No

Regulation

Summary

 1.

Central Bureau of Statistics Regulation No. 2 of 2020 on Indonesian Standard Industrial Classification (“KBLI 2020”)

Enforcement date:

24 September 2020

• This regulation, also known as Klasifikasi Baku Lapangan Usaha Indonesia (“KBLI”), provides a classification of business activities in Indonesia into numerous sectors. 
• The KBLI 2020 groups Indonesian business sectors into 21 categories, from A to U, and each category matches to a certain business sector.

 2.

Minister of Transportation (“MoT”) Regulation No. PM 64 of 2020 on the Revocation of MoT Regulation No. PM. 45 of 2015 on Requirements for Business Capital Ownership Within the Transportation Sector

Enforcement date:

4 September 2020

• This regulation revokes the previous MoT regulation which required any businesses to fulfill various capital-ownership requirements in order to obtain certain licenses, including businesses operating within the following areas: 1) Sailing; 2) Aviation; and 3) Rail transportation.
• After the enactment of this regulation, businesses may now apply for various transportation-sector business licenses regardless of their capital-ownership levels.

 3.

Minister of Law and Human Rights (“MoLHR”) Regulation No. 20 of 2020 on Requirements and Procedures for the Imposition of Certain Rates for Patent and Copyright Services

Enforcement date:

27 July 2020

• This regulation provides special tariffs for the annual patent fees amounting to 10% of the applicable non-tax state-revenue tariffs (“Special Tariff”) as stipulated in Appendix of Government Regulation No. 28 of 2019 on the Types and Tariffs of Non-Tax State Revenue Applicable at the MoLHR. Such Special Tariff is applicable limited to (i) micro- and small-scale enterprises, (ii) educational institutions, (iii) and government research-and-development institutions.
• Zero tariffs may also be granted to certain parties with criteria as follows:

1. Annual patents fees of research and development institutions owned by the government, public and private universities and schools, and other educational institutions operated by the government);
2. Annual fees for patents that have been transferred to other parties as grants or waqf to society and/or the general public; and
3. Fees for applications to change data, names and/or addresses relating to creators, holders of copyrights, owners of related rights and/or recipients rights, provided that the creations or related-right products have been recorded and that any such change is not the result of any fault of the applicant.

• Applications for the Special Tariff can be submitted to the Directorate General of Intellectual Property of MoLHR through a written application or online means.

  4.

Minister of State-Owned Enterprises/ Badan Usaha Milik Negara (“BUMN”) Circular Letter No. SE-9/MBU/08/2020 of 2020 on Expert Staff for the Boards of Directors of BUMN

Enforcement date:

3 August 2020

• Board of Directors of BUMN may employ up to five expert staffs that will be responsible for providing recommendations in solving various strategic issues and engage in other assignments upon obtaining the relevant required approval.
• An expert staff has to obey the following rules:

1. May only be employed for one-year period and may be extended for another year;
2. Prohibited to be assigned as (a) expert staff in other BUMN(s), (b) Board of Director (“BoD”), Board of Commissioner (“BoC”)/Supervisory Board of other BUMN and its subsidiaries, and (c) Secretary of BoC/Supervisory Board of other BUMN and its subsidiaries; and
3. Entitled to receive remuneration of up to IDR 50Million yet is prohibited to receive any other additional income aside from such remuneration

  5.

Presidential Regulation No. 97 of 2020 on Ratification of the Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of Singapore on the Promotion and Protection of Investments

Enforcement date:

29 September 2020

• This regulation ratifies the agreement between Indonesia and Singapore on the Promotion and Protection of Investments which was signed in Bali on 11 October 2018.
• This agreement aims to establish a conducive business environment in order to stimulate investment between Indonesia and Singapore.
• The agreement consists of 40 pages with 44 articles which govern among others the scope of applicability, protection of fair equitable investment treatment, and dispute settlement.

  6.

Minister of Social Affairs Regulation No. 9 of 2020 on Corporate Environmental and Social Responsibility

Enforcement date:

31 August 2020

• This regulation requires business actors to implement corporate environmental and social responsibility (“CSR”), which should at least cover the following areas: (i) Social welfare; (ii) education; (iii) health; (iv) arts and culture; (v) Religion; (vi) entrepreneurship; (vii) infrastructure; and (viii) Environment.
• The scope of CSR activity comprises of (i) CSR to the community within the corporation itself, (ii) CSR to the surrounding community of the corporation, and (iii) CSR to the general public in national scope.
• CSR to the community within the corporation itself should include the provision of basic social services and the implementation of social protection and security to its employees and their families.
• CSR to the surrounding community of the corporation shall include among others (i) prioritizing work opportunities for surrounding communities, (ii) empowerment, guarantees, protections and social rehabilitation for the communities, and (iii) provide support in building environmental facilities and infrastructure around the business entities.
• CSR to general public in national scope comprise as follows (i) disaster management, (ii) to involve in community welfare national priority programs, and (iii) to involve in resolving other national social issues.
• CSR can be done through the following parties: (i) directly by the business entities; (ii) through the third parties, (iii) in partnership with local communities; and/or (iv) in collaboration with other business entities in the form of consortiums.

  7.

Minister of Manpower (“MoM”) Decree No. 312 of 2020 on Guidelines for the Drafting of Business Sustainability Planning for the Handling of Pandemic Diseases.

Enforcement date:

17 September 2020

• This regulation establishes a set of guidelines for companies to designing its business sustainability plans in order to face global pandemics (“Business Sustainability Plan”).
• Business Sustainability Plan should include the following stages: (i) evaluating business priorities, (ii) identifying of pandemic risks, (iii) planning the mitigation of pandemic risks, (iv) identifying responses to pandemic risks, (v) designing and implementing Business Sustainability Plans, (vi) dissemination of Business Sustainability Plans, and (vii) assessment of the Business Sustainability Plan.
• For our complete commentary on the regulation, please see here.

  8.

MoM Regulation No. 14 of 2020 on Guidelines for the Granting of Government Assistance in the form of Salary/Wage Subsidies in the Handling of Impacts of Corona Virus Disease 2019 (COVID-19)

Enforcement date:

14 August 2020

• Indonesia government will grant assistance in the form of salary or wage subsidies will grant a total of IDR2.4Million remuneration subsidy for every qualified Indonesian worker or IDR600,000 for four months (“Remuneration Subsidy”).
• Employee must fulfill the following criteria to be eligible to receive Remuneration Subsidy: (i) Indonesia citizen, (ii) active member of the Manpower Social Security Organizing Body/Badan Penyelenggara Jaminan Sosial Ketenagakerjaan (“BPJSTK”), (iii) recipient of remuneration or wages, (iv)  BPJSTK membership must be valid until June 2020, (v) pays BPJSTK premium with the remuneration of less than IDR5 Million based on the report submitted by the employer, and (vi) own an active bank account (Art. 3 (2) of MoM Regulation 14/2020).
• Any employer which fails to provide accurate information as regards the eligibility of workers to receive these subsidies will be subject to sanctions, as set out under the relevant applicable laws and regulations.
• For our complete commentary on the regulation, please see here.

  9.

MoM Regulation No. 15 of 2020 on Employment Single Data

Enforcement date:

8 September 2020

• This regulation stipulates that the management of employment data (“Data”) involves the following activities: (i) data planning, (ii) data collection, (iii) data processing; (iv) data analysis, (v) data presentation, (vi) data dissemination (vii) data service; and (viii) data storage.
• There are two main types of employment relating to the management of Data, specifically: (i) Human resources, which include structural officers in charge of Data processing; and (ii) Technological resources, which are implemented by work units responsible for various tasks and functions relating to the technological management of employment information.

 10.

National Board for the Protection of Indonesian Migrant Workers Regulation No. 9 of 2020 on Exemptions to Indonesian Migrant-Worker Placement Fees

Enforcement date:

15 July 2020

• This regulation requires the prospective Indonesian migrant workers (“Migrant Workers”) which are looking to be placed overseas to secure the following documents: (i) marriage status statement letter, including a copy of a marriage certificate and permission from the relevant spouse if he/she is married, (ii) work competence certificate, (iii) health certificate, (iv) passport and working visa, and (v) placement agreement and work agreement.
• Migrant Workers are exempted from the payment of placement fees obligation as follows: (i) round-trip airfares, (ii) working visas, (iii) legalization of work agreements, (iv) company services, (v) replacement passports; (vi) police certificates confirming a prospective migrant worker’s good behavior; (vii) social security; (viii) health examinations; (ix) local transportation; and (x) Accommodation.
• We note that Migrant Workers must only borne the work training fees and work competence certification fees.
• Placement fees for Migrant Workers who are placed by the National Board for the Protection of Indonesian Migrant Workers/Badan Pelindungan Pekerja Migran Indonesia (“BP2MI”) should be borne by the relevant employer and/or determined based on an agreement between the Indonesian Government and the government of the relevant destination country or employer in the relevant destination country.

 11.

Bank Indonesia (“BI”) Regulation No. 22/12/PBI/2020 of 2020 on Settlement of Bilateral Transactions Using Local Currency via Banks

Enforcement date:

28 August 2020

• This regulation requires BI to appoint across-currency dealer (“ACCD”) banks in order to implement Local Currency Settlements (“LCS”).
• ACCD is required to inform BI if they are in the process of having their licenses revoked or are planning to undergo corporate actions, otherwise, they will be subject to administrative sanctions.
• Indonesian ACCD banks are prohibited from engaging in any non-deliverable forward transactions and are required to incorporate the following elements into their standard operating procedures: (i) implementing the know-your-customer principle, and (ii) organizing internal audits for all LCS transactions.
• Unless otherwise stipulated, LCS transactions are to be based on certain underlying transactions, which are divided into the following categories: (i) current-account transactions, (ii) direct-investment transactions; and (iii) Other underlying transactions.

 12.

Minister of Finance (“MoF”) Regulation No. 104/PMK.05/2020 of 2020 on Placement of Funds Under the Framework of the Implementation of the National Economic Recovery Program

Enforcement date:

7 August 2020

• In order to implement the National Economic Recovery Program the government will deposit funds in commercial banks that fulfill the several requirements and is appointed as partners in the program (“Partnering Banks”).
• Partnering Banks is required to use government funds to distribute credit or financing to debtors, which include micro-, small- and medium-scale enterprises (“UMKM”), non-UMUM, cooperatives and financial institutions.
• The funds in Partnering Banks will be saved in the following forms: (i) in bank deposit, or (ii) Government Giro, which only applies to certain specific assignments, as stipulated under an MoF decree.

 13.

MoF Regulation No. 138/PMK.05/2020 on Procedures for the Granting of Interest Subsidies/Margin Subsidies to Support the Implementation of the National Economic Recovery Program

Enforcement date:

28 September 2020

• This regulation extends the scope of the types of the debtors that are eligible to receive interest subsidy/margin subsidy facilities (“Credit Facilities”) to include the following parties: (i) Debtors with housing ownership credits/kredit pemilikan rumah for houses of up to type 70, and (ii) Debtors with motor-vehicle loans/kredit kendaraan bermotor whose vehicles are utilized for productive business purposes.
• Under this new regulation, the requirements which have to be met by each debtor are differentiated based on the distributors of the relevant credit facilities (i.e. banks and financing companies or government credit-program distribution agencies).

 14.

MoF Regulation No. 134/PMK/010/ 2020 on Government-Borne Import Duty for Imports of Goods and Materials Which Are Used to Produce Goods and/or Services by Certain Industrial Sectors Impacted by the Corona Virus Disease 2019 Pandemic

Enforcement date:

22 September 2020

• This regulation provides Government-Borne Import Duty/Bea Masuk Ditanggung Pemerintah (“BM DTP”) incentives may be granted to imports of goods and service with raw materials that are: (i) not produced domestically, (ii) produced domestically but do not meet the required specifications, or (iii) produced domestically but in insufficient amounts to fulfill the relevant industrial requirements.
• Requirement for businesses to be eligible to obtain BM DTP incentives are as follows: (i) company must provide details in customs import notifications of the quantities and/or types of any goods which obtained BM DTP during the previous year and that led to any reduced import-duty payments, and/or (ii) must not have any overdue import-duty, excise and/or tax debt for imports.
• The application procedure for BM DTP incentives are detailed as follows: (i) submission of an electronic application to the MoF through the Director of Customs via the Indonesian National Single Window portal, (ii) review of the requirements fulfillment, and (iii) If an application is approved, the MoF will issue an official Decree on the provision of BM DTP to the applicant.

 15.

Government Regulation (“GR”) No. 48 of 2020 on the Amendment to GR No. 81 of 2015 on Imports and/or Transfers of Certain Strategic Taxable Goods in Nature and Exempted from the Imposition of Value-Added Tax

Enforcement date:

24 August 2020

• This regulation includes liquified natural gas as a category of “certain taxable goods” which are categorized as strategic and for which imports and/or transfers are exempted from the imposition of Value-Added Tax/Pajak Pertambahan Nilai (“PPN”).
• This regulation also includes fish fillets and other fish meats in fresh, cold and frozen conditions to the list of fisheries products that are categorized as certain strategic taxable goods.

 16.

MoF Regulation No. 110/PMK.03/2020 of 2020 on the Amendment to MoF Regulation No. 86/PMK.03/2020 on Tax Incentives for Taxpayers Affected by the Corona Virus Disease 2019 Pandemic

Enforcement date:

14 August 2020

• Final Income-Tax/Pajak Penghasilan (“PPh”) is to be imposed upon the income of construction services businesses based on GR No. 51 of 2008 on Income Tax for the Income of Construction Services, as amended through the issuance of GR No. 40 of 2009.
• Construction final PPh should be paid in the following mechanism: (i) Withheld by the service user at the time of payment if the service user is a tax withholder, or (ii) Paid by the service provider if the service user is not a tax withholder. However, Final PPh on income received or obtained by recipients under the Acceleration Program for the Enhancement of Irrigation Water Use Systems/Program Percepatan Peningkatan Tata Guna Air Irigasi (P3-TGAI) will be borne by the government and is to be granted during the 14 August 2020 to December 2020 tax period.
• Taxpayers who satisfy the following criteria will be granted a reduction in their Article 25-PPh installments amounting to 50% of the installment that would have been payable: (i) fall under various business type classification codes, as set out under Appendix M to this Regulation, (ii) have been designated as Export-Oriented Import Facilities (Kemudahan Impor Tujuan Ekspor (KITE) companies, or (iii) have obtained bonded-zone organizer licenses, bonded-zone business licenses or licenses for Businesses Which Are Concurrently Acting in the Role of Organizers/Pengusaha di Kawasan Berikat merangkap Penyelenggara di KawasanBerika (PDKB).
• Reductions in Article-25 PPh installments will be effective as follows: (i) during the July 2020 tax period, for taxpayers who have submitted notifications which address the reduction in their Article 25-PPh installments; or (ii) From the tax period which corresponds to a notification of the reduction in Article 25-PPh installments being submitted until the December 2020 tax period.

 17.

Minister of Maritime Affairs and Fisheries Regulation No. 19/PERMEN-KP/2020 of 2020 on the Prohibition on the Import, Cultivation, Distribution and Release of Endangering and/or Harmful Fish Types into or from Indonesian Fisheries Management Areas of the Republic of Indonesia

Enforcement date:

24 July 2020

• This regulation prohibits all parties from importing any endangering and/or harmful fishes that have the potential to affect the following: (i) general public, (ii) fish cultivators; (iii) Fisheries resources, and/or (iv) the environments of fisheries resources. However, these provisions exempt any imports which are conducted for the purposes of research and development.
• Endangering fish are defined by the following criteria: (i) Contain toxins/bio-toxins, (ii) parasitic in nature, and/or (iii) dangerous or endangering to human life. Meanwhile, harmful fish are defined by similar criteria with the additional measure of fish which are predatory to other species and thus reduce the populations of other fish species.
• This regulation bans all parties from cultivating, preserving and/or distributing, releasing and procuring any fish that are categorized as endangering and/or harmful. The aforementioned endangering and/or harmful fish species which are located within the territorial waters of the Republic of Indonesia can be distributed through processes of fisheries management within the Republic of Indonesia and/or exported to areas lying outside of Indonesian territory until 24 July 2020.

 18.

Regulation of the Minister of Environment and Forestry No. P.17/MENLHK/SETJEN /KUM/1/8/2020 of 2020 on Customary Forests and Private Forests

Enforcement date:

9 September 2020

• Customary forests are to be managed by registered indigenous communities/Masyarakat Hukum Adat (“MHA”) which have been granted certain specific utilization privileges, such as environmental servicing, collection of timber and non-timber forestry resources, etc.
• To exercise its utilization privilege, MHA must satisfy certain criteria among others (i) take the form of a communal groupings (paguyuban), (ii) implement institutional authority over their communities, (iii) have demarcated clear boundaries for the relevant customary law areas; etc.
• The overall process for the determination of customary and private forests breaks down as follows: (i) submission of application, (ii) validation and verification; and (iii) determination of customary forest.
• In terms of the utilization of forests, the stakeholders of both customary forests and private forests are to be granted certain rights (i.e. the right to receive protection from damage and pollution, the right to manage and utilize customary forests and private forests in accordance with local traditions, etc.) and must also comply with certain obligations (the obligation to maintain the function of customary forests and private forests, the obligation to implement principles of sustainable forest management, etc.)

 19.

Joint Decree of the Minister of Religious Affairs, Minister of Manpower and Minister of Administrative and Bureaucratic Reform No. 642.4.4 of 2020 on National Holidays and Collective Leave for the Year 2021

Enforcement date:

10 September 2020

• This Decree provides 15 bank holidays for the year 2021 as follows: (i) 1 January - New Year 2021, (ii) 12 February – Chinese New Year; (iii) 11 March – Isra’ Mikraj,  (iv) March 14 – Nyepi Day of Saka New Year, (v) 2 April – Good Friday, (vi) 1 May – International Labor Day, (vii) 13 May – Ascension Day of Jesus Christ, (viii) 13&14 May – Eid Al-Fitr, (ix) 26 May – Vesak Day, (x) 1 June – Pancasila Day, (xi) 20 July – Eid Al-Adha), (xii) 10 August – Islamic New Year, (xiii) 17 August – Independence Day; (xiv) 19 October– Birthday of the Prophet Muhammad, and (xv) 25 December – Christmas.

 20.

Minister of Health Regulation No. 24 of 2020 on Clinical Radiology Services

Enforcement date:

22 September 2020

• Clinical radiology services are to be implemented based on written requests which are made by doctors, dentists, specialist doctors, specialist dentists and sub-specialist doctors for the following purposes: (i) Diagnostic purposes (i.e. examination and securing of expert opinion in order to establish a diagnosis); and (ii) Therapeutic purposes (i.e. therapeutic guidelines and measures).
• Said services are to be organized by hospitals, health centres, public health centres and clinics (“Healthcare Facilities”) that are owned by the central government, regional governments or private entities, provided that said facilities are in possession of the following: (i) Certain types of equipment (i.e. both ionizing and non-ionizing radiation equipment); and (ii) Adequate human resources (i.e. radiology specialists, radiographers, radiation protection officers, medical physicists, electro medics, nurses and/or administrative officers), the composition of which depends on the relevant level of service being offered (i.e. small [pratama], intermediate [madya)], main [utama] and complete [paripurna]).
• Healthcare facilities aiming to provide clinical radiology services must implement equipment suitability testing and must secure licenses for the use of radiation sources.