New Regulation on Legalization of Cooperatives: Facilitating Merah Putih Cooperatives
On April 23, 2025, the Minister of Law issued Regulation No. 13 of 2025 on Legalization of Cooperatives (the “Regulation”). This Regulation replaces the Minister of Law and Human Rights Regulation No. 14 of 2019 on Legalization of Cooperatives (the “Previous Regulation”). The Regulation aims at supporting the formation of Koperasi Merah Putih (the “Merah Putih Cooperatives”) as instructed by President Prabowo.
We set out below the key highlights of the Regulation.
♦ Background
Prior to the issuance of the Regulation, on March 27, 2025, President Prabowo issued Presidential Instruction No. 9 of 2025 on Acceleration of Formation of Merah Putih Cooperatives. With this Presidential Instruction the President wishes to establish 80,000 Merah Putih Cooperatives across Indonesia as part of the Golden Indonesia 2045 Vision (Indonesia Emas 2045). Following this, the Minister of Law issued the Regulation to facilitate the formation and organization of these cooperatives by integrating them into the national cooperatives’ administration and streamlining the legalization process.
♦ Valid Applicants
The Regulation clarifies that founders of cooperatives are allowed to authorize a notary to submit applications to the Minister of Law through the Director General of Legal Administrative Affairs. In the Previous Regulation, it was unclear whether only attorneys of the founders could grant such authority or whether founders themselves could also do so.
♦ New Types of Cooperatives
Under the Previous Regulation, cooperatives include those operating in the fields of consumers, producers, services, savings and loans, and village unit cooperatives. The Regulation adds this list by introducing the Merah Putih Cooperatives and allowing for the inclusion of other types of cooperatives that may be established by future regulations and government programs.
While most cooperatives must comply with specific naming conventions, the Merah Putih Cooperatives are subject to a different set of rules. Merah Putih Cooperatives must use the name of the village (desa) and ward (kelurahan) in which the cooperatives are located. If there are multiple villages with the same name, the name of the sub-district (kecamatan) and regency (kabupaten) must also be included in the cooperative’s name to ensure clarity and distinction.
In addition, the Regulation requires cooperatives operating under syariah principles to include the word “Syariah” at the end of their names.
♦ Simplification of Printing of Deeds
Under the Previous Regulation, cooperative governance documents issued by the Minister of Law, including deeds of establishment, deeds of amendment to a cooperative’s articles of association, and acknowledgements of report receipt, were required to be printed by recipients on F4/folio-sized white paper with a minimum weight of 80 grams.
The Regulation removes these paper specifications, allowing recipients to print such documents on any type or size of paper which provides flexibility and reduces the administrative burden.
♦ Amendment to Cooperative Articles of Association Process
The Regulation clarifies the procedure for submitting applications to amend a cooperative’s articles of association. Under the Regulation, such applications must now be submitted to the Minister of Law through the Director General of Legal Administrative Affairs, whereas the Previous Regulation required direct submission to the Minister of Law.
In addition, the Regulation specifies the supporting documents that must be retained by notaries in connection with amendments to the articles of association. These include (i) the minutes of the notarial deed reflecting the amendment, (ii) the minutes of the members’ meeting approving the amendment; and (iii) in the case of amendments resulting from a merger or spin-off, the updated balance sheet of the cooperative that either receives the merger or is spun-off.
Furthermore, the Regulation introduces a new requirement for applicants to complete an electronic statement, a step that was not previously required under the Previous Regulation.
The Regulation introduces an additional requirement specifically for savings and loan cooperatives and cooperatives with a savings and loans business unit. When submitting an application to amend their articles of association, these cooperatives are required to include the following documents as part of their application: (i) a work plan for a minimum of 3 (three) years, (ii) documentation on administration and bookkeeping, (iii) the names and curriculum vitae of prospective managers, and (iv) a list of work facilities.
♦ Non-Electronic Application
The Regulation now allows non-electronic applications under certain circumstances. Specifically, if the notary is domiciled in a place that does not have internet access or if the Minister of Law announces that the administrative system is experiencing operational disruptions, applications for the establishment and amendment of a cooperative may be submitted through non-electronic means. The procedures for such submissions will be further regulated by the Director General of Legal Administrative Affairs.
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.
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