No

Regulation

Summary

1.

Indonesia Investment Coordinating Board/Badan Koordinasi Penanaman Modal (“BKPM”) Regulation No. 4 of 2021 on Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities (“BKPM Regulation 4/2021”).

Enforcement date:

2 June 2021

• BKPM Regulation 4/2021 sets up various provisions on business-licensing services which address the following areas: (i) Data relating to business actors and their business operations; (ii) Issuance of risk-based business licenses; (ii) Issuance of business licenses; (iv) Issuance of risk-based business licenses to micro- and small-scale enterprises/usaha mikro dan kecil (“UMK”); (v) Revision of business data; (vi) Business development; and (vii) Business mergers, consolidations, and dissolutions.
• In taxation matters, BKPM Regulation 4/2021 also provides various provisions regarding granting of fiscal and non-fiscal facilities.

2.

BKPM Regulation No. 5 of 2021 on Guidelines and Procedures for the Supervision of Risk-Based Business Licensing (“BKPM Regulation 5/2021”)

Enforcement date:

2 June 2021

• BKPM Regulation 5/2021 stipulates that investment supervisions shall be implemented upon the business actors have secured business licensing documents. The occurrence of said supervisions shall be based on the risk level of business and the compliance of the relevant business actors.
• In general, the supervision means comprises of: (i) Routine supervisions, which can be implemented through the submission of reports on the development of business activities and field inspections; and (ii) Incidental supervisions, which can only be implemented under certain conditions (Art. 28 (3) of BKPM Regulation 5/2021).
• Business actors are required to submit Investment Activity Reports/Laporan Kegiatan Penanaman Modal (“LKPM”) through the Online Single Submission (“OSS”) system. However, there are certain exemption that applies for UMK and business actors on certain sectors i.e., (i) upstream oil and gas, (ii) banking, (iii) non-banking financial services, and (iv) insurance (Art. 32 (5) of BKPM Regulation 5/2021).

3.

Minister of Law and Human Rights (“MoLHR”) Regulation No. 21 of 2021 on Terms and Procedures for the Registration of the Establishment of, Amendments to and Dissolution of Company Legal Entity (“MoLHR Regulation 21/2021”)

Enforcement date:

30 April 2021

• Registration of establishment, amendments to the articles of association and data, or dissolution of Non-Individual Company or individual legal entities (“Individual Company”) must be submitted electronically to the MoLHR via the Legal Entity Administration System/Sistem Administrasi Badan Hukum (“SABH”). All applications for the registration of the establishment of Non-Individual Company should be submitted through notaries.
• Individual Company must change its legal-entity status to Non-Individual Company should one of the following events occur: (i) number of shareholders are now more than one person; and/or 2) does not fulfill the criteria for micro- and small-scale enterprises, as stipulated under the relevant laws and regulations.
• Individual Company must submit financial reports to the Minister via the SABH within six months of the most recent current accounting period.

4.

Minister of Finance (“MoF”) Regulation No. 49/PMK.02/2021 on Types and Tariffs of Non-Tax State Revenue Applicable at the Directorate-General of Legal Administrative Affairs at the Ministry of Law and Human Rights (“MoF Regulation 49/2021”)

Enforcement date:

19 May 2021

• MoF Regulation 49/2021 stipulates that Non-Tax State Revenue/Penerimaan Negara Bukan Pajak (“PNBP”) which are applicable at the Directorate-General of Legal Administrative Affairs (“Directorate-General”) comprises of:

1. Revenue from Legal Services (e.g., registration for the establishment, amendments, data update, registration of dismissal of micro- and small-scale enterprises, etc.); and
2. Revenue from Notarial Services (e.g., notary training registration, leave application, etc.) (Art. 1 of MoF Regulation 49/2021).

• MoF Regulation 49/PMK.02/2021 sets out capitalization criteria for MSE specifically: (i) The maximum working capital of MSE cannot exceed IDR1 billion, exclusive any land and buildings used by businesses; and (ii) The working capital of MSE should be between IDR1Billion and IDR5Billion, exclusive land and buildings of the business (Art 3 (3) of MoF Regulation 49/2021).
• Any application must be submitted electronically via the information system of the Directorate-General by enclosing minimum applicant data as follows: (i) Name; (ii) Address of domicile; (iii) Phone number and email address; and (iv) Type of service requested (Art. 4 (2) of MoF Regulation 49/2021).

5.

Government Regulation (“GR”) No. 59 of 2021 on Implementation of Indonesian Migrant-Worker Protections (“GR 59/2021”)

Enforcement date:

7 April 2021

• GR 59/2021 sets our protections that are provided for Indonesian migrant workers (“Workers”) prior to their departure consist of the following: (i) Administrative protections, including guarantee over the validity and completeness of placement documents as well as clear stipulation of working conditions and requirements; and (ii) Technical protections, including the provision of social security as well as work training and education to improve their qualities (Art. 4 (1) of GR 59/2021).
• Protections for Workers during their working period overseas are provided by the official Indonesian representatives, which include the facilities for employment dispute settlement and repatriation. However, the companies that are in charge for the placement of the Workers overseas are still responsible to repatriate the Workers if their work agreements expire or if the Workers are terminated, pass away, suffer from accidents, are unable to continue their works due to sickness and/or other reasons which are disadvantageous to the Workers (Art. 13 (1) and (2) of MoM Regulation 59/2021).
• Workers may only be placed in countries that fulfill the following criteria: (i) Must possess laws and regulations on the protection of foreign workers; (ii) Must already enter into written agreement with Indonesian government; and/or (iii) Must possess social security and/or insurance systems that protect foreign workers.

  6.

Minister of Manpower (“MoM”) Regulation No. 5 of 2021 on Procedures for the Implementation of Work-Accident Security, Death Security, and Old-Age Benefit Programs (“MoM Regulation 5/2021”)

Enforcement date:

1 April 2021

• All employers are required to register their employees under the government Work-Accident Security/Jaminan Kecelakaan Kerja (“JKK”), Death Security/Jaminan Kematian (“JKM”) and Old-Age Benefit/Jaminan Hari Tua (“JHT”) programs run by the Social Security Agency for Employment (“BPJS Ketenagakerjaan”).
• The registration procedure comprehends of the following steps: (i) Completion and submission of the required forms to the BPJS Ketenagakerjaan; (ii) Issuance of membership numbers; (iii) Issuance of program membership certificates and membership cards to all employees registered by employers; and (iv) Issuance of BJPS Ketenagakerjaan membership cards to employees.

7.

MoM Regulation No. 6 of 2021 on Standards for Business Activities and/or Products for the Organization of Risk-Based Business Licensing Within the Manpower Sector (“MoM Regulation 6/2021”)

Enforcement date:

1 April 2021

• MoM Regulation 6/2021 sets out standards that apply to every and each of: (i) Business activities as classified under the Indonesian Standard Industrial Classification/Klasifikasi Baku Lapangan Usaha Indonesia (“KBLI”) (e.g., online worker placement activities (job portal) - KBLI 78104); and (ii) other business activities and/or products which have not been classified into KBLI but are related to the KBLI.
• The standards that apply to the business activities include as follows: (i) Scope; (ii) Terms and definitions; (iii) Business categorization; (iv) General business requirements; (v) Specific business requirements; (vi) Facilities; (vii) Human resources and organizational structures; (viii) Services; (ix) Product/process/service requirements; (x) Business management systems; and (xi) Conformity assessments and supervision.

8.

MoM Regulation No. 8 of 2021 on the Implementing Regulation of Government Regulation No. 34 of 2021 on the Utilization of Foreign Workers (“MoM Regulation 8/2021”)

Enforcement date:

1 April 2021

• MoM Regulation 8/2021 requires any employers who intend to employ foreign workers must secure validations of Plans for the Utilization of Foreign Worker/Rencana Penggunaan Tenaga Kerja Asing (“RPTKA”) (Art. 2 of MoM Regulation 8/2021).
• MoM Regulation 8/2021 introduces certain new types of RPTKA i.e. (i) RPTKA for worker who works within Special Economic Zones/Kawasan Ekonomi Khusus; and (ii) RPTKA that are not required to pay Utilization Compensation Funds/Dana Kompensasi Penggunaan TKA (“DKPTKA”), which are referred to as RPTKA for non-DKPTKA.
• Validations for any RPTKA will only be issued once the relevant DKPTKA payments have been completed, with the exception of RPTKA for non-DKPTKA, the validation for which will immediately be issued based on the results of a verification process.

 9.

GR No. 61 of 2021 on the Amendment to Government Regulation No. 43 of 2015 on Informants for the Prevention and Eradication of Money Laundering Crime (“GR  61/2021”)

Enforcement Date:

14 April 2021

• GR  61/2021 broaden the scope of informants within the financial-service providers' to be as follows: (i) Organizers of peer-to-peer lending services; (ii) Organizers of equity crowdfunding services; and (iii) Organizers of other technology-based financial-transaction services.
• GR  61/2021 requires other professionals who are not classified as providers of financial services or providers of other goods/services to also report certain transactions that are undertaken by their clients if said transactions are suspected of being linked to criminal activity.

10.

Financial Services Authority/Otoritas Jasa Keuangan (“OJK”) Circular Letter No. 13/SEOJK.05/2021 on the Implementation of Risk Management for Insurance Brokerage, Reinsurance Brokerage and Insurance Loss Appraisal Companies (“OJK Circular Letter 13/2021”)

Enforcement Date:

12 April 2021

• Brokerage, reinsurance brokerage, and insurance loss appraisal companies (“Companies”) are required to implement risk-management-related strategies, policies and procedures that encompass the following measures: (i) Implementation of risk management (i.e. active supervision of boards of directors and boards of commissioners, etc.); (ii) Implementation of risk management for each type of risk (strategic risk operational risk, legal risk, compliance risk and reputational risk); and (iii) Annual risk profile assessment.
• In order to create effective risk-management regimes, Companies should implement the following necessary steps: (i) Analyze their risk-management organization, strategy, policies and procedures, as well as their internal risk-management guidelines; (ii) Formulate plans aimed at improving their risk management; (iii)  Socialize their risk-management strategies, policies and procedures, as well as their internal risk-management guidelines, among their employees; and (iv) Ensure that their internal auditing systems are fully engaged in the monitoring, preparation, improvement, and implementation of their internal risk-management guidelines.

11.

Board of Governors of Bank of Indonesia (“BI”) Regulation No. 23/8/PADG/2021 on the Amendment to the Board of Governors of BI Regulation No. 21/18/PADG/2019 on the Implementation of National Quick-Response Code Standards for Payments (“BI Regulation 23/2021”)

Enforcement Date:

1 May 2021

• BI Regulation 23/2021 has now increased its nominal transaction limits of the Quick-Response Code Indonesian Standard (QRIS) from maximum IDR2,000,000 (two million Rupiahs) to be IDR5,000,000 (five million Rupiahs) per transaction.
• This is as an effort of Bank of Indonesia to speed up the development of an inclusive and efficient digital economy.

12.

MoF Regulation No. 48/PMK.03/2021 on Procedures for the Registration, and Reporting of, and Data Collection for Land and Property Tax Objects (“MoF Regulation 48/2021”)

Enforcement date:

18 July 2021

• Land and property Tax/Pajak Bumi dan Bangunan (“PBB”) taxpayers must register their tax objects at the relevant Tax Services Offices/Kantor Pelayanan Pajak (“KPP”) within one month upon which the relevant subjective requirements are fulfilled in order to receive official PBB Tax-Object Registration Certificates/Surat Keterangan Terdaftar Objek Pajak PBB (“SKT PBB”) (Art. 2 (1) of MoF Regulation 48/2021).
• PBB taxpayers must also report registered PBB tax objects to the Directorate-General of Tax by filling out and returning Tax Object Notification Letters/Surat Pemberitahuan Objek Pajak (“SPOP”) issued by the Directorate-General (Art. 11 (1) of MoF Regulation 48/2021).
• The Director-General of Tax is authorized to collect data on registered PBB tax objects through the implementation of office data collection and/or field data collection processes.

13.

MoF Regulation No. 33/PMK.010/2021 on the Amendment to MoF Regulation No. 237/PMK.010/2020 on Tax and Customs and Excise Treatments in Special Economic Zones (“MoF Regulation 33/2021”)

Enforcement date:

1 April 2021

• MoF Regulation 33/2021 amends the list of objects which will not be subject to Value-Added Tax/Pajak Pertambahan Nilai (“PPN”) and Luxury-Goods Sales Tax/Pajak Penjualan Barang Mewah (“PPnBM”) to be, among other, as follows: (i) Handovers of certain tangible taxable goods/Barang Kena Pajak (“BKP”) from other places within customs areas, free areas and bonded storage areas Tempat Penimbunan Berikat (“TPB”) to business entities and/or business actors; (ii) Imports of certain tangible BKP to special economic zones/Kawasan Ekonomi Khusus (“KEK”); (iii) Imports of consumer goods to tourism KEK; and so forth. Please refer to Art 22 of MoF Regulation 33/2021 for the complete list.

14.

Minister of Industry (“MoI”) Decree No. 839 of 2021 on Motor Vehicles with Luxury Goods Sales Tax on the Delivery of Taxable Goods Classified as Luxury Goods Borne by the Government For the 2021 Budgetary Year (“MoI Decree 839/2021”)

Enforcement date:

1 April 2021

• MoI stipulates that the transfer of certain motor vehicles which are classified as luxury goods are subject to the imposition of PPnBM. However, such will be borne by the government for the 2021 budgetary year, provided that said vehicles fulfill the local purchase requirements, which include the requirement for the utilization of at least 60% of domestic components.
• To obtain the aforementioned facilities, manufacturer of such vehicles must propose certain documents to the Director General of Industries of Metal, Machine, Transportation Vehicles and Electronics, which are: (i) Local purchase plans for 2021; (ii) Statement on the utilization of the locally purchased products during the manufacturing process; (iii) The relevant tax invoices; (iii) Realization of PPnBM that is borne by the government; and (v) Quarterly sales performance.

15.

Minister of Energy and Mineral Resources (“MoEMR”) Decree No. 67.K/HK.02/MEM.B/ 2021 on the Granting of Recommendations for the Overseas Sale of Certain Mineral Products During the Corona Virus Disease 2019 (COVID-19) Pandemic (“MoEMR Decree 67.K/2021”)

Enforcement date:

6 April 2021

• MoEMR Decree 67.K/2021 provides export-approval recommendations for certain mineral products (“Recommendations”) may be issued to the holders of Production Mining Business Licenses/Izin Usaha Pertambangan Produksi (“IUPP”) and Special Mining Business Licenses/Izin Usaha Pertambangan Khusus (“IUPK”) that engage in any of activities as follows: (i) Processing and refinery-related activities; (ii) Construction of processing and/or refinery facilities; and/or (iii) Cooperation relating to processing and/or refinery-related activities with other holders of IUPP, IUPK or IUPK for processing and/or refineries or other business entities (“Other License Holders”). However, the holders of the aforementioned IUPP and IUPK must also obtain approvals for their work plans and yearly budgets, as well as for any related revisions that are made.
• Any cooperation that is initiated between holders of IUPP/IUPK and Other License Holders must be implemented, either through (i) Share ownership; and/or (ii) Guaranteed supplies to the relevant processing and/or refinery facilities.
• MoEMR Decree 67.K/2021 stipulates that the granting of the abovementioned recommendations to holders of IUPP and IUPK at the latest by 31 December 2021.

16.

Minister of Trade (“MoT”) Regulation No. 24 of 2021 on Agreements for the Distribution of Goods by Distributors and Agents (“MoT Regulation 24/2021”)

Enforcement date:

1 May 2021

• MoT Regulation 24/2021 stipulates those domestic producers may appoint the following business actors to distribute their goods to retailers: (i) Distributors; (ii) Sole distributors; (iii) Agents; and (iv) Sole agents.
• In addition to the above, appointments may also be made by the following parties: (i) Principal producers; (ii) Principal suppliers (as approved by the relevant principal producers); (iii) Foreign investment companies/Perusahaan Modal Asing (“PMA”) that engage in the trade sector as distributors; or (iv) Representative offices of foreign trade companies (“FTRO”) (Art. 3 (1) of MoT Regulation 24/2021).
• PMA companies and FTRO as outlined above must appoint domestic investment companies as their distributors, sole distributors, agents or sole agents.
• Any agreements between a principle and a distributor, sole distributor, agent or sole agent for the distribution of goods that are produced overseas must be addressed in agreements that are attested by public notaries. Any such agreement must enclose a statement letter or legalization from Indonesian Trade Attaché or official at the representative office within the goods’ countries of origin. If the distribution is for domestically produced products, then the parties are only required to draw up agreements that will be attested by public notaries.
• MoT Regulation 24/2021 has revoked and replace the previous legal framework i.e., MoT Regulation No. 11/M-DAG/PER/3/2006 regarding Terms and Procedures for the Issuance of Certificate Registration of Agents or Distributors of Goods and/or Services.

17.

MoT Regulation No. 25 of 2021 on Determinations of Goods to Utilize or Feature Labels in Indonesian Language (“MoT Regulation 25/2021”)

Enforcement date:

1 May 2021

• MoT Regulation 25/2021 requires the following types of goods to be affixed or feature with labels In Indonesian Language: (i) Electronic goods which are intended for household, telecommunications, and information purposes; (ii) Construction materials; (iii) Motor-vehicle goods (spare parts, etc); (iv) Textiles; (v) Other types of goods.
• MoT Regulation 25/2021 repeals and replaces the previous legal framework of MoT Regulation No. 73/M-DAG/PER/9/2015 on the Mandatory Inclusion of Indonesian Language Labeling with Goods.

18.

MoT Regulation No. 26 of 2021 on the Determination of Standards for Business Activities and Products for the Organization of Risk-Based Business Licensing Within the Trade Sector (“MoT Regulation 26/2021”)

Enforcement date:

1 April 2021

• MoT 26/2021 stipulates various standards for business activities and for products in relation to the organization of risk-based business licensing within the trade sector, which are identified based on their KBLI codes.
• We note that there are a total of eight business activities and products that are addressed under MoT Regulation 26/2021, which include the following: (i) International Trade Exhibitions - KBLI 82301); (ii) Registration Certificates for Producers of Standard Indonesia Rubber - KBLI 01291, 20132, 22121, 22123); and (iii) Registration of Conformity Assessment Agencies - KBLI code 71201.
• MoT Regulation  26/2021 has revoked and replaced a total of 9 (nine) regulations and 1 (one) MoT Decree, including: (i) MoT Regulation No. 81 of 2019 on Trade Standardization; (ii) MoT Regulation No. 78 of 2019 on the Amendment to the MoT Regulation No. 38 of 2019 concerning Provisions on Instructions for Use and Guarantee of After-Sales Services for Electronic and Telematics Products; (iii) MoT Regulation No. 38 of 2019 on Terms of Use Instruction and After-Sales Service Guarantee for Electronic and Telematic Products, and so forth.

19.

GR No. 64 of 2021 on the Land Bank Agency (“GR  64/2021”)

Enforcement date:

29 April 2021

• GR  64/2021, the implementing regulation of Omnibus Law, introduces the Land Bank Agency (“Land Bank”), which is authorized to guarantee the availability of land for various purposes (e.g., public and social interests, agrarian reform, etc.).
• Land Bank was established with specific functions of: (i) Planning; (ii) Land acquisitions; (iii) Land procurements; (iv) Land management; (v) Land utilization; and (vi) Land distribution.
• GR  64/2021 stipulates that the right-to-manage/hak pengelolaan (HPL) will be granted to lands that are managed by the Land Bank, with some additional land rights that may be granted, which are: (i) Right to cultivate/Hak Guna Usaha (HGU); (ii) Right to build/Hak Guna Bangunan (HGB); and (iii) Right to use/ Hak Pakai (Art. 40 (1) and (2) of GR  64/2021).

20.

National Agency of Drug and Food Control/Badan Pengawas Obat dan Makanan (“BPOM”) Regulation No. 13 of 2021 on the Third Amendment to BPOM Regulation No. 24 of 2017 on Criteria and Procedures for the Registration of Drugs (“BPOM Regulation 13/2021”)

Enforcement date:

29 April 2021

• BPOM Regulation 13/2021 revises the previous framework to be any drugs during public-health emergencies must first secure distribution licenses, which may be in form of an emergency use authorization (“EUA”), as issued by Head of BPOM, that will remain valid particularly during the relevant emergency and that will only cover medication-related use.
• BPOM Regulation 13/2021 set up certain criteria for public-health emergency drug which are: (i) must be in line with government’s determination on a public-health emergency; (ii) must be backed up by sufficient scientific proofs relating to their security and efficacy; (iii) have fulfilled the quality standards and comply with good drug manufacturing practices; (iv) must be associated with greater benefits than risks (risk-benefit analysis), as referred to in clinical and non-clinical data studies; and (v) there has been absence of other available alternatives in terms of the medication in question or the management of the relevant emergency disease in relation to diagnosis, prevention and medication.