No

Regulation

Summary

1.

Law No. 11 of 2020 on Job Creation (“Law 11/2020”)

Enforcement date:

5 October 2020

• Law 11/2020 contains a total of 1,187 pages, 11 clusters, 15 sections, and 186 articles that amends a total of 77 prevailing laws.
• We note that Law 11/2020 has amended among others; (i) Law No. 25 of 2007 on Investment, (ii) Law No. 40 of 2007 on Limited Liability Company, (iii) Law No. 13 of 2003 on Manpower, and (iv) Law No. 40 of 2004 on National Social Security System, etc.
• We note that the implementing regulations in the form of 35 (thirty-five) Government Regulations and 5 (five) Presidential Regulations of the Omnibus Law1 will be issued in the following 3 months from its date of promulgation.
• Please see our previous publications regarding Law 11/2020 here and here.

2.

Indonesia Investment Coordinating Board/Badan Koordinasi Penanaman Modal (“BKPM”) Regulation No. 6 of 2020 on Investment Control Guidelines and Procedures (“BKPM Regulation 6/2020”)

Enforcement date:

13 December 2020

• The regulation stipulates that the submission of Investment Activity Reports/Laporan Kegiatan Penanaman Modal (“LKPM”) should now be completed through the Online Single Submission (“OSS”) system, instead of the Electronic Investment Information and Licensing Services/Sistem Pelayanan Informasi dan Perizinan Investasi Secara Elektronik (SPIPISE), as previously required,
• The following business entities are required to submit LKPM, namely: (i) Foreign Company Representative Offices/Kantor Perwakilan Perusahaan Asing (KPPA); (ii) Foreign Trading Company Representatives/ Kantor Perwakilan Perusahaan Perdagangan Asing (KP3A); (iii) Foreign Construction Service Enterprise Representative Offices/Kantor Perwakilan Badan Usaha Jasa Konstruksi Asing (KP-BUJKA); and (iv) Foreign Oil-and-Gas Representative Offices/Kantor Perwakilan Asing (KPA Migas).
• Businesses that fulfilled the following investment values are required to submit LKPM: (i) IDR50 Million – IDR 500 Million; (ii) IDR 500 Million – IDR 10 Billion; and (iii) more than IDR 10 Billion (Art. 10 (5) of BKPM Regulation 6/2020).
• The following businesses are not obliged to submit LKPM: (i) Businesses with investment values less than IDR 50 million; (ii) Businesses operating within the oil and gas, banking, Non-bank financial institutions; and Insurance sector (Art. 10 (3) of BKPM Regulation 6/2020).

3.

Government Regulation No. 74 of 2020 on The Indonesian Sovereign Wealth Fund

Enforcement date:

15 December 2020

• The Indonesian Sovereign Wealth Fund/Lembaga Pengelola Investasi (“LPI”) is an Indonesian legal entity that is owned entirely by the government and has the authorities to: (i) Deposit funds in financial instruments; (ii) Carry out asset management activities; (iii) Cooperate with other parties, including trust-fund entities; (iv) Determine potential investment partners; (v) Provide and receive loans; and/or (vi) Administer assets.
• The capital of the LPI is set at IDR 75 Trillion and is sourced from the following: (i) State equity participation i.e. cash, state-owned properties, state receivables from or state shares in state-owned enterprises or other limited liability companies; and/or (ii) Other sources.
• The LPI’s assets originate from several sources, such as the LPI’s own capital, proceeds from businesses and asset development, etc. and their values may be increased in cooperation with third parties through: (i) The granting or receipt of the authority to manage; (ii)The establishment of joint-venture companies; and/or (iii) The implementation of other forms of cooperation.
• During the management of its assets, the LPI may: (i) Appoint investment managers; or (ii) Conduct investments by either establishing its own investment managed funds or through participation in investment managed funds established by third parties.

4.

Minister of Communications and Informatics (“MoCI”) Regulation No. 5 of 2020 on the Provision of Electronic Systems by the Private Sector (“MoCI Regulation 5/2020”)

Enforcement date:

24 November 2020

• All electronic system organizers/Penyelenggara Sistem Elektronik (“PSE”) operating within the private sector are required to register themselves to MoCI through the OSS system (Art. 2 jo. Art. 3 (2) of MoCI Regulation 5/2020).
• This obligation extends to all PSE which operate internet portals, websites, and applications that are used for specific purposes (the provision, management, and/or operation of trade in goods/services; the delivery of paid digital materials and content; search engines; etc.).
• Please note that this obligation also applies to any private PSEs that are established according to the laws of other countries or that are domiciled overseas (Art. 4 (1) of MoCI Regulation 5/2020).

  5.

Minister of Manpower (“MoM”) Regulation No. 18 of 2020 on the Amendment to Regulation of the Minister of Manpower No. 21 of 2016 on Decent Living Standards (“MoM Regulation 18/2020”)

Enforcement date:

9 October 2020

• This regulation replaces several components and types of decent living standards and simultaneously repeals and replaces Appendix I to Regulation of the Minister of Manpower No. 13 of 2002 on Decent Living Standard Components and Implementation in Stages, which previously listed components and types of decent living standards.
• The component of a decent living standard according to this regulation contains at least as follows: (i) Food and beverages; (ii) Clothing; (iii) Housing; (iv) Education; (v) Health; (vi) Transportation and Communications; and (vii) Recreation, Savings and Social Security (Note: Please refer to the Appendix of MoM Regulation 18/2020 for the complete elaboration of stipulated decent living standard)

6.

Head of Jakarta’s Manpower, Transmigration and Energy Agency Decree No. 3100 of 2020 on Criteria and Requirements for Applications to Implement Payments of the 2021 Provincial Minimum Wages Which Remain the Same as 2020 Provincial Minimum Wage for Entrepreneurs, Companies and/or Employers That Are Being Economically Affected by Corona Virus Disease 2019 (COVID-19)

Enforcement date:

23 November 2020

• Businesses, corporations, and/or employers may pay the 2021 minimum wage at the 2020 provincial minimum wage rate amounting to IDR4,276,349.906, if they are being economically affected by the COVID-19 pandemic and if they operate within certain business sectors, as determined under this decree.
• In order to obtain this facility, the relevant parties must submit their applications to the Governor of Jakarta through the Head of Jakarta’s Manpower, Transmigration, and Energy Agency at the latest of 18 December 2020.
• If applications are approved, then the relevant businesses, corporations, and/or employers may implement the 2020 provincial minimum wage rate starting 1 January 2021 in relation to employees who have worked for the relevant employers for periods of less than one year.

7.

Governor of West Java Regulation No. 561/KEP.774-YANBANGSOS/2020 on 2021 Regency/City Minimum Wages for the Province of West Java

Enforcement date:

1 January 2021

• The West Java Governor has decided minimum wage for year 2021 which covers  27 (twenty seven) regencies/cities within the province of West Java. Currently, there are 10 regencies/cities implement the same rates as the rates in 2020, specifically: (i) Bogor City - IDR4,169,806; (ii) Cianjur Regency - IDR2,534,798; (iii) Sukabumi City - IDR2,530,182; (iv) Tasikmalaya City -  IDR2,264,093; (v) Tasikmalaya Regency - IDR 2,251,787; (vi) Garut Regency - IDR 1,961,085; (vii) Kuningan Regency - IDR 1,882,642; (viii) Ciamis Regency - IDR 1,880,654; (ix) Pangandaran Regency - IDR1,860,591; and (x) Banjar City - IDR 1,831,884.
• It increases the 2021 minimum wage for 17 (seventeen) other regencies/cities within the province of West Java, among others: (i) Karawang Regency: IDR 4,798,312 (previously IDR 4,594,324); (ii) Bekasi City: IDR 4,782,935 (previously IDR 3,489,708); (iii) Bekasi Regency: IDR 4,791,843 (previously IDR 4,498,961); (iv) Depok City: IDR 4,339,514(previously IDR 4,202,105); (v) Bogor Regency: IDR 4,217,206 (previously IDR 4,083,670); (vi) Bandung City: IDR3,742,276 (previously IDR 3,623,778); (vii) Bandung Regency: IDR 3,241,929 (previously IDR 3,139,275); and (viii) Sukabumi Regency: IDR 3,125,444 (previously IDR 3,028,531).

8.

Presidential Regulation No. 103 of 2020 on Central Government Guarantees for Development Financing to Promote the National Economy and/or the National Economic Recovery Program (“PR 103/2020”)

Enforcement date:

26 October 2020

• The regulation stipulates that the Minister of Finance (“MoF”) to be representing the Indonesian Government and is responsible for the provision of guarantees which can be granted to financial service institutions and/or guarantee recipients (Art. 3 of PR 103/2020).
• The scope of funding that is eligible to receive government guarantees are as follows: (i) Funding for development in order to support the national economy; and (ii) Funding that is provided under the framework of the National Economic Recovery Program/Program Pemulihan Ekonomi Nasional (PEN Program) (Art. 2 (1) of PR 103/2020).
• In order to maintain the state budget and the sustainability of this program, the MoF may assign guarantee institutions to infrastructure sectors in order to offer guarantees through the provision of sovereign bonds and profit-sharing.

 9.

Presidential Regulation No. 114 of 2020 on the National Strategy for Financial Inclusion (“PR 114/2020”)

Enforcement date:

7 December 2020

• The objectives of the National Strategy for Financial Inclusion/Strategi Nasional Keuangan Inklusif (“SNKI”) comprises of the following: (i) Creation of financial inclusion in order to support a growing but stable financial system; (ii) Support for economic growth; (iii) Acceleration of poverty reduction; and; and (iv) Reduction of disparities between individuals and between regions so as to better realize the welfare of Indonesian citizens (Art. 1 point 1 of PR 114/2020).
• Certain areas that should be prioritized during the implementation of SNKI are as follows: (i) Expansion of and improvement of the ease of access to formal financial services across all levels of society, including through micro-scale financial institutions and micro-scale waqf banks; (ii) Development of internet-based digital financial services able to reach all regions of Indonesia; (iii) Strengthening of the financial services sector through the exploration of potential within the non-bank financial services sector, which includes insurance, the capital market, pawnshops, and pension funds, so as to achieve a stable domestic financial system; and (iv) Strengthening of customer and consumer protections in order to ensure that citizens can easily, safely and comfortably access formal financing facilities and to increase overall public trust in the financial services industry.

 10.

Financial Services Authority/Otoritas Jasa Keuangan (“OJK”) Regulation No. 48/POJK.03/2020 on the Amendment to OJK Regulation No. 11/POJK.03/2020 on National Economic Stimulus as Countercyclical Policy to the Impact of the Outbreak of the Coronavirus Disease 2019 (“OJK Regulation 48/POJK.03/2020”)

Enforcement date:

3 December 2020

• In addition to debtors who are affected by the COVID-19 pandemic, sharia, conventional commercial banks, and rural banks (“Banks”), may now implement countercyclical policies in relation to their business units once they have secured the relevant approvals from the OJK.
• Banks that conduct credit/financing restructuring are required to submit the following reports: 1) Reports on credit/financing restructuring stimulus; and 2) Reports on the recapitulation of credit/financing restructuring stimulus, which was not required under the previous regulatory framework.
• The period for the implementation of countercyclical policies has now been extended from 31 March 2021 to 31 March 2022 (Art. 10 of OJK Regulation 48/POJK.03/2020).

11.

OJK Regulation No. 57/POJK.04/2020 on Securities Offers via Information-Technology Based Crowdfunding Services (“OJK Regulation 57/POJK.0/2020”)

Enforcement date:

11 December 2020

• This new regulation stipulates that issuers can be in the form of limited liability companies or other types of business entities, such as cooperatives or private companies (Art. 1 Point 7 of OJK Regulation 57/POJK.04/2020).
• It has broadened the scope of securities that may be offered through crowdfunding services, to be: (i) Equity-based securities (including any non-shares which are converted into shares); (ii) Debt-based securities; and (iii) Sharia-based bonds.
• Organizers of equity crowdfunding services may provide systems for investors for the trading of securities of issuers which are sold through equity crowdfunding services.

 12.

MoF Regulation No. 143 /PMK.03/2020 on the Granting of Tax Facilities for Goods and Services Required for the Mitigation of the Corona Virus Disease 2019 Pandemic and the Extension of Income-Tax Facilities Based on Regulation of the Government No. 29 of 2020 on Income-Tax Facilities for the Mitigation of Corona Virus Disease 2019 (COVID-19)

Enforcement date:

1 October 2020

• This regulation extends the tax period for the granting of value-added tax/Pajak Pertambahan Nilai (“PPN”) facilities from April – September 2020 to April – December 2020.
• This regulation broadens the recipients of PPN incentives through the addition of the following parties: (i) Imports or acquisitions of vaccines and/or raw drug materials undertaken by pharmaceutical industries that produce vaccines and/or drugs for the mitigation of COVID-19; and (ii) Taxpayers who obtain vaccines and/or drugs in order to mitigate COVID-19 from the pharmaceutical industries.
• The government will bear any outstanding PPN for: (i) Imports of materials to be used in the production of vaccines and/or drugs aimed at the mitigation of COVID-19 by the pharmaceutical industries outlined above; and (ii) Transfers of materials for said production from Taxable Entrepreneur/Pengusaha Kena Pajak (PKP) to said pharmaceutical industries. However, these pharmaceutical industries are required to first obtain recommendation letters from Indonesia’s National Board for Disaster Management/Badan Nasional Penanggulangan Bencana (BNPB).
• The pharmaceutical industries outlined above may also be exempt from the imposition of Article-22 Income Tax for imports and/or Article-22 Income Tax for the October 2020 - December 2020 tax period. Meanwhile, in terms of other parties, these facilities are now to be granted for the October 2020 - December 2020 tax period, extended from the previous deadline of September 2020.

 13.

MoF Regulation No. 137/PMK.02/2020 on the Stipulation of a Zero Tariff for the Issuance of Certificates of Origin Applicable within the Ministry of Trade due to the Corona Virus Disease 2019 Pandemic (“MoF Regulation 137/PMK.02.2020”)

Enforcement date:

10 October 2020

• The MoF has now set a zero tariff for non-tax state revenue in relation to the issuance of certificates of origin in order to mitigate the negative impacts of COVID-19 pandemic on the export sector. This zero-tariff will be available to all exporters between 10 October 2020 and 31 December 2020 (Art. 4 of MoF Regulation 137/PMK.02.2020).
• The new zero-tariff certificates of origin form may only be used for export activities which are undertaken until 31 December 2020 and the procedure for the utilization of this form is as addressed under Minister of Trade Regulation No. 37 of 2018 on Procedures for the Payment of State Revenue for the Electronic Issuance of Certificates of Origin for Goods Originating from Indonesia.

14.

MoF Regulation No. 176/PMK.04/2020 on the Amendment to MoF Regulation No. 67/PMK.04/2018 on the Trade in Excisable Goods for Which Excise is Paid Through the Attachment of Excise Stamps or the Affixation of Other Excise Payment Marks.

Enforcement date:

12 November 2020

• Electric-cigarette cartridges (i.e. integrated liquids and heaters) have been acknowledged as excisable goods under the category of other processed tobacco products/Hasil Pengolahan Tembakau Lainnya (HPTL). Each package is required to contain at least two cartridges.
• Each package intended for retail sale of excisable goods must be in direct contact with the excisable goods and must only be openable on one side of the packaging.
• A decree on excise tariff determination will be revoked if factory entrepreneurs or importers violate packaging content thresholds that apply to any of the following products: (i) All types of domestic or imported tobacco products intended for domestic sale; and (ii) Beverages containing ethyl-alcohol that are either produced in the country or imported for domestic sales.

 15.

Minister of Energy and Mineral Resources (“MoMR”) Regulation No. 17 of 2020 on Third Amendment to Regulation of the Minister of Energy and Mineral Resources No. 25 of 2018 on Mineral and Coal-Mining Businesses.

Enforcement date:

23 November 2020

• MoMR Regulation 17/2020 provide extension of the export period for several Indonesian mining products as follows: (i) Results of processing for the holders of Mining Business Licenses/Izin Usaha Pertambangan (“IUP”) and Metal Mineral Production Operation Licenses/Izin Usaha Pertambangan Khusus (“IUPK”). Metal mineral production operations have now been extended until 10 June 2023; (ii) Processing products for the holders of processing/refinery business licenses which were issued prior to the issuance of the Government Regulation No. 1 of 2017 have now been extended until the export approval period is over; (iii) Mud Anode and residues produced during copper refining processes for the holders of Processing/Refinery Business Licenses has now been extended until 10 June 2023; and (iv) Washed bauxite with AO content ≥ 42% for the holders of IUP for Production Operations who have or who are currently in the process of establishing refinery facilities has now been extended until 10 June 2023.
• Holders of IUP for Production Operations are permitted to revise their refinery facility development plans provided that said revisions are verified by an independent verifier after first being submitted to the Director-General of Minerals and Coal by no later than 21 February 2021.

 16.

Minister of Maritime and Fisheries (“MoMF”) Regulation No. 58/PERMEN-KP/2020 on Fish Capture Businesses (“MoMF Regulation 58/2020”)

Enforcement date:

30 November 2020

• Through this regulation, a company may engage in fish capture business through the utilization of fishing vessels and/or fish transportation vessels with cumulative sizes of 300 gross tonnages sand above (Art. 3 (1) of MoMF Regulation 58/2020). However, it may only operate a maximum of 50 units of fishing vessels and/or fishing vessels cumulatively within the State Fisheries Management Territory of the Republic of Indonesia/Wilayah Pengelolaan Perikanan Negara Republik Indonesia (“WPPNRI”) and the cumulative size of these units must not exceed 10,000 gross tonnages (Art. 3 (2) of MomF Regulation 58/2020).
• In addition to small-scale fishermen, any parties aiming to engage in fish capture business within the WPPNRI and/or in the marine territory must first secure the necessary licenses, specifically: (i) Fisheries Business License, which is valid for 30 (thirty) years; (ii) Fish Capture License, which is valid for one year; and (iii) Fish Transportation License, which is also valid for 1 year. Meanwhile, small-scale fishermen must secure a Fishing Vessel Registration Certificate (TDKP), which will remain valid as long as said fishermen continue to engage in the capture of fish (Art. 11 of MoMF Regulation 58/2020).

17.

Minister of Industry (“MoI”) Regulation No. 30 of 2020 on Technical Criteria for Designated Industrial Area (“MoI Regulation 30/2020”)

Enforcement date:

8 October 2020

• Designated Industrial Areas/Kawasan Peruntukan Industri (“KPI”) will be determined based on the following criteria: (i) Must be areas that can be used for industrial activities; (ii) Must not disturb or damage the environment; and/or (iii) Must not make any changes to areas of productive land (Art. 3 of MoI Regulation 30/2020).
• MoI is responsible for establishing technical criteria of KPI (Art. 4 of MoI Regulation 30/2020)
• The government may also consider the following additional criteria: (i) Availability of energy and electricity; (ii) Telecommunications networks; (iii) Residential density; and/or (iv) Conformity with regional industrial development plans (Art. 11 of MoI Regulation 30/2020).

18.

MoI Regulation No. 46 of 2020 on Green Industry Standards for the Ceramic Household Equipment Industry (“MoI Regulation 46/2020”)

Enforcement date:

10 November 2020

• Green Industry Standards/Standar Industri Hijau (“SIH”) for the ceramic household equipment industry comprise technical requirements and management requirements which refer to the following Indonesian National Standards/Standar Nasional Indonesia (“SNI”): (i) SNI 7275-2008 for glazed ceramic tableware food and drinking equipment and its revision; (ii) SNI 12-2124-1996 for ceramic drinking equipment for tea/coffee of semi-porcelain and porcelain types and its revision; and (iii) SNI 12-2512-2580-1996 for ceramic tableware for hotels of semi-porcelain and porcelain types and its revision (Appendix of MoI Regulation 46/2020) .
• Businesses that are already in compliance with the above SIH may apply for green industry certification through the procedure set out under MoI Regulation No. 39 of 2018 on Procedures for Green Industry Standards.

 19.

MoI Regulation No 56 of 2020 on the Conformity Assessment Agency for the Mandatory Implementation and Supervision of the Indonesian National Standard for Paper and Cardboard for Food Packaging

Enforcement date:

22 September 2020

• This regulation acknowledges that Non-Accredited Product Certification Agencies/Lembaga Sertifikasi Produk (“LSPro”) are permitted to award SNI certification for paper and cartons used for food packaging. Said LSPro comprises of the following parties: (i) LSPro Balai Sertifikasi Industri; (ii) LSPro Balai Besar Kimia dan Kemasan; (iii) LSPro Balai Besar Pulp dan Kertas; and (iv) LSPro PTSucofindo ICS, among others.
• Acknowledges that non-accredited examination laboratories (“Laboratories”) are permitted to conduct quality conformity assessments of paper and cartons used for food packaging in accordance with SNI provisions.
• LSPro and Laboratories are required to implement the following activities: (i) Send accreditation-related documentation to the National Accreditation Committee/Komite Akreditasi Nasional (KAN) by 10 May 2021; and (ii) Periodically report accreditation progress to the Head of the Industrial Research and Development Agency/Badan Penelitian dan Pengembangan Industri (BPPI) on a six-monthly basis.
• LSPro and Laboratories are also required to meet various eligibility requirements pursuant to SNI8218-2015 by 10 November 2022 otherwise their appointments as official certification agencies will be revoked.
• During working periods, LSPro and Laboratories must also report their working performance to the Director-General of Industrial Development and the Head of the BPPI. Any non-compliance with these provisions will result in the revocation of appointment certification/Penunjukan Sertifikasi.

20.

Minister of Health Decree No. HK.01.07/MENKES/9860/2020 on the Determination of Vaccine Types for the Implementation of Corona Virus Disease 2019 (COVID-19) Vaccinations

Enforcement date:

3 December 2020

• Determines that the Corona Virus Disease 2019 (“COVID-19”) vaccines which are permitted for use within Indonesian territory are produced by the following parties: 1) PT Bio Farma (Persero); 2) AstraZeneca; 3) TheChina National Pharmaceutical Group Corporation (Sinopharm); 4) Moderna; 5) Pfizer Inc. and BioNTech; and6) Sinovac Biotech Ltd. However, the government may alter this list of vaccine producers at a later date upon the issuance of a recommendation on immunization by the Indonesian Technical Advisory Group and through a consideration of the opinions of the Committee for Covid-19 Mitigation and National Economic Recovery.
• All of the above-listed COVID-19 vaccines must either currently be in the third phase of clinical testing or must have already completed the third phase of clinical testing. However, any vaccines that meet all of the above requirements will only be cleared for use once they have secured a distribution permit or emergency use authorization clearance from the National Agency for Drug and Food Control/Badan Pengawas Obat dan Makanan (BPOM).
• A mass public vaccination program will be organized by the Minister of Health. Meanwhile, individual vaccinations will be conducted under the authority of the Minister of State-Owned Enterprises.
• Please see our previous publication regarding this matter here.