New Regulation on Drugs Promotion and Advertising
The Indonesian Food and Drug Supervisory Agency (Badan Pengawas Obat dan Makanan or “BPOM”) enacted BPOM Regulation No. 7 of 2026 dated April 29, 2026, on Drug Promotion and Advertising (“BPOM Reg 7/2026” or the “New Regulation”). The New Regulation replaces BPOM Regulation No. 2 of 2021 dated February 3, 2021, on Guidelines for Supervision of Drug Advertising (“BPOM Reg 2/2021”).
The New Regulation is enacted pursuant Law No. 17 of 2023 dated August 8, 2023, on Health (the “Health Law”) and its implementing regulation, Government Regulation No. 28 of 2024 dated July 26, 2024, on the Implementation of Health Law (“GR 28/2024”), together with Law No. 8 of 1999 dated April 20, 1999, on Consumer Protection.
The New Regulation introduces broader and more detailed rules on pharmaceutical promotion and advertising, particularly in relation to digital advertising, prescription drug promotion, supervision, and compliance obligations. Below are the key changes introduced under the New Regulation.
♦ Expanded Scope in New Regulation
The New Regulation expands several aspects previously regulated under BPOM Reg 2/2021, including the following:
- Expanded Scope of Regulated Parties
Under BPOM Reg 2/2021, promotional and/or advertising activities for drugs that have obtained marketing authorization may only be conducted by the pharmaceutical industries holding the relevant marketing authorization (izin edar or the “Permit”).Under the New Regulation, the scope of regulated parties has been expanded to include the following entities:
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-
- pharmaceutical industry;
- pharmaceutical wholesalers/distributors (Pedagang Besar Farmasi or a “PBF”);
- pharmaceutical service facilities, which include hospital pharmacy installations, clinic pharmacy installations, and pharmacies;
- pharmaceutical electronic system providers; and/or
- other entities.
All the above, collectively, the “Regulated Parties.”
Note that the Regulated Parties may only conduct the promotion and/or advertisement of drugs that have the Permit.
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- Risk Management in Promotional Activity
The New Regulation introduces risk management obligations, whereby the Regulated Parties are now required to assess and manage risks arising from promotional activities to prevent misuse and/or illegal drugs distribution. Such risk management includes stock management, including estimated demand and disease prevalence, shelf life, supply chain integrity, and return policies. - Sponsorship as Promotion
The New Regulation expressly recognizes sponsorship as a form of promotion, allowing pharmaceutical industries and a PBF to provide sponsorships to healthcare professionals in accordance with applicable laws and regulations.
♦ New Rules on Prescription Drug Promotion
The New Regulation provides more comprehensive provisions and restrictions on the promotion of prescription drugs. The New Regulation provides more detailed stipulation on the permitted promotional media by allowing promotional activities directed to healthcare professionals through restricted-access scientific forums and digital platforms, including e-detailing platforms, professional presentations, and scientific brochures, provided that:
- the access must be restricted exclusively to medical professionals and/or healthcare workers; and
- the promotional materials must be scientifically accountable and non-misleading.
Article 37 (1) of New Regulation stipulates that the promotion of prescription drugs is prohibited from being carried out by pharmaceutical service facilities, electronic pharmaceutical system providers, and other facilities.
Further, the New Regulation imposes stricter limitations regarding the display of prescription drugs on official websites of pharmaceutical industry marketing authorization holders as part of company profiles, limiting such display to product packaging, trade name, composition, and/or drug strength only.
♦ New Requirement on Digital Advertising of Drugs
Article 16(3) of BPOM Reg 7/2026 also introduces several provisions specifically addressing digital advertising practices, one of which relates to social media content requirements. Under this New Regulation, online advertisements, including social media advertisements, must include captions, descriptions, hashtags, or similar supporting text as an integral part of each publication.
In regard to the advertisement through audiovisual media, previously BPOM Reg 2/2021 required the storyboard submissions to consist of a maximum of 6 frames per page. In the New Regulation that technical restriction is removed, provided that the storyboard is submitted in a clear and readable resolution and includes descriptions, narratives, background texts, and/or background audio for each frame.
♦ Broader Exemption of Advertisement Approvals
The New Regulation significantly expands the criteria of advertisements exempted from a prior BPOM advertisement approval (persetujuan iklan) before publication. The Regulated Parties are also not required to submit an application for a BPOM approval if the advertisements meet the following criteria.
- Advertisements that only involve a change of advertisement talents from the previously approved advertisement;
- Advertisements that only involve changes to the design, orientation, or layout of a previously approved advertisement, provided that such changes do not alter the meaning of the advertisement;
- Advertisements intended solely for internal pharmaceutical industry purposes; and/or
- Advertisements intended for medical professionals and/or healthcare professionals, which must include statements such as the following:
- “For Medical Professional Use Only” or “Hanya untuk Tenaga Medis;” and/or;
- “For Healthcare Professional Use Only” or “Hanya untuk Tenaga Kesehatan.”;
♦ Changes to Advertisement Evaluation and Supervision
Under BPOM Reg 2/2021, advertisements categorized as notification-category advertisements could be processed through a self-assessment mechanism (i.e., independent evaluation by the applicant without BPOM review, processed automatically via the SIAPIK system). The New Regulation changes this approach by requiring an evaluation by BPOM officials even for notification-category advertisements.
Under Article 25(2) of the New Regulation, the evaluation timelines by BPOM officials are as follows:
- 1 working day for notification advertisements;
- 10 working days for minor advertisements; and
- 25 working days for major advertisements.
♦ Administrative Sanctions
Compared to BPOM Reg 2/2021, the New Regulation removes the administrative sanction in the form of suspension of a Permit and introduces the revocation of Good Drug Distribution Practice (Cara Distribusi Obat yang Baik or “CDOB”) certification.
Accordingly, administrative sanctions under the New Regulation may include the following:
- warnings;
- severe warnings (peringatan keras);
- temporary suspension of activities;
- revocation of marketing authorization; and/or
- revocation of CDOB certification.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Azzahra Saffanisa Sudiardiputri (asudiardiputri@aksetlaw.com) or Shafa Femalea Sekar Nuswantari (snuswantari@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without our prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
AKSET Newsflash: New Regulation on Drugs Promotion and Advertising
Key Changes Under the New Outsourcing Regulation
On 30 April 2026, the Minister of Manpower enacted Regulation No. 7 of 2026 on Outsourcing (the “Regulation”). The Regulation introduces stricter limitations on the types of work that may be outsourced and imposes additional compliance requirements for outsourcing arrangements. The new framework is expected to significantly affect companies engaging outsourced workers in Indonesia.
We set out below key highlights of the Regulation.
♦ Background
Prior to the Job Creation Law regime, outsourcing arrangements were regulated under Law No. 13 of 2003 on Manpower (the “Manpower Law”). Article 65 of the Manpower Law limited outsourcing to supporting activities that were separate from the company’s main business activities, carried out under the user company’s instruction, constituted supporting activities only, and did not directly interfere with the production process.
Under the Job Creation Law, Article 65 was removed and Article 66 was amended. As a result, the previous statutory restrictions limiting outsourcing to supporting activities and prohibiting outsourcing of core production-related work were no longer expressly regulated under the Manpower Law. These changes were subsequently challenged before the Constitutional Court by labor unions and labor groups, which argued that the revised framework could expand outsourcing practices and weaken worker protection.
In Constitutional Court Decision No. 168/PUU-XXI/2023, the Court did not reinstate the previous restrictions under Article 65. However, the Court held that Article 64 of the Manpower Law, as amended by the Job Creation Law, was conditionally unconstitutional unless interpreted to require the Minister of Manpower to determine the categories of work that may be outsourced. This Decision formed the basis for the issuance of the Regulation.
♦ Permitted Outsourced Activities
The Regulation stipulates that the permitted outsourced activities are limited to the following:
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- cleaning services;
- food and beverage services (i.e., catering);
- security services;
- driver and transportation services for workers;
- operational support services; and
- supporting services in the mining, oil and gas, and electricity sectors.
However, the term “operational support services” is not clearly defined under the Regulation. This lack of clarity may create uncertainty regarding the scope of activities that may still be outsourced under this category and could potentially lead to differing interpretations in practice.
♦ Reporting and Registration Requirement
The Regulation also introduces a mandatory registration requirement for outsourcing agreements. Such agreements must be recorded with the relevant Manpower Office by the outsourcing company. The Manpower Office will review the agreement before issuing proof of registration. If the agreement does not comply with the Regulation, including the permitted scope of outsourced work, the registration process may be delayed or rejected.
♦ Sanctions and Transition Period
The Regulation introduces administrative sanctions for non-compliance. User companies that outsource work outside the permitted categories may be subject to written warnings and restrictions on business activities, including limitations on production capacity and the postponement of business licensing processes.
Outsourcing companies that fail to comply with their obligations under the Regulation may also be subject to administrative sanctions under Indonesia’s risk-based business licensing regime, which may include suspension of business activities, fines, and licenses revocation.
The Regulation provides a two-year transition period, allowing companies until 30 April 2028 to align their existing outsourcing arrangements with the new requirements. Companies should therefore review the scope of outsourced work and assess whether their current outsourcing structures and agreements remain compliant under the Regulation.
AKSET
Please contact Thomas P. Wijaya (twijaya@aksetlaw.com) or Muhammad Dzaki Ramadhan Al Rizal (mrizal@aksetlaw.com) for further information or if you wish discuss the above.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without our prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
AKSET Newsflash: Key Changes Under the New Outsourcing Regulation
Update on Indonesia’s Taxation Policy for Electric Vehicles: Withdrawal of Support to Electric Vehicles?
On March 6, 2026, the Minister of Home Affairs (the “MOHA”) issued Regulation Number 11 of 2026 on Bases for Imposing Motor Vehicle Taxes, Motor Vehicle Ownership Transfer Fees, and Heavy Equipment Taxes (the “Regulation”). The Regulation came into effect on April 1, 2026, and revoked the MOHA Regulation Number 7 of 2025 on Bases for Imposing Motor Vehicle Taxes, Motor Vehicle Ownership Transfer Fees, and Heavy Equipment Taxes of 2025 (the “Previous Regulation”).
Under the Regulation it is no longer express that on the motor vehicle taxes (Pajak Kendaraan Bermotor or the “PKB”) and Motor Vehicle Title Transfer Fees (Bea Balik Nama Kendaraan Bermotor or the “BBNKB”) are exempted for electric vehicles as expressly set out in the Previous Regulation. Please see below for more details.
♦ Removal of Express Tax Exemptions for Electric Vehicles
Under the Previous Regulation, specifically in Articles 3 and 6, it was clearly stipulated that electric vehicles were exempted from the PKB and the BBNKB. This policy appears to boost the public interest in purchasing electric vehicles as opposed to conventional combustion engine vehicles.
The Regulation alters the policy by not including electric vehicles, including those converted from fossil fuel-based vehicles, from the list of objects exempted from the PKB and the BBNKB. Instead, Articles 19(1) and (3) of the Regulation state that incentives shall be applied for the PKB and the BBNKB on electric vehicles based on applicable laws and regulations. The incentives are in the form of an exemption or a reduction of the PKB and the BBNKB without going into details regarding the exemption or reduction.
♦ Implementation of Regulation
Following the issuance of the Regulation and in an attempt to clarify the reduction or exemption of the PKB and the BBNKB, the MOHA issued Circular Letter No. 900.1.13.1/3764/SJ of 2026 to all Governors in Indonesia (the “Circular Letter”). As you may know, a Governor is the Head of a Province in Indonesia.
The Circular Letter states that the granting of the exemption of the PKB and the BBNKB incentives shall be determined by Governors by May 31, 2026. This means that there may not be a uniform or consistent reduction or exemption of the PKB and/or the BBNKB. In other words, Governors may issue different exemptions and/or reductions of the PKB and/or the BBNKB in different provinces.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com) or Muhammad Dzaki Ramadhan Al Rizal (mrizal@aksetlaw.com) for further information or if you wish discuss the above.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without our prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
An update on Land Valuation Rule: Highlights on Minister of Agrarian Affairs and Spatial Planning Regulation No. 3 of 2026
On February 25, 2026, the Minister of Agrarian Affairs and Head of the National Spatial Planning Agency (the “Minister”) issued Regulation No. 3 of 2026 on Land Valuation (“Regulation 3/2026”), which will come into effect on May 25, 2026.
The legal framework for land valuation in Indonesia was previously not comprehensive. Prior regulations merely mentioned or implicitly recognized the government’s authority to determine the value of plots of land. Regulation 3/2026 introduces clearer provisions regarding the object, implementation, utilization and objectives of land valuation.
We set out below several key adjustments and changes introduced under Regulation 3/2026.
♦ Products of Land Valuation
According to Article 1(1) of Regulation 3/2026, land valuation is a process undertaken to estimate the value of a plot of land or a designated zone. Land valuation may be used to determine the Land Value Zone (Zona Nilai Tanah or “ZNT”) and the Value of a Plot of Land (Nilai Bidang Tanah or “NBT”). ZNT represents a defined area comprising multiple NBTs that have relatively similar values. NBT, on the other hand, represents the value assigned to an individual plot of land. The results of ZNT and NBT are reflected in the ZNT Map and NBT Map, respectively. Both maps are made available electronically through the Minister’s land mapping application, BHUMI, or may be requested directly to land offices.
♦ Subject and Object of Land Valuation
Although the authority to conduct land valuation rests with the Minister, the actual valuation is carried out by a land appraiser, who may be either a civil servant or a non-civil servant. As mentioned earlier, land valuation may be conducted on a plot of land or for a group of plots of land (zone). Article 3 of Regulation 3/2026 states that the land subject to valuation may include both agricultural and non-agricultural land, but excludes areas designated as forest areas. It should be noted that land valuation does not take into account any building or vegetation growing on the land.
♦ Land Valuation Process
Pursuant to Article 7 of Regulation 3/2026, in conducting the land valuation, the appraiser will require two sets of data: first, the transaction data, which consists of information relating to sale and purchase activity within a certain period. Second, offering data, which consists of information on the prices at which properties are offered to potential buyers during a specific period. Furthermore, surveys may be conducted with respondents as well, including landowners who have conducted transactions or who are planning to sell their land, property agents, property developers, government officials, village heads, residents in the surrounding area.
♦ Land Valuation Update
Under Regulation 3/2026, updates to land valuation may be conducted in the event of changes to the physical form of the land. Such changes may arise from land administration services (including land registration, plot of land separation, plot of land combination, recalculation of land area, upgrade on land data) or from natural causes.
In addition, the integration of the updated Land Value Maps into the existing maps is scheduled to take place on January 1st. However, it remains unclear whether this integration is intended to occur as one-time update or as an annual process.
This development may be relevant for businesses in the real estate sector, as it provides a reference for the most up-to-date land values.
♦ Utilization of Land Valuation Map
Regulation 3/2026 provides that the Land Valuation Map may be utilized to support land related and spatial planning services, as well as other interests related to land value.
Land value zones serve several important functions, including the following:
1. Guidance for determining the Sale Value of Taxable Object (Nilai Jual Objek Pajak or NJOP);
2. Support for spatial planning, assisting the government in conducting urban planning;
3. Enhancement of transparency in the property market by providing the public with reasonable references for land prices;
4. References for investment planning, particularly in relation to land and land rights.
AKSET
Please contact Adhitya Ramadhan (aramadhan@aksetlaw.com) or Muhammad Dzaki Ramadhan Al Rizal (mrizal@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without our prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Indonesia’s Buy-Now-Pay-Later Legal Framework
Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan or “OJK”) has formally introduced a regulatory framework governing the Buy Now Pay Later (the “BNPL”) services through the issuance of OJK Regulation No. 32 of 2025 on Provisions of Buy Now Pay Later (“Regulation 32/2025”). Regulation 32/2025 took effect upon its promulgation in December 2025, marking a significant milestone in the regulation of digital financial services in Indonesia.
♦ Scope and Eligible Providers of BNPL
Under Regulation 32/2025 BNPL services may be provided by the following financial service institutions (lembaga jasa keuangan or an “LJK”):
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- commercial banks (the “Banks”); and
- financing companies,
(collectively, the “Providers”).
Under Regulation 32/2025 BNPL services provided by Banks must be in accordance with the banking laws and regulations. Meanwhile, financing companies may only provide BNPL services after obtaining a prior approval from OJK. The procedures for obtaining such approvals will be determined by OJK in due course.
♦ Characteristics of BNPL Services
BNPL services provided by the Providers must have the following characteristics:
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- BNPL services are only for the purpose of financing purchase of goods or services;
- BNPL services are without any encumbrance;
- there is a maximum amount of financing of the BNPL services;
- repayment of the principal amount and payment of the interests must be based on an agreement with users;
- approvals from users may be based on face-to-face electronic meetings or non-face-to-face electronic meetings; and
- BNPL services are done through the electronic systems.
♦ Obligations of Providers of BNPL Services
Regulation 32/2025 provides that BNPL services may be provided conventionally or based on sharia principles by the Banks and the financing companies. In this regard, Regulation 32/2025 introduces a number of substantive obligations aimed at strengthening prudential oversight and consumer protection in BNPL services, which include the following:
- Prudential Principles and Consumer Protection
The Providers must apply prudential principles in providing the BNPL services in accordance with applicable laws and regulations. This includes establishing internal policies and guidelines to assess the eligibility of BNPL customers, implementing consumer protection principles (as currently regulated under OJK Regulation No. 22 of 2023 on Consumers and Public’s Protection Within the Financial Services Sector (“Regulation 22/2023”)), and ensuring the protection of customers’ or debtors’ personal data in compliance with prevailing data protection laws and regulations.
- Cooperation with Third Parties
The Providers may cooperate with third parties (for instance, e-commerce/marketplace) based on cooperation agreements. However, these cooperation agreements remain subject to customer information disclosure obligations.
- Information Disclosure
The Providers are required to provide, disclose, and market BNPL services transparently to prospective or existing customers in accordance with Regulation 22/2023. Information to be disclosed through electronic systems includes the source of financing funds, the amounts and the payment installments, and/or other information as determined by OJK.
Note that failure to disclose the required information may subject the Providers to the imposition of administrative sanctions by OJK. These sanctions may be as follows:
-
-
- written reprimands;
- partial or full restriction of products and/or services and/or business activities;
- partial or full suspension of products and/or services and/or business activities;
- dismissal of management;
- administrative fines, up to a maximum of Rp 15,000,000,000; and/or
- revocation of issued permits.
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- Collection Practices
The collection of BNPL payments must be carried out in compliance with Regulation 22/2023.
- Reporting Obligations
The Organizers are required to prepare reports on the implementation of their BNPL services and submit such reports to OJK in accordance with applicable laws and regulations.
♦ Transition Period for Existing BNPL Services
Recognizing that BNPL products have already been widely offered prior to the issuance of the Regulation 32/2025, there is a six-month transition period from the enactment of Regulation 32/2025 up to June 15, 2026. During such period, the Providers that currently provide BNPL services must align their existing products and operational frameworks to ensure full compliance with Regulation 32/2025.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Adhitya Ramadhan (aramadhan@aksetlaw.com), or Azzahra Saffanisa Sudiardiputri (asudiardiputri@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without our prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
AKSET Newsflash: Indonesia’s Buy-Now-Pay-Later Legal Framework
Constitutional Court Extends Statute of Limitation for Industrial Dispute Claims Submission by Employees
On September 17, 2025, the Constitutional Court (the "Court") rendered its decision in Case No. 132/PUU-XXIII/2025 (the “Decision”). The case relates to the judicial review of Law No. 2 of 2004 dated January 14, 2004 (effective January 14, 2005) on Industrial Relation Dispute Settlements (“Law 2/2004”).
The petitioner, an employee whose employment had been terminated on October 31, 2023 (the “Petitioner”), sought a judicial review of Article 82 of Law 2/2004. The Petitioner contended that this Article, which had gone under judicial review twice prior to this, violates his constitutional rights according to the 1945 Constitution of the Republic of Indonesia (the “Constitution”), and as such deems the Article to be in direct conflict with the Constitution.
We set out below the key arguments of the Petitioner and the Decision of the Court.
♦ Petitioner’s Argument
The Petitioner argues that Article 82 of Law 2/2004, which reads as follows:
“a claim from employee over employment termination may be filed only within 1 (one) year since the decision had been received or notified by the employer,”
imposes an unreasonable statute of limitation for the filing of claims over employment termination by employees.
The Petitioner further explains that the statute of limitation fails to account for disadvantages that render employees unable to take action within a short time period, such as financial pressure, lack of legal knowledge, lengthy mediation or conciliation negotiation processes, and dependence of documents from the employer. Furthermore, the Petitioner argues that Article 82 of Law 2/2204 favors uncooperative employers who choose to delay the process in order to entirely avoid claims from employees whose employment is terminated.
Based on the abovementioned, the Petitioner states that Article 82 of Law 2/2004 conflicts with the right to fair legal certainty and special treatment ensuring equality as set out in Article 28D paragraph (1) and Article 28H paragraph (2) of the Constitution respectively. Further, the Petitioner proposes that Article 82 of Law 2/2004 must be interpreted as “a claim from employee over employment termination may be filed only within 3 (three) year since the [termination] decision is received or notified by the employer.”
♦ Court Decision
Considering the Petitioner’s argument, the Court acknowledges that the 1 (one) year limitation indeed caused legal uncertainty and inequality. The Court then partially grants the petition by first rejecting the Petitioner’s proposed interpretation and continuing by ruling that Article 82 of Law 2/2004 must be interpreted as "a claim by an employee regarding termination of employment may only be filed within a period of 1 (one) year from the failure to reach an agreement in mediation or conciliation negotiations.”
♦ Impact of Decision
The Court’s decision grants employees significantly more time to challenge employment terminations, since the countdown now begins after mediation or conciliation fails, rather than from the termination notice by an employer.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Thomas P. Wijaya (twijaya@aksetlaw.com), or Giorgio Alexander William Robot (grobot@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Associations in Indonesia: Key Changes Under the New Minister of Law Regulation
On May 19, 2025, the Minister of Law (“MOL”) issued Regulation No. 18 of 2025 on the Procedures for Submission of Applications for Ratification, Approval of Amendment to the Articles of Association, and Termination of the Legal Entity Status of Associations (the “Regulation”). The Regulation replaces and revokes the Minister of Law and Human Rights Regulation No. 3 of 2016 as amended by Minister of Law and Human Rights Regulation No. 10 of 2019 (the “Previous Regulation”).
The Regulation was issued to enhance service quality and provide legal certainty in the administration of associations (in Indonesian, Perkumpulan or an “Association”), particularly regarding the termination of an Association’s status as a legal entity. The Regulation came into force on May 28, 2025.
Below we set out the key highlights of the Regulation.
♦ Definition of an Association
The Previous Regulation defined an Association as “a legal entity which consists of a group of people established to realize certain common goals and objectives in the social, religious and humanitarian fields and does not distribute profits to its members.” The Regulation introduces a revised definition, referring to an Association as “a legal entity established by a group of people who have the same intentions and goals to develop and empower its members and is non-profit.”
The change in definition suggests the emphasis from broader social, religious, and humanitarian purposes to the development and empowerment of members, while retaining the Association’s non-profit nature.
♦ Application for Association Name Approval
In addition to the requirements as set forth in the Previous Regulation, under the Regulation, applicants submitting for an Association name approval must also provide: (i) a description of the purpose of establishing the Association and the background for the use of the proposed name, and (ii) the address of the Association.
The Regulation further clarifies that the verification process to obtain the Association name approval shall be at most 14 days since the application is submitted to the Directorate General of Legal Administrative Affairs in the Legal Entity Administration System (Sistem Administrasi Badan Hukum or “SABH”).
♦ Association Naming Conventions
The Regulation introduces new provisions related to the naming convention of Associations. The use of regional language or foreign language is allowed, as long as it has historical, customary, cultural, and/or religious value, and using synonyms for Association (e.g., persatuan, ikatan) are allowed as long as it is not used as differentiating words from the name of an already registered Association. For reference, below is a table of the list of criteria that applicants must adhere to for the naming of an Association as of the enforcement of the Regulation.
♦ Application for Approval and Amendment
Under the Regulation, application for an Association’s status as a legal entity must attach a list of Association members who have voting rights in members' meetings (or other by terms). This also applies to applications for amendments to an Association’s articles of association. Amendments to the articles of association may include changes to the Association’s name, activities, management, legal domicile, and/or other information set out in the articles of association.
Similar with the procedures for other legal entities, applications for an Association’s status as a legal entity and for amendments to its articles of association must be submitted by a notary through the SABH.
Additionally, the Regulation now enforces that applications for the approval of an Association’s status as a legal entity must be submitted within 30 days since the signing of the Association’s deed of establishment.
♦ Application for Termination of an Association’s Status as a Legal Entity
The Regulation introduces provisions governing the termination of an Association’s status as a legal entity. Under applicable laws and regulations, an Association’s legal entity status may be terminated due to, among others, the Association has accomplished its goal or reached the end of its period according to its articles of association or there is a legal and binding court decision ordering the termination of the Association’s status as a legal entity.
Application for such terminations are done by the notary by submitting an electronic application to SABH.
AKSET
Please contact Inka Kirana (ikirana@aksetlaw.com), Thomas P. Wijaya (twijaya@aksetlaw.com), or Giorgio Alexander William Robot (grobot@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Utilization of Embedded Subscriber Identity Module (e-SIM)
On April 11, 2025, the Minister of Communication and Digital issued Regulation No. 7 of 2025 on the Utilization of Embedded Subscriber Identity Module (“e-SIM”) Technology in Telecommunication Implementation (the “Regulation”).
The Regulation responds to technological innovation and the increasing ease of e-SIM utilization by telecommunications services subscribers, whether via mobile or satellite networks provided by telecommunication providers. The Regulation also aims at supporting the expansion of machine-to-machine (M2M) communication systems and Internet of Things (IoT). We set out below the key highlights of the Regulation relating to the utilization of e-SIM.
- Key Obligations for Telecommunication Providers in relation to e-SIM UtilizationThe implementation of the e-SIM technology may only be carried out by telecommunications providers classified as Mobile Cellular Network Operators and Satellite Mobile Network Operators (collectively, the “Providers”). The Providers are required to fulfill several key obligations as follows:
- System Provisioning: Providers must establish and operate systems that support the use of local International Mobile Subscriber Identity Numbers (the “IMSI Numbers”) and manage subscriptions involving local Mobile Subscriber Integrated Services Digital Network Numbers and the IMSI Numbers. In relation to the provision and operation of system provisioning, the Providers may cooperate with third parties that meet the requirements set forth in the Regulation.
- Customer Registration: The Providers are required to carry out customer registration in accordance with applicable laws and regulations.
- e-SIM Profile Storage and Protection: e-SIM profiles must be secure and protected within the provisioning system. The Providers must implement and comply with standard operating procedures aligned with data protection and privacy regulations.
- Data Security Certification: The Providers must meet the certification requirements under the approved data security accreditation scheme for their provision systems.
- Monitoring and Evaluation of e-SIM Utilization
The Government has enacted regulatory measures to monitor and evaluate such utilization of the implementation of e-SIM. This oversight shall be conducted based on report by the Providers, public complaints and/or on-site inspections. Failure by the Providers to fulfill obligations under this Regulation may result in administrative sanctions, including a written warning and/or public disclosure of the violation. - Transitional Provisions Upon Enactment of Regulation
The Providers and any other parties that implemented e-SIM utilization prior to the Regulation are granted a two-year transitional period to achieve full compliance with its provisions.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com) or Unisya Izhari Rinsta Savira (usavira@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Utilization of Embedded Subscriber Identity Module (e-SIM)
Regulatory Update: Minister of Law Issues New Regulation on Verification and Supervision of Corporate Beneficial Ownership
As part of the Indonesian government’s efforts to prevent money laundering and terrorism financing (TPPU/TPPT) and to optimize the accuracy of beneficial ownership data, on 4 February 2025, the Minister of Law issued Minister of Law Regulation No. 2 of 2025 on Verification and Supervision of Corporate Beneficial Ownership (“MOL Reg. 2/2025”). This new regulation revokes the previous Minister of Law and Human Rights Regulation No. 21 of 2019 on Procedures for the Supervision of The Know-Your Beneficial Owner Principle in Corporations.
MOL Reg. 2/2025 is also issued to accommodate several challenges, including the need for a centralized beneficial ownership database, the absence of verification requirements for individual limited liability companies, and the low compliance rate in beneficial ownership reporting.
Below are the key changes introduced under MOL Reg. 2/2025.
♦ Expansion of Corporate Entities Subject to Regulation
MOL Reg. 2/2025 broadens the scope of entities required to report beneficial ownership information. This new regulation now includes civil partnerships and provides further clarification on limited liability companies (Perseroan Terbatas or PT) by categorizing them into capital partnership companies (perseroan persekutuan modal) and individual companies (perseroan perorangan).
♦ Verification of Beneficial Ownership
MOL Reg. No. 2/2025 introduces a risk-based verification process. This verification is conducted to assess risks related to money laundering and terrorism financing and must be performed by corporations, notaries, the Minister of Law, and other relevant authorities. The verification process involves assessing the accuracy of beneficial ownership information against supporting documents. The electronic system will subsequently calculate the consistency and accuracy of the submitted data in comparison with the information provided in the beneficial ownership questionnaire completed by the company.
♦ Administrative Sanctions
While the previous regulation did not specifically prescribe sanctions for non-compliance, under Chapter VII of MOL Reg. 2/2025, a structured system of administrative sanctions has been established. These sanctions may be imposed if a corporation fails to report its beneficial ownership information to the Ministry of Law or if the information submitted is found to be inaccurate. The regulation specifies the types of sanctions and the procedures for their imposition, which include:
- Warning letters;
- Blacklisting; and
- Blocking access to the General Law Administration (Administrasi Hukum Umum or AHU) Online system.
This regulatory update reflects the government’s commitment to enhancing transparency in corporate ownership and aligning Indonesia’s legal framework with international best practices in preventing financial crimes.
AKSET
Please contact Inka Kirana (ikirana@aksetlaw.com) or Natasya C. Ferdev (nferdev@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Withholding and Payment of Income Taxes on Other Contractor's Income and/or Participating Interests
On October 14, 2024, the Minister of Finance (the “MOF”) enacted the MOF Regulation Number 81 of 2024 on Taxation Provisions for the Implementation of the Core Tax Administration System (the “Regulation”). The Regulation came into force as of January 1, 2025. The Regulation is an omnibus regulation that consolidates and updates various tax rules to enhance the new Core Tax Administration System. Its objective is to modernize tax administration by ensuring transparency, efficiency, and accountability through advanced IT systems, improved business processes, and comprehensive databases.
Due to the extensive range of provisions covered in the Regulation, this Newsflash only discusses the procedures for the withholding income taxes in respect of a contractor’s income in the upstream oil and gas business. These provisions were previously regulated under MOF Regulation Number 257/PMK.011/2011 dated December 28, 2011 on Procedures for Withholding and Payment of Income Taxes on Contractors’ Other Income in the Form of Uplifts or Other Similar Rewards and/or Contractors’ Income from Transfer of Participating Interests (the “Previous Regulation”).
♦ Withholding Tariff of Income Tax
Under the Regulation, there are no significant changes regarding the withholding of income taxes for an Oil and Gas Cooperation Contractor (the “Contractor”) on any income other than cooperation income. Specifically, for income in the form of any Uplift and/or a transfer of Participating Interests, the following tariffs apply:
- Uplift (or other similar compensation): 20% (twenty percent) of the gross amount
- Transfer of participating interests:
- 5% (five percent) of the gross amount for transfers during the Exploration Period (from the effective date of the Cooperation Contract until the approval of the first field development plan in a Contractor’s work area). The transfer is exempt from income tax if it meets the following criteria:
- not transfer all of the Participating Interests owned;
- Participating Interests are owned for more than 3 (three) years;
- in the work area, the exploration has been carried out and the Contractor has made investments to carry out the exploration; and
- the transfer of the Participating Interests by the Contractor is not intended to make a profit, and
- 7% (seven percent) of the gross amount for transfers during the Production Period (from the end of the exploration period until the end of the Cooperation Contract). This transfer is exempt from any income tax if conducted to fulfill the transfer obligations of Participating Interests to national companies as stipulated in the relevant Cooperation Contract.
- 5% (five percent) of the gross amount for transfers during the Exploration Period (from the effective date of the Cooperation Contract until the approval of the first field development plan in a Contractor’s work area). The transfer is exempt from income tax if it meets the following criteria:
♦ Taxation of Participating Interests Transfers
Under the Regulation, the basis for imposing the income tax on a transfer of the Participating Interests is:
- the amount actually received or obtained by the Contractor; or
- the amount that should have been received or obtained if there is a special relationship between the parties involved in the transfer.
Article 211 of the Regulation mandates that Contractors transferring Participating Interests must report the transfer value to the Tax Services Office where they are registered. The report must include the Participating Interest Transfer Agreement and the Financial Quarterly Report for the last quarter prior to the transfer. This report must be submitted within 14 (fourteen) business days from the signing date of the agreement. If the recipient Contractor is not registered as a Taxpayer, the reporting obligation falls on the transferring Contractor. Non-compliance with these requirements allows the Director-General of Tax to determine the transfer value ex officio.
Article 213 of the Regulation provides that the income tax becomes payable at the earlier of the following events: at the time of payment, at the time of the transfer of Participating Interests, or upon approval of the transfer by the minister overseeing energy and mineral resources. The receiving Contractor must withhold the tax and issue proof of withholding.
Under Article 213(3) of the Regulation, if the recipient Contractor is not yet registered as a taxpayer, the withholding, deposit, and reporting must occur after the recipient’s registration.
Meanwhile, if the transfer of Participating Interest is carried out indirectly and does not change the Taxpayer Identification Number (in Indonesia, Nomor Pokok Wajib Pajak), the Contractor transferring the Participating Interests is required to pay the income tax payable directly no later than the 15th (fifteenth) day of the following month after the relevant tax period.
♦ Uplift or Other Similar Compensation
Article 212 of the Regulation regulates that the income text in the form of Uplift or other similar compensation is payable at the time income in the form of Uplift or other similar compensation is paid or recognized as an expense, depending on which one occurs first. The Contractor making the Uplift payment must withhold the tax and issue proof of withholding/collection in accordance with applicable laws and regulations.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com) or Arthur Basa Okuli Nainggolan (anainggolan@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.