integrating two previously separate but interlinked departments to become the Ministry of Environment and Forestry.
In 2013, the Indonesian government first introduced a solar power regulatory regime which required the government to publish solar power quota allocations for various parts of Indonesia. However, the Indonesian Supreme Court struck down this 2013 framework as being inconsistent.
Whistleblower protections in Indonesia primarily relate to criminal matters. The main legislation related to whistleblowers is the Witness and Victim Protection Law. However, companies inquire whether there are any whistleblowing rules under the Employment Law.
To increase the development of mutual funds in Indonesia, increase investor protection, and keep up with the developments in market practice, on 19th June 2016 the Indonesian Financial Services Authority ("OJK") enacted OJK Rule No. 23/POJK/.04/2016 on Mutual Funds.
The Government of Indonesia has recently issued a package of economic policies designed to remove irrelevant requirements and to deregulate and spur the growth of the Indonesian economy. This move has resulted in the elimination of several examination and licensing procedures.
On 31st August 2015, the Financial Services Authority issued several circular letters as a stimulus policy package to minimise the detrimental effects of unstable global financial conditions on the insurance and pension fund business sector.
The purpose of the BI Regulations on the rupiah was to stabilise the exchange rate in the face of ongoing depreciation of the currency.
Indonesia’s geothermal resources are among the largest in the world, with around 40 percent of the global geothermal resources, and the government has intensified its efforts to encourage geothermal power development.
The Electricity Supply Business Plan for 2016-2025 of the Indonesian state-owned power utility firm, PT PLN (Persero), has been issued and approved by the Minister of Energy and Mineral Resources through Decree No. 5899K/20/MEM/2016.
Indonesia’s Company Law (Law No. 40 of 2007 regarding Limited Liability Companies) regulates how companies operate their corporations in Indonesia. The Company Law has not been amended since it was enacted in 2007.
The 2016 Negative Investment List (“2016 DNI”) liberalises some areas of foreign investment in Indonesia, including foreign investment from ASEAN countries. It is also true that the 2016 DNI does not contain the dramatic changes that had been anticipated by some members of the foreign investment community.
Indonesia’s international investment policy has been in the spotlight since the Government of Indonesia conveyed in 2014 its intention to terminate all of its existing bilateral investment treaties.
The Minister of Religious Affairs, Minister of Manpower and Minister of State Apparatus Empowerment and Bureaucratic Reform have issued a joint decision on National Holidays and Collective Leave in 2017.
Law No. 37 of 2004 regarding Bankruptcy and Suspension of Debt Payment Obligations sets forth the requirements for filing a bankruptcy petition. The essential requirement is that there must be two or more creditors and at least one mature but unpaid debt for a bankruptcy action to be initiated against a debtor.
The Financial Services Authority has had regulatory authority over Indonesian banks, except Bank Indonesia (“BI”), since 31st December 2013, as stipulated under Law No. 21 of 2011 regarding the Financial Services Authority. BI is Indonesia’s central bank and maintains jurisdiction over the monetary supply.
The government has enacted a new Negative Investment List under Presidential Regulation No. 44 of 2016, which became effective on 18 May 2016 and revokes the previous Negative Investment List stipulated under Presidential Regulation No. 39 of 2014.
On 4th April 2016, the Minister of Energy and Mineral Resources issued a new regulation on coal pricing for mine mouth power projects, Regulation No. 9 of 2016 on the Procedures for the Supply and Determination of Coal Price for Mine Mouth Power Plants.
The Indonesian Centre for Arbitration and Alternative Dispute Resolution for Construction (BADAPSKI) in late 2015 held its first seminar to announce its existence as a dispute resolution body in the field of construction in Indonesia.
The Indonesian government views that the current Anti-Monopoly Law no longer fulfills the need to create a more established competitive regime in Indonesia. As such, it has introduced a draft version of a new Anti-Monopoly Law that brings about several major changes.
The regulation of airports is under the jurisdiction of the Ministry of Transportation (MOT). The most recent basic regulation on airport business activities is MOT Regulation No. 69 of 2013. In general, MOT Reg. 69/2013 was issued to set out the functions, hierarchy and classification of airports.
Business actors in Indonesia often raise the question whether there are any Indonesian legal restrictions on digitalising their businesses through websites or mobile applications. There is no specific Government of Indonesia law or regulation that deals with e-commerce activities in any depth or detail.
To boost the real estate investment trust market in Indonesia, the Financial Services Authority ("OJK") has issued OJK Regulation No. 19/POJK.04/2016 on Guidelines for Investment Managers and Custodian Banks that Manage Real Estate Investment Funds in the Form of a Collective Investment Contract.
Between September 2015 and March 2016, the Indonesian central government released 11 economic stimulus packages, which taken together are known as Jokowi’s Economic Package (Paket Kebijakan Ekonomi Jokowi). The following is a summary of the packages that have been released as of this article.
On 8th March 2016 the Minister of Employment issued Regulation No. 6 of 2016 on Religious Festivity Allowance for Employees in Companies. The regulation replaces Regulation No. PER-04/MEN/1994 of 1994 on the same matter.
On 16th March 2016, Indonesian President Joko Widodo announced a plan to simplify business licensing in Indonesia by revoking five existing business permits issued at the regional level.
Limited liability companies in Indonesia must hold an annual general meeting of shareholders (AGMS) at least six months after the end of their financial year. The AGMS must discuss and approve the annual report submitted by the Board of Directors, which must consist of a financial report among other details.
Insurance and reinsurance companies doing business in Indonesia must be licensed by the Financial Services Authority (OJK). The OJK must approve or reject the license application no later than 30 days after the complete application is received.
The prevailing intellectual property laws in Indonesia stipulate that it is mandatory to record an IP license agreement with the Directorate General of IP. In the absence of recordal, an IP license agreement is deemed to be not binding on any third party.
In late 2015, the Indonesian Minister of Finance issued a regulation to encourage the growth of real estate investment funding in the form of Collective Investment Contracts.
On 11th February 2016, the Government announced a tenth economic package. The announcement outlines the principles that will be adopted in the new Presidential Regulation on Negative List of Investments in Indonesia.
Through the recent issue of Presidential Regulation No. 4 of 2016 on Acceleration of Power Infrastructure Development, Indonesia appears set to address the bottlenecks that have been holding back the progress of power generation projects.
The Insurance Law, enacted in 2014, introduced various new provisions; among others, the concept of a controller being held liable for an insurance company's liabilities, the spinning off of sharia business units, and the requirement that the Indonesian shareholder must be an Indonesian citizen.
According to numerous media reports, the Indonesian government is in the process of revising the Negative Investment List, commonly known as the DNI, as contained in Presidential Regulation No. 39 of 2014.
The Indonesian government has issued Government Regulation No. 21 of 2015 regarding Procedures to Register Fiduciary Security and Fees to Draw Up a Fiduciary Security Deed (“GR 21/2015”). GR 21/2015 revokes GR No. 86 of 2000 regarding the same topic.
In seeking to address previously ambiguous legislation, Indonesia’s government has introduced a new regulation which stipulates that foreigners who hold a legal stay permit are allowed to own homes and apartment units in Indonesia.
On 22nd December 2015, the Indonesian Financial Services Authority ("OJK") issued OJK Rule No.32/POJK.04/2015 and OJK Rule No.33/POJK.04/2015 which together introduced several significant changes to rights issues in Indonesia.
The Indonesian Financial Services Authority (Otoritas Jasa Keuangan, or OJK) enacted a rule on the implementation of public companies' corporate governance guidelines which set a new standard of corporate governance practice for public companies.
On 23rd December 2015, the Ministry of Trade finally issued a regulation which restores the capability of holders of Producer Importer Identification Numbers to import manufactured goods as complementary goods, test market goods, and goods for after-sales services.
As part of the second economic stimulus package introduced by the government last September aimed at boosting the country's economy, the government issued Government Regulation No. 85 of 2015 which amends Government Regulation No. 32 of 2009 on Bonded Storage Places ("Regulation 85"). Regulation 85 introduces the concept of Bonded Logistics Centres as one type of Bonded Storage Places in Indonesia.
The Indonesian Minister of Energy and Mineral Resources recently enacted Regulation No. 38 of 2015 regarding Expediting Non-Conventional Oil and Gas Operations, which came into effect on 2nd November 2015.
For the past five years, the Ministry of Energy and Mineral Resources has sought to tidy up historic anomalies in the issuance of mining business permits (IUPs). Against this background, it has been recently floated in the media that the MEMR may soon issue a regulation to sort out problematic IUPs.
With regard to non-competition following the period of employment, employers may wish to include non-competition and non-solicitation clauses in their employment contracts and Company Regulations. However, the enforceability of such post-employment constraints is less clear.
After the enactment of Minister of Trade Regulation No. 70/M-DAG/PER/9/2015 on Importer Identification Number, the Ministry of Trade recently issued a draft of a new regulation that may restore the previous exemption (API-P holders can import finished goods) which had been removed by Regulation 70.
Restrictions on foreign shareholders in Indonesia are set out in the Negative Investment List contained in Presidential Regulation No. 39 of 2014 outlining the list of business fields that are closed and business fields that are open with requirements for investment.
Employers in Indonesia regularly carry out background checks on applicants. Background checks are not expressly regulated by Indonesian employment laws, and certain background checks are subject to the consent of the applicant in practice.
On 10th November 2015, the Minister of Finance issued Regulation No. 200/PMK.03/2015 on the Tax Treatment of Taxpayers and Taxable Entrepreneurs That Use a Certain Collective Investment Contracts Scheme for the Finance Sector. Under this regulation, the Minister of Finance provides several tax facilities to Real Estate Investment Funds.
Despite the slowing economy, M&A activity picked up generally towards the end of 2014, although not specifically involving public companies. This legal update provides an overview of laws on public mergers and acquisitions in Indonesia, covering the primary means of obtaining control of a public company.
Bank Indonesia recently issued Bank Indonesia Regulation No. 17 of 2015, which requires cash and non-cash domestic transactions to use Indonesian rupiah, and Regulation 16/21 requires borrowers of offshore loans to comply with hedging, liquidity and credit rating requirements in certain instances.
The newly released Government Regulation No. 78 of 2015 regarding Wages introduces several important changes, notably those concerning the calculation of provincial minimum wages and the requirement that all employees in Indonesia be paid in rupiah.
As part of phase 2 of the Indonesian Government's economic stimulus package, improving the investment climate for both domestic and foreign investments, and to support the one roof investment services, the head of the BKPM has just issued Regulation No. 16 of 2015 on Guidelines and Procedures for Capital Investment Facilities.
Indonesia’s Ministry of Manpower has issued Regulation No. 35 of 2015, which serves as an amendment to Regulation No. 16 of 2015 on the Procedure for the Utilization of Foreign Manpower, and brings about changes covered in this legal update.
As part of the government's economic deregulation package issued on 9th September 2015, the Ministry of Trade has issued another new regulation on imports. This new regulation removes the provision which allowed holders of Producer Importer Identification Numbers to import certain industrial/finished goods.
In September and October this year, the Indonesian government announced economic policy packages aimed at creating a conducive macroeconomic environment, hence boosting the country’s economic growth that slowed in the second quarter due to global economic conditions.
Based on officials from the Ministry of Employment ("MOE") and actions recently taken by the MOE, it appears that the MOE has started to implement Minister of Employment Regulation No. 16/2015 on Guidelines for the Utilisation of Foreign Manpower.
Four years after the issuance of the coal benchmark price, the Government of Indonesia has issued a formula for calculating the monthly benchmark price for base and precious metals.
Any vessel of at least 7 gross tonnes can be registered under the Indonesian flag including offshore drilling rigs and mobile offshore drilling units. Companies seeking to obtain Indonesian nationality for their vessels must comply with Indonesian laws and regulations related to the ownership and operation of the vessel.
To increase state revenue from the mining sector, the Government of Indonesia has imposed a new final income tax on any sale of minerals and coal as regulated under Minister of Finance Regulation No. 107/PMK.010/2015.
The Ministry of Trade amended Regulation No. 78/M-DAG/PER/10/2014 on Provisions on Import of Forestry Products through the issuance of Regulation No. 07/M-DAG/PER/1/2015 effective 1st September 2015. The latest regulation introduces new restrictions and administrative requirements for the import of forestry products.
As part of the government's plan to boost investment in Indonesia, the Ministry of Finance issued Minister of Finance Regulation No. 159/PMK.010/2015 on Income Tax Reduction Facility offering a corporate income tax reduction of 10 – 100% applicable for five to 15 years.
The most common option for an overseas company as a foreign investor to establish a presence in Indonesia is by setting up a limited liability company (Perseroan Terbatas (PT)) with foreign ownership (PT PMA).
The newly issued Indonesian Ministry of Manpower Regulation No. 16 of 2015 has replaced the contentious Minister of Manpower Regulation No. 12 of 2013, but in doing so created new requirements for foreign directors and commissioners of local companies to obtain a work permit.
The main legislation for insurance and reinsurance businesses in Indonesia is the newly enacted Insurance Law, issued on 17th October 2014. This regulation introduced several significant changes to the sector with regards to subjects such as local shareholding requirements.
The Indonesian government recently issued Presidential Regulation No. 69 of 2015 regarding Visitor Visa Exemptions (PR 69/2015) to improve the relationship between Indonesia and other countries by waiving the visa requirement for visitors from certain countries to enter Indonesia.
With increased interest in Indonesia and the impending completion of the ASEAN Economic Community, foreign investors are looking for a means to do business in Indonesia. SSEK discusses the revised Negative Investment List, the impact of the ASEAN Free Trade Area on Indonesia and Bilateral Investment Treaties.
Indonesia’s central bank, Bank Indonesia, recently issued BI Regulation No. 17/3/PBI/2015 regarding the Mandatory Use of the Rupiah within the Republic of Indonesia, which restricts the use of foreign currency in domestic transactions conducted within Indonesian territory.
The Indonesian government appears to be getting serious about stripping regents of the authority to issue mining licenses. The government took the first steps in this direction with Minister of Energy and Mineral Resources Regulation No. 27 of 2013.
This legal update looks at some of the regulatory changes that have been introduced since the Financial Services Authority (OJK) took over supervision of the capital markets, non-bank financial institutions and banking sectors prior to 2014.
The Financial Services Authority (Otoritas Jasa Keuangan or “OJK”), the financial services supervisory body in Indonesia, issued more than 30 regulations in 2014 covering capital markets, banks and non-bank financial institutions with the goal of developing the country's financial sector.
The 2014 Negative Investment List allows investors from ASEAN countries to hold up to 60% share ownership in Indonesian shipping companies engaged in sea transportation activities, but this provision is inconsistent with laws requiring JV shipping companies to be majority-owned by an Indonesian entity.
Foreign parties that wish to invest in Indonesia directly must follow the rules for FDI in the relevant business sector. For the advertising and marketing sector, international entities are subject to a host of regulations including limitations to foreign investment mandated by the Negative Investment List.
With the intention to improve the development of PPP projects in Indonesia and to make PPP arrangements more appealing to investors, the Government recently issued Presidential Regulation No. 38 of 2015 regarding Cooperation between the Government and Enterprises in Infrastructure Procurement.
Indonesia’s oil and gas sector is regulated mainly by Law No. 22 of 2001 regarding Oil and Natural Gas, which grants the government the exclusive rights to oil and gas exploitation and requires all private companies wishing to explore for and exploit oil and gas resources to enter into cooperation contracts.
Compliance is an important issue for foreign investment companies doing business in Indonesia. As international organizations, foreign investment companies are not only required to comply with the laws and regulations of the country of origin of their parent companies but also with relevant laws and regulations in Indonesia.
Defamation under Indonesian law involves the issuance of a defamatory statement that causes a person to suffer harm. Chapter XVI of the Indonesian Criminal Code governs both slander and libel in providing details on six different types of defamation, as is explained in this legal update.
Indonesia enacted a new Condominium Law in 2011 which replaced Law No. 16 of 1985 but has not yet been formally implemented. This legal update provides insights into the current regulatory environment and the challenges faced by developers and prospective homeowners amid continued uncertainty.
In 2013, the West Jakarta District Court issued a groundbreaking decision that captured the attention of the business community in stipulating that the Indonesian language must be used in commercial agreements with Indonesian businesses and agencies.
Indonesia’s mining industry remains in flux. On 14th October 2014, the Indonesian Government issued the third amendment to Government Regulation No. 23 of 2010 regarding the Implementation of Mineral and Coal Mining Business Activities and in doing so introduced revised divestment requirements.
Food export activities in Indonesia can be carried out by individuals, institutions and business entities. This legal update provides a comprehensive overview of the different classifications for export goods, as well as relevant licensing procedures and regulations.
With a population of 250 million, Indonesia is an attractive country for investors interested in the distribution, retail and franchise sectors. Given this context, this legal update provides an overview of the latest changes to franchising regulations issued by the Ministry of Trade.
Indonesia’s Construction Services Development Institute (LPJK) in June 2014 issued LPJK Regulation No. 5/2014 regarding Integrated Construction Services Registration, which amends the requirements for the issuance of Business Entity Certificates (SBU) for integrated construction service companies.
This update provides a comprehensive overview of the legal framework regulating oil activities in Indonesia, including Law No. 22 of 2001 regarding Oil and Natural Gas as well as revisions to Government Regulation No. 35 of 2004 on the topic of upstream business activities.
Indonesia does not have an overarching anti-discrimination law; rather, a patchwork of laws and sector-specific regulations prohibit discrimination and encourage equality. Given the context of Indonesia’s gains in its equality rankings, this update provides an overview of the relevant laws.
The Indonesian Government has released the long-awaited New Negative Investment List, issued under Presidential Regulation No. 39 of 2014. Among the major changes from previous regulations is an increase in maximum foreign ownership levels in several key industries, including the health sector.
Indonesia’s Agrarian Law provides that foreigners can only acquire a right to use (hak pakai) title for land if they reside in Indonesia. This update takes stock of the current legal framework governing foreign investment in Indonesian real estate and provides an overview of the expected challenges.
Dwindling production of traditional energy sources such as oil and gas has the government seeking alternatives to maximize national energy production. To this end, Indonesia in 2014 introduced provisions to better manage geothermal energy through Law No. 21 of 2014.
Bank Indonesia (BI) recently issued several regulations related to foreign exchange transactions by Indonesian banks. These regulations update existing regulations issued by BI with the goal of creating a healthy foreign exchange market in Indonesia, as is explained in this brief summary.
Population: 255 million (estimated, 2015)
Currency: Indonesian Rupiah
Nominal GDP: $895 billion USD (IMF, 2015)
GDP per capita: $3,415 USD at Current Prices (IMF, 2015)
GDP Growth: 4.7% (2015)
External Debt: 34.77% of GDP (BI, Q3 2015)
Ease of Doing Business: 109/189 (WB, 2015)
Corruption Index: 107/175 (TI, 2014)