Indonesia has a mixed economy. Business is conducted by private and public enterprises. Certain industries are deemed vital to public interest and as such are more highly regulated or, in certain cases, controlled by the state through public enterprises.

Indonesia’s dominant industries are manpower-intensive industries such as food processing and textile manufacturing, as well as natural resource-based industries such as oil and gas, mining, agriculture, and metal manufacturing.

Indonesia’s population is approximately 270 million. The official language is Indonesian (Bahasa Indonesia), with more than 700 local languages spoken by the various ethnic groups.

Indonesia generally uses a five-workday system. General business hours for companies in Indonesia are from 8am to 5pm. Indonesia recognises 16 public holidays. This includes so-called collective leave (cuti bersama) days on which certain government offices are closed (due to the proximity of those days to important public holidays).

Indonesia’s business climate is generally investor-friendly. Recent regulations and policies are directed at reducing entry barriers for investors to conduct business in Indonesia.

Various economic sectors experienced contractions in 2020 as a result of the ongoing COVID-19 pandemic. These included the transportation, accommodation, and tourism sectors. Sporadic and unco-ordinated lockdown measures aimed at preventing the spread of COVID-19 caused uncertainty for business activities in several regions.

Several politicians in Indonesia have, controversially, claimed that there is a plan in the People’s Consultative Assembly (Majelis Permusyawaratan Rakyat) (MPR) to amend the Indonesian Constitution to increase the presidential term limit from two to three terms. It is not clear whether the MPR, the legislative body in Indonesia, will actually submit a proposal for such amendment.

The Indonesian Government passed Law No. 11 of 2020 regarding Job Creation (Job Creation Law), which revises various provisions in laws across numerous sectors. In February 2021, the government enacted 47 government regulations (peraturan pemerintah) and four presidential regulations (peraturan presiden) to implement the provisions of the Job Creation Law.

One of the biggest changes was the enactment of Government Regulation No. 5 of 2021 regarding the Implementation of Risk-Based Business Licensing (GR 5/2021). GR 5/2021 intends to further overhaul and integrate the business licensing system managed by the Online Single Submission (OSS) system (maintained by the Capital Investment Co-ordinating Board (BKPM)). In essence, GR 5/2021 categorises businesses based on their level of risk. All businesses must be registered in the OSS system and obtain a Business Identity Number (NIB). However, only high-risk businesses are required to obtain a business licence, and medium-risk businesses must obtain a standard certificate. The implementation of the new risk-based licensing in the OSS system became effective four months after the enactment of GR 5/2021 on 2 February 2021.

In addition, the BKPM issued Regulation No. 4 of 2021 regarding Guidelines and Procedures for Risk-Based Business Licensing Services and Capital Investment Facilities (BKPM Reg 4/2021), dated 1 April 2021, which came into effect on 2 June 2021. One of the biggest changes under BKPM Reg 4/2021 is that a foreign investment company (perusahaan penanaman modal asing) (PT PMA) is required to have minimum issued and paid-up capital of IDR10 billion. BKPM Reg 4/2021 is silent on whether this minimum capitalisation applies per business activity or on a per project location basis. However, the authors consider that this requirement will apply per company, irrespective of the number of business lines in which the company engages.

The Constitutional Court recently issued Decision No. 91/PUU-XVIII/2021. The decision declared the Job Creation Law conditionally unconstitutional and ordered its revision within two years as of the court’s ruling on 25 November 2021, including the suspension of the enforcement of any acts/policies that are widespread in nature. As such, there is no guarantee on the applicability of the implementing regulations of the Job Creation Law. However, as a matter of practice, the new licensing regime under the Job Creation Law remains applicable to date.

The legal system in Indonesia is based on civil law. Indonesia is a republic and does not adopt a federal system. However, there is a certain degree of regional autonomy and regional governments do have the power to issue regional regulations for certain matters.

Since 2018, Indonesia has eased its foreign investment procedure such that prior government authorisation is no longer required. Subject to regulatory shareholding limitations (see below) foreign investment is conducted by way of establishing a limited liability company, which follows the same procedure as regulated for locally owned companies. The establishment of any limited liability company in Indonesia requires the approval of the Minister of Law and Human Rights (MOLHR).

Indonesia is open for foreign investment (through foreign shareholding) unless otherwise restricted or limited in relation to specific industries.

Foreign investment can be conducted either by establishing a new company or by acquiring the shares of an existing company.

Restrictions on foreign shareholders are set out in the Investment List. The newest Investment List is contained in Presidential Regulation No. 10 of 2021, as amended by Presidential Regulation No. 49 of 2021 regarding Capital Investment Business Lines (PR 10/2021, as amended). PR 10/2021, as amended lists the areas in which investment by Indonesians and foreign nationals is prohibited or restricted.

In addition to PR 10/2021, as amended, the laws and regulations governing certain business lines must be reviewed to determine whether an area is open to foreign investment and, if so, whether a PT PMA established to conduct that kind of business can be wholly or partially foreign owned. If a particular business is not listed in PR 10/2021, as amended it is open to unconditional 100% foreign investment.

The Investment List also stipulates foreign ownership restrictions, such as setting out a maximum foreign shareholding or a requirement to partner with a small- or medium-scale enterprise.

The Investment List is organised by reference to the business activities described in the Indonesian Business Fields Classification (Klasifikasi Baku Lapangan Usaha Indonesia) (KBLI) issued by Indonesia's Central Statistics Body (Badan Pusat Statistik). A PT PMA can have more than one KBLI number as its business activity, unless the relevant laws and regulations provide otherwise.

There are no restrictions on doing business with any countries or jurisdictions. Indonesia does not maintain a publicly available list of countries that are subject to official trade or monetary sanctions by Indonesia.

There are no foreign exchange controls in Indonesia. The Indonesian Rupiah is freely convertible into any currency and vice versa. However, under Bank Indonesia Regulation No. 17/3/PBI/2015 regarding the Mandatory Use of Rupiah within the Territory of the Republic of Indonesia (PBI 17/2015), all transactions conducted in Indonesia must use Rupiah, including payments, settlements of obligations and other financial transactions, whether using cash or otherwise. Exemptions to this rule apply only to:

PBI 17/2015 stipulates that sanctions are applicable for violations of the regulation, including written warnings, fines, prohibition from participation in payment transactions and a maximum of one-year of imprisonment. To date, the enforcement of these sanctions has not been seen in practice.

In addition, Indonesian banks can only accept an order for the outgoing transfer of any foreign currency above USD100,000 if the customer submits the required related supporting documents under Bank of Indonesia Board of Governors Regulation No. 21/28/PADG/2019 regarding the Supervision of Foreign Exchange Traffic of Banks and Customers (PADG 21/2019).

Under PADG 21/2019, banks must also report the details of the outgoing transfer of any foreign currency above USD10,000 to the Bank of Indonesia. If the value of the outgoing transfer exceeds USD100,000, the bank must also report the supporting documents provided by the customer to the Bank of Indonesia.

Under Presidential Regulation No. 13 of 2018 regarding the Application of the Know-Your-Corporate-Beneficial-Owner Principle for the Prevention and Eradication of Money Laundering and Terrorism Financing (PR 13/2018), all companies must report their respective individual beneficial owner. PR 13/2018 is implemented by Minister of Law and Human Right (MOLHR) Regulation No. 15 of 2019 regarding the Procedure for the Implementation of the Know-Your-Corporate-Beneficial-Owner Principle (MOLHR Reg 15/2019), under which a company is required to disclose its beneficial owner through the online General Legal Administration platform maintained by the MOLHR. The disclosure can be made by a notary, founder/management of the company, or any appointed proxy of the company. In practice, a notary will usually make such submission.

Indonesia does not have grant programme(s) that are generally/continuously available only for foreign investment.

Investors are eligible for incentive facilities if they meet one of the criteria set out in Law No. 25 of 2007 regarding Investment, as amended by the Job Creation Law (Investment Law), such as:

The available facilities are set out in the Investment Law, and include:

Tax allowances are set out under Law No. 7 of 1983 regarding Income Tax, as amended lastly by Law No. 7 of 2021 regarding Harmonisation of Tax Regulations (Income Tax Law), which provides investors with the following facilities:

Not all business sectors are entitled to receive tax allowances. The list of business sectors and regions that can be granted tax allowances is stipulated in Government Regulation No. 78 of 2019 regarding Income Tax Facilities for Capital Investment in Certain Business Fields and/or in Certain Regions.

Government Regulation No. 94 of 2010, as amended by Government Regulation No. 45 of 2019 regarding Calculation of Taxable Income and Redemption of Income Tax in the Current Tax Year (GR 94/2010), provides that taxpayers conducting new investments in certain pioneer industries, which do not receive a tax allowance (see above), can be granted a corporate income tax exemption or reduction facilities known as tax holidays under the Investment Law. The corporate income tax facility reduction starts at 10% and goes up to a maximum 100%. This reduction can be given at least for five years and at the most for ten years.

Import duty exemptions exist for the importation of machines, defined as any machine, machinery, factory installation apparatus, equipment or appliance, both installed and un-installed, used in industrial construction or expansion. The facility is available if the company is:

In addition, there is another facility for the import of goods and materials, defined as all goods or materials, without considering types and composition, used as materials or components to produce finished goods. The facility can only be granted if the goods or materials are:

The Indonesia Government is currently in discussions on additional tax holidays and tax allowances to attract more foreign investors. The new tax incentives are yet to be announced and it remains to be seen what form they will take.

The main business vehicles in Indonesia are either legal or business entities. A legal entity recognises the separation of the assets of the founder and the established entity, while a business entity does not. Establishing a legal entity requires the approval of several government entities, while establishing a business entity only requires registering the entity with the government.

Examples of legal entities include:

Business entities include:

A PT is a legal entity comprised of shares, which must be established by at least two shareholders. A PT is the most common form of business vehicle because of its limited liability and clearer capitalisation regime. A PT can take the form of a publicly listed company or a privately-owned company.

Indonesia does not recognise the concept of trusts.

Under the Investment Law, foreign investment must be conducted through a PT, unless otherwise permitted for certain sectors (such as oil and gas).

The main registration requirements to establish a corporate business vehicle (that is, a PT PMA) are:

The company must then obtain the appropriate business licence before it commences production/operation.

A PT PMA must normally submit the following reports:

Companies engaged in the financial services sector must submit a monthly report and audited annual financial statement, as well as an annual business plan and implementation of good corporate governance report, to the Indonesian Financial Services Authority (Otoritas Jasa Keuangan (OJK).

The submission of these reports is free of charge, except for the cost required to prepare an audited annual financial statement by a licensed auditor.

A PT PMA must have a minimum investment value (excluding land and buildings) of more than IDR10 billion. The total investment value above is applied for each five-digit KBLI code in which the PT PMA engages. Certain industries (such as wholesale trading, food and beverage, and construction, to the extent allowed for foreign investment) are subject to different investment value requirements.

Starting from 2 June 2021, the minimum paid-up capital of the PT PMA is IDR10 billion, and each shareholder must have at least IDR10 million participation in the PT PMA. Certain business sectors have higher minimum share capital requirements.

Non-cash consideration or in-kind contributions can be used to pay up shares in a company, but such consideration must be appraised by a non-affiliated appraiser.

Restrictions on Rights Attaching to Shares. The rights attached to shares are restricted in as far as the shareholder must not act in bad faith and potentially cause the company to suffer losses.

Automatic Rights Attaching to Shares. Every shareholder is entitled to:

Shares owned directly or indirectly by the company itself, or shares controlled by its own subsidiary, do not have voting rights.

The management of a company is comprised of a board of directors (BOD) and a board of commissioners (BOC). The BOD represents the company and is responsible for its daily management, while the BOC acts as an advisory and/or supervisory organ to the BOD.

Under the Company Law, all individuals capable of performing legal actions can be appointed as directors, unless they have been:

A relevant technical institution in the related business sector may impose additional requirements for becoming a director.

Foreign nationals are prohibited from serving as human resources directors and there are a number of other directorship positions that foreign nationals are prohibited from holding under employment laws and regulations.

There is no general requirement for a director to reside in Indonesia. However, Minister of Manpower Decree No. 349 of 2019 regarding Certain Positions Should Not be Taken by Foreign Manpower (MOM Dec 349/2019) sets out various company positions related to personnel and industrial relations that cannot be taken by foreign nationals.

The BOD and its members are not liable for the acts taken for and on behalf of the company, but the member(s) of the BOD and BOC can be personally liable for the losses of the company, if it can be proven that the loss resulted from the fault or negligence of the BOD or BOC.

A parent company, in its role as a shareholder for its subsidiary, is not personally liable for the actions or losses of the subsidiary beyond its investment into the subsidiary. However, the parent company can be liable if one of the following applies:

Generally, every business actor must comply with the following requirements:

Obtain an environmental licence or a statement letter on environmental management supervision capability, depending on the nature of its business activity.

Comply with the regulatory environment and/or pollution quality standard (baku mutu), as may be applicable depending on the nature of business.

Conduct waste management (whether by itself or through a third party) for all of the waste produced as a result of its business activity. A company engaging in waste management (whether for itself or as a service for third parties) must be duly licensed to conduct the relevant waste management activity.

Business actors who are required to obtain an environmental licence or waste management licence are required to submit periodical reports to the local government on their respective environmental management/supervision efforts.

The Job Creation Law introduced major changes to the environment protection regime in Indonesia, in particular to the utilisation and protection of forestry areas. The Job Creation Law removes a provision in Law No. 41 of 1999 regarding Forestry that required the preservation of forestry area to be at least 30% of the relevant river flow area and/or island. This means the government may now freely determine how much forestry area is preserved in a certain region. Further, the forestry function is changed by the Job Creation Law such that it can now be carried out by "taking into account" the result of integrated research studies (previously, it was carried out "based on" the result of integrated research studies).

Lastly, the strict liability principle for damage caused by toxic waste under Law No. 32 of 2009 regarding Environmental Protection and Management has been amended such that the wording "without the necessity to prove the element of fault" is now only provided in the elucidation of the law (not in the actual article).

Employment relationships in Indonesia are governed by the following regulations:

An employment contract must be in the Indonesian language. If the parties execute the employment contract in Indonesian and another language, the Indonesian version prevails in construing the contract.

The same laws apply to foreign employees working in Indonesia (see above).

The same laws do not apply to Indonesian employees working abroad.

There are no mandatory rules of law since all employment agreements for employment in Indonesia must be governed under Indonesian law.

Indonesian law recognises two types of employment contract:

Under the Manpower Law, a permanent employment contract can be either in writing or verbal form. However, a non-permanent contract must be in writing or it will be deemed to be a permanent employment contract.

A written contract of employment should contain the minimum following provisions:

The provisions of the Manpower Law are deemed to apply and govern employment contracts (as applicable), unless the relevant employment agreement, company regulation, or collective labour agreement provides otherwise, and would be more beneficial to the employee.

Under Indonesian law, an employer employing at ten employees must prepare a company regulation (peraturan perusahaan) and register the same with the local manpower service office, unless there is already a collective labour agreement (perjanjian kerja bersama) between the employer and its labour union(s). There can only be one collective labour agreement applicable to the employer.

An employer who employs foreign nationals must obtain a work permit from the Ministry of Manpower (MOM). To obtain a work permit, the employer must prepare a Plan for the Utilisation of Foreign Workers (Rencana Penggunaan Tenaga Asing) (RPTKA) endorsed by the MOM. After the endorsement of the RPTKA, the employer can then request the employment of individual expatriate workers. The MOM will issue a notification of its RPTKA approval. An RPTKA is not required for certain positions.

Not all work positions are open to foreign nationals. Human resources director and other positions set out by Ministry of Manpower and Transmigration decree are closed to foreign nationals.

Foreign nationals seeking to reside in Indonesia must first obtain a temporary stay visa (visa tinggal terbatas (VITAS) to enter Indonesia. After arriving in Indonesia, the VITAS will then be used to obtain a temporary stay permit (izin tinggal sementara (ITAS)).

There is no requirement for employee representation on the management board.

Termination of individual employment is regulated under the Manpower Law and its implementing regulations. The employer cannot unilaterally terminate employees. Termination procedure is as follows:

Employees may be terminated for the following reasons:

Statutory Minimum Notice. The statutory minimum notice is 14 working days, or seven working days if the employee is still in probation.

Severance Payment. Terminated employees are entitled to receive a severance package, which may include some or all of the following:

Grounds for Unfair Dismissal. Any termination outside of fair grounds for termination may be considered an unfair dismissal.

Remedies. Employee(s) who believes that he/she is being terminated unfairly may reject the termination and follow the industrial relations dispute settlement process.

An employer can terminate the employment of employees because they have implemented efficiency measures followed by the closing of the workplace or where the employer suffers losses (for example, in the case of redundancy) but not necessarily as a result of the closing of the workplace.

Separately, an employer can also perform a mass termination provided that the reason for termination is a fair ground for termination (see above).

An employee terminated due to efficiency or as part of a mass termination is entitled to receive a severance package consisting of:

The procedural requirement for redundancies and mass termination follows the same procedure as other terminations (see above).

The Income Tax Law defines an individual tax resident as any individual who either:

Tax resident employees are subject to the following taxes:

The above tax and contributions are withheld by the employer and paid to the relevant authorities.

There may be additional charges for additional family members.

Non-tax resident employees are subject to a 20% flat rate of income tax, unless otherwise regulated by the relevant tax treaty between Indonesia and the non-tax resident employee's country of origin. In addition, there is a 5% final tax on the proceeds of the sale of certain assets and/or shares of an Indonesian company owned by a non-tax resident.

Employers must make the following social security contributions for their employees:

A business entity is tax resident when it is established or domiciled in Indonesia.

Non-tax resident businesses are:

A permanent establishment can be used to carry on business or conduct activities in Indonesia by:

A permanent establishment has the same tax obligations as a tax resident. Therefore, any income generated by a permanent establishment in Indonesia is taxable in Indonesia as if the income was generated by an Indonesian tax subject.

The following taxes apply to business:

Dividends paid to a non-resident taxpayer are subject to a 20% withholding tax, unless otherwise reduced by an applicable tax treaty. If a dividend is paid to a resident taxpayer and reinvested in Indonesia it is subject to 0% tax.

Dividends received from foreign companies are subject to tax, if at least 50% of the shares of the foreign company are owned by one or more resident taxpayers. If so, income tax applies to the dividends received by the resident taxpayer. If such dividend is reinvested in Indonesia and meets certain conditions under the law it will be subject to 0% tax or not subject to tax.

Interest paid to a non-resident taxpayer is subject to 20% withholding tax, unless otherwise reduced by an applicable tax treaty.

IP royalties paid to a non-resident taxpayer are subject to 20% withholding tax, unless otherwise reduced by an applicable tax treaty.

There is no express regulation restricting loans from foreign affiliates. However, there is a regulation on the maximum debt-to-equity ratio in a company. Minister of Finance (MOF) Regulation No. 169/PMK.010/2015 regarding the Stipulation of Debt-to-Equity Ratio for Income Tax Purpose states that companies' debt-to-equity ratio must be equal to or under 4:1.

In Law No. 7 of 2021 regarding Harmonisation of Tax Regulations (Tax Harmonisation Law), the government stipulates that a new regulation is to be issued on different methods to limit borrowing deductions. There are indications that this may be based on a certain ratio of loans to EBITDA (earnings before interest, taxes, depreciation and amortisation).

A foreign subsidiary's profit would be imputed to a tax resident parent company. If an Indonesian company owns at least 50% of a foreign company's shares, or the Indonesian company together with another Indonesian company owns at least 50% of a foreign company's shares, dividends on the shares of the foreign company are considered to be taxable income.

Transfer pricing occurs when a taxpayer transfers income and/or costs to another taxpayer with which it has a special relationship, under an arrangement that reduces the total outstanding amount of the tax imposed. The Directorate General of Taxation (DGT) has the authority to re-determine the amount of income and deductions, and to re-characterise debt as capital, for parties where such a special relationship exists. Taxable income would then be calculated according to fairness and ordinary business conditions that are not influenced by such a special relationship.

The DGT has issued guidelines on transfer pricing under DGT Regulation No Per-43/PJ/2010 as amended by DGT Regulation No Per-32/PJ/2011 regarding the Implementation of the Arm's Length Principle in a Transaction between Taxpayers and Parties Having a Special Relationship (DGT Reg 43/2010). Under DGT Reg 43/2010, a special relationship is deemed to exist where either:

Imports of goods are subject to:

Indonesia has entered into tax treaties with 60 countries, including the US, the UK, China and Singapore.

Competition issues in Indonesia are supervised by the KPPU. Business competition in Indonesia is regulated under the Anti-Monopoly Law. The Anti-Monopoly Law applies to any individual or business entity (whether a legal entity or otherwise) that is established and domiciled or doing business within Indonesian territory. As such, the Anti-Monopoly Law applies to foreign entities doing business in Indonesia.

Violations to the provision of the Anti-Monopoly Law may be subject to the following sanctions:

Restrictive agreements and practices are illegal under the Anti-Monopoly Law. The following agreements are considered to be illegal if they result in unfair competition or monopoly:

The following agreements are considered illegal in themselves:

Companies cannot use their dominant position, whether directly or indirectly, to stipulate terms of trade to:

The Anti-Monopoly Law defines a dominant position as a business actor controlling 50% of the market share, or two or three business actors who collectively control 75% of the market share.

Mergers and acquisitions must be reported to the KPPU if the transaction will result in either:

The KPPU must be notified within 30 days of the transaction being concluded. Due to the COVID-19 pandemic the KPPU has implemented a relaxation policy which extends the notification period to 60 days.

Control is considered to be acquired at the time when the relevant transaction is deemed complete under the laws where such transaction took place. If the transaction happens in Indonesia, control will be deemed to be acquired on the completion of the transfer of shares resulting in the change of control (that is, on the execution of a definitive sale and purchase agreement).

A transaction performed by foreign entities must also be reported to the KPPU if the value exceeds these thresholds, as well as if it is performed abroad between non-affiliated parties and could affect Indonesia's market competition.

Mergers and acquisition of businesses in certain industries such as banks are subject to sectoral regulation(s).

Further, there are additional regulations applicable to the merger of publicly listed companies.

Bribery and corruption are governed under the following laws:

Definition and Legal Requirements. Under Law No. 13 of 2016 regarding Patents, as amended by the Job Creation Law (Patent Law), patents are classified as either patents or simple patents. Patents are granted for new inventions that are applicable in industry and contain inventive steps, whereas a simple patent is for the development of an existing product or process. A simple patent is only granted to one invention. Patents and simple patents are not granted to:

Registration. The application to register a patent is filed by the applicant or their proxy to the MOLHR in writing and in Indonesian, along with a fee. The registration can be made online through the website of the Directorate General of Intellectual Property Rights (DGIP) (https://efiling.dgip.go.id/efiling/).

Enforcement and Remedies. Violations of the Patent Law are subject to criminal sanction. The lawful holder of the patent or simple patent can also submit a claim for compensation to the Commercial Court.

Length of Protection. Twenty years from the date of receipt for a patent, and ten years from the date of receipt for a simple patent. These periods cannot be extended.

Definition and Legal Requirements. Under Law No. 20 of 2016 regarding Trade marks and Geographical Indications, as amended by the Job Creation Law (Trade marks Law) trade marks can be displayed graphically in the form of a drawing, logo, name, words, letters, numbers or composition of colours, in the form of two and/or three dimensions, voice, hologram or a combination of two or more elements to distinguish goods and/or services that are produced in trade activities.

Protection. A trade mark constitutes an exclusive right granted by the state to the registered owner for a certain period of time for its own purposes or for licensing to other parties for their use. Trade mark rights are obtained after the trade mark is registered.

Enforcement and Remedies. Violations of the Trade Mark Law are subject to criminal sanction. In addition, the lawful holder of the trade mark can submit a claim for compensation and/or termination of use to the Commercial Court.

Length of Protection and Renewability. Ten years from the date of receipt. This can be extended for the same period.

Definition. Under Law No. 31 of 2000 regarding Industrial Design (Industrial Design Law), an industrial design is a creation in the shape, configuration, or composition of lines or colours, or lines and colours, or the combination thereof in a two or three-dimensional form that gives an aesthetic impression and can be realised in a two- or three-dimensional pattern and used to produce a product, good, industrial commodity or handicraft. Industrial designs must not contradict prevailing laws, public order, religion or moral values.

Registration. Registration is conducted by filing an application to the MOLHR and is subject to fees. The application can be submitted online through the DGIP website.

Enforcement and Remedies. Violations of the Industrial Design Law are subject to criminal sanction. In addition, the lawful holder of the industrial design can submit a claim for compensation and/or termination of use to the Commercial Court.

Length of Protection and Renewability. Ten years from the date of filing.

Indonesia does not provide protection for unregistered industrial designs.

Definition and Legal Requirements. Copyright is defined in Law No. 28 of 2014 regarding Copyrights (Copyright Law) as an exclusive right of a creator arising automatically on creation in a tangible form. Such creation can be in the fields of science, art and literature.

Protection. Copyright is comprised of moral and economic rights. Moral rights (to use a name or pseudonym, to change the creation or its title and so on) are attached permanently to the creator and cannot be transferred. Economic rights (to publish, duplicate, distribute the creation, and so on) can be licensed to other parties. Copyrights can be registered to prove the owner of the copyrights, but this is not required for the rights to accrue.

Enforcement and Remedies. Violations of the Copyright Law are subject to criminal sanction. In addition, the lawful holder of the copyright can submit a claim for compensation to the Commercial Court.

Length of Protection and Renewability. Depending on the type of creation and whether the holder is an individual or a company. It may last between 25 and 50 years after the date of announcement or until 70 years after the death of the creator (only for individual holders of copyrights in literature, drama, music, and arts).

Indonesia also recognises the following intellectual property rights:

Agency is regulated by the MOT under MOT Regulation No. 24 of 2021 regarding Commitments for the Distribution of Goods by Distributor or Agent (MOT Reg 24/2021). An agent must be registered and obtain a registration certificate (surat tanda pendaftaran) (STP), which is valid for up to two years and can be extended.

A foreign entity (or principal) must appoint a local agent or distributor to market its goods and services in Indonesia. An agency agreement between the principal and an agent must be notarised in the principal's origin country and legalised by an Indonesian trade attaché or an equivalent authorised representative from the Indonesian embassy of the principal's origin country.

Distribution is regulated by the MOT under MOT Reg 24/2021. A distributor must be registered and obtain an STP, which is valid for up to two years and can be extended.

A foreign entity (or principal) must appoint a local agent or distributor to market its goods and services in Indonesia. A distribution agreement between the principal and a distributor must be notarised in the principal's origin country and legalised by an Indonesian trade attaché or an equivalent authorised representative from the Indonesian embassy of the principal's origin country.

Franchising is regulated under Government Regulation No. 42 of 2007 regarding Franchise (GR 42/2007). A franchising agreement must be registered with the MOT to obtain a Franchise Registration Certificate (surat tanda pendaftaran waralaba) (STPW). An STPW is valid for five years and can be extended.

In general, e-commerce is regulated under Law No. 11 of 2008, as amended by Law No. 19 of 2016 regarding Electronic Information and Transactions (EIT Law). The government has also issued Government Regulation No. 71 of 2019 regarding the Implementation of Electronic Systems and Transactions (GR 71/2019), and Government Regulation No. 80 of 2019 regarding Electronic Commerce. In particular, GR 71/2019 contains regulations on electronic signatures. The above regulations apply to online selling to both consumers and businesses.

The MOT enacted MOT Regulation No. 50 of 2020 regarding Provisions on Business Licensing, Advertising, Guidance and Supervision of Electronic Commerce (MOT Reg 50/2020) for business conducted through electronic commerce platforms, including but not limited to online advertising/marketing. Further, the general regulatory regime for advertisements (see Question 35) also applies to marketing/advertising conducted through online platforms.

Advertising is regulated under various regulations and guidelines, including:

MOT Reg 50/2020 applies to digital advertising (in addition to the general regulations above).

There are no specific regulations on direct marketing (aside from general regulations above).

There are no regulations on promotional offers or prizes.

Indonesia regulates the protection of personal data. The EIT Law, GR 71/2019, and Minister of Communication and Informatics Regulation No. 20 of 2016 regarding Protection of Personal Data in Electronic Systems (MOCI Reg 20/2016) require any entity engaging in the transfer of private data to:

Under MOCI Reg 20/2016, violation of these provisions can result in administrative sanctions in the form of:

The Consumer Protection Law is silent on the protection of consumers’ privacy. However, under certain sectoral regulations (such as in the e-commerce, health, and financial service sectors), consumer privacy is expressly regulated and protected.

Generally, product liability is regulated under the Consumer Protection Law. Products and services must:

Several products, such as foods and drugs, are subject to additional regulatory requirements as regulated by, among others:

Main Activities. The KPPU regulates and supervises competition in Indonesia, including acting as the merger control agency in Indonesia.

Main Activities. The Ministry of Environment and Forestry enacts regulations related to environmental management and protection, including but not limited to reviewing any environmental impact assessment for various business activities in Indonesia.

W www.menlhk.go.id/

Main Activities. The Indonesian Financial Service Authority (Otoritas Jasa Keuangan) (OJK) regulates and supervises the financial services sector in Indonesia.

W www.ojk.go.id/id/Default.aspx

Main Activities. The OSS agency is the centralised and integrated business licensing service in Indonesia tasked with controlling investment and all business licence administration in Indonesia.

Financial technology (fintech) is a rapidly developing industry in Indonesia. Currently, fintech is regulated by the Bank of Indonesia and the OJK, under the following regulations: