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”):
-
- 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:
-
- 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.
-
- 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
New Rules for Limited Liability Companies: Highlights of Minister of Law Regulation No. 49 of 2025
On December 11, 2025, the Minister of Law (the “Minister”) enacted Regulation No. 49 of 2025 on the Requirements and Procedures for the Establishment, Amendment, and Dissolution of Limited Liability Company Legal Entities (“Regulation 49/2025”), which regulation came into effect as of December 17, 2025.
Regulation 49/2025 revokes and replaces the Minister of Law and Human Rights Regulation No. 21 of 2021 on the Requirements and Procedures for the Registration of the Establishment, Amendment, and Dissolution of Limited Liability Company Legal Entities (the “Previous Regulation”). Regulation 49/2025 aims at optimizing and streamlining the implementation of legal services for limited liability companies (or perseroan terbatas in Indonesian, a “PT”). Similar to the Previous Regulation, Regulation 49/2025 applies to a PT established as a joint capital company (a perusahaan persekutuan modal PT) and a personal PT (a perusahan perorangan PT).
In this Newsflash, we highlight the key changes introduced under Regulation 49/2025.
♦ Submission of Annual Reports to the Minister
Now Regulation 49/2025 requires a perusahaan persekutuan modal PT to submit an annual report (the “Annual Report”) to the Minister. This requirement was not in the Previous Regulation. According to Article 16 of Regulation 49/2025, a PT’s Board of Directors must submit the Annual Report to the PT’s general meeting of shareholders (a “GMS”) within 6 (six) months after the end of the PT’s financial year.
Further, Regulation 49/2025 requires the Annual Report (that is approved by a GMS) to be recorded in a notarial deed and subsequently submitted to the Minister within 30 (thirty) days since the date the notarial deed is signed.
Regulation 49/2025 further provides for the imposition of administrative sanctions if a PT fails to submit the Annual Report within the timeframe set by the Minister. There are 2 (two) administrative sanctions that may be imposed for failure to submit the Annual Report, namely (i) a written warning, if a PT exceeds the deadline for submitting the notarial deed of the approved Annual Report, and (ii) a blockage of access to the corporations’ database maintained by the Minister, if a PT fails to fulfill its obligation within 30 (thirty) calendar days after receiving the written warning.
♦ Beneficial Owners of PTs
Unlike the Previous Regulation, Regulation 49/2025 requires a PT to provide information regarding its beneficial owner(s). Under Regulation 49/2025, a beneficial owner is defined as an individual who (i) has the authority to appoint or dismiss members of a board of directors, a board of commissioners, a board of management, a board of trustees, or a board of supervisors of a corporation, (ii) has the ability to control a corporation, (iii) is entitled to and/or receives benefits from a corporation, either directly or indirectly, and (iv) is the true owner of the funds or shares of a corporation, and/or (v) satisfies the criteria set out in applicable laws and regulations.
In submitting an application for the establishment of a PT, an application for amendments to the articles of association of a PT, and an application for changes to a PT’s data, the PT must provide the information regarding its beneficial owner(s).
The detailed requirements on beneficial owners are regulated in Minister of Law Regulation No. 2 of 2025 dated January 4, 2025, on Verification and Supervision of Beneficial Owners of Corporations. This regulation provides a comprehensive legal framework governing how corporations must identify, verify, report, and maintain information on their beneficial owners.
♦ Clarification on Notaries’ Role
Under Regulation 49/2025, the involvement of a notary in the submission of applications for amendments to the articles of association and changes to company data to the Legal Entity Administration System (Sistem Administrasi Badan Hukum or “SABH”) is explicitly detailed. This provides clarification compared to the Previous Regulation, which did not expressly address the involvement of a notary in such submissions, although in practice these matters have consistently been handled by notaries.
♦ Re-appointment of Board of Commissioners and Board of Directors Affecting a PT’s Data
Pursuant to Article 12 of Regulation 49/2025, the re-appointment of directors and commissioners of a PT must be reported to update the PT’s data maintained by the Minister. This differs from the Previous Regulation, which only required updates in the event of changes to the composition, names, or positions of members of the Board of Directors and the Board of Commissioners.
We note the requirement to submit the Annual Reports under Regulation 49/2025 as stated above. This practically means that a perusahaan persekutuan modal PT (including a foreign capital investment PT or also known as a PT PMA) must convene an annual GMS to approve the relevant Annual Report, restate such approval in a notarial deed, and submit the notarial deed to the Minister. As noted above, there are consequences if a PT fails to comply with this. Please do not hesitate to contact us if you have any questions or require further information about how we may assist you in this matter.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Thomas P. Wijaya (twijaya@aksetlaw.com), or Shafa Femalea S. 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 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.
Constitutional Court Adjusts Land Rights Provisions For New Capital
On November 13, 2025, the Constitutional Court (in Indonesian, Mahkamah Konstitusi or “MK”) rendered its Decision No. 185/PUU-XXII/2024 (the “Decision”) in relation to the judicial review on Articles 14 and 16A (1), (2), and (3) of Law No. 3 of 2022 on Capital City as lastly amended by Law No. 21 of 2023 (the “Law”). This Decision affects the previously permitted long-term land tenure arrangements, which had allowed cumulative rights extending up to 190 years.
Under the Decision, MK decides that the previous provision allowing consecutive cycles (totaling 190 years) for land-use rights in Ibu Kota Nusantara (“IKN”) is unconstitutional. MK reinterprets the Law in this regard as follows:
- For a right to cultivate (Hak Guna Usaha), the maximum total period under one cycle is reduced to 95 years; and
- For a right to use building (Hak Guna Bangunan or a “HGB”) or right to manage (Hak Pengelolaan), the maximum durations are also scaled back — for an HGB: an initial grant of 30 years, extension 20 years, and renewal 30 years under evaluation.
General Elucidation of the Law, MK notes that one of the primary aims of the amendment to Law No. 21 of 2023 was to introduce a more competitive regime for land-rights duration. MK indicates that the previous stipulation tends to weaken the State’s position in exercising control over land rights as envisioned under the Constitution, as stated by one of the Justices, who emphasized that an excessively long accumulation of right—reaching up to 190 years—effectively diminishes the State’s ability to reassess, adjust, or reassert its authority over land for the benefit of the public.
While certain investment-related incentives will require adjustment to reflect the Decision, government officials have indicated their commitment to ensuring that existing and prospective investors continue to receive clear guidance and facilitative policies within the revised legal framework.
As a result of the Decision, investors that have entered into land utilization agreements with the Nusantara Capital Authority (Otorita Ibu Kota Nusantara), which serve as the underlying agreements for the development of land in IKN, may need to consider revisiting the agreed terms and conditions under those agreements.
We will continue to monitor subsequent regulatory changes and implementing measures as the Government adapts the land administration regime for IKN following the Court’s decision.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Adhitya Ramadhan (aramadhan@aksetlaw.com), or Ammarsyarif G. Goenawan (agoenawan@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.
Constitutional Court Adjusts Land Rights Provisions For New Capital
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.
Indonesia’s New Regulations on Imports
Imports are now governed in more detail in the Minister of Trade Regulation No. 16 of 2025 on Import Policies and Regulations (the “Regulation”). Effective as of August 29, 2025, the Regulation replaces Minister of Trade Regulation No. 36 of 2023 (“MOTR 36/2023”), including its subsequent amendments. The Regulation is the first in a series of new rules introduced as part of the Government’s reform of import policies.
The reform aims to strengthen both the national and regional economies in the face of an uncertainty climate by streamlining import procedures and supporting key sectors to encourage new investment. This commitment is further reflected in 8 (eight) additional regulations issued concurrently with the Regulation, all of which took effect on the same date, namely:
- Minister of Trade Regulation 17 of 2025 on Policies and Regulations on Imports of Textiles and Textile Products;
- Minister of Trade Regulation 18 of 2025 on Policies and Regulations on Imports of Agricultural and Livestock Goods;
- Minister of Trade Regulation 19 of 2025 on Policy and Regulation of Salt and Fishery Commodity Imports;
- Minister of Trade Regulation 20 of 2025 on Policy and Regulation of Imports of Chemicals, Hazardous Materials, and Mining Materials;
- Minister of Trade Regulation 21 of 2025 on Policies and Regulations on Imports of Electronic and Telematics Goods;
- Minister of Trade Regulation 22 of 2025 on Policies and Regulations on the Import of Certain Industrial Goods;
- Minister of Trade Regulation 23 of 2025 on Policies and Regulations on Imports of Consumer Goods; and
- Minister of Trade Regulation 24 of 2025 on Policy and Regulation of Imports of Goods in Non-New Condition and Non-Hazardous and Toxic Waste.
The Regulation introduces a more structured framework and greater ease of application for entrepreneurs, especially Importers, compared to the previous regulations. We set out below the notable changes introduced by the Regulation include:
♦ Ease of Conversion of API-U to API-P Status
Under MOTR 36/2023, an Importer was required to obtain a Business Identification Number/Nomor Induk Berusaha (an “NIB”), which also served as an Importer Identification Number/Angka Pengenal Impor (an “API”). An Importer could only select either: (i) a General Importer Identification Number /Angka Pengenal Impor Umum (an “API-U”), for goods intended for resale or transfer; or (ii) a Producer Importer Identification Number /Angka Pengenal Impor Produsen (an “API-P”), for goods intended for own use as capital goods, raw materials, auxiliary materials and/or production purposes.
Conversion from an API-U to an API-P was permitted only if 2 (two) conditions were met: (i) the Importer had completed all imports under its existing Import Permit/Persetujuan Impor and/or Surveyor Report/Laporan Survey; and (i) the NIB linked to the API-U had been valid for at least 1 (one) year.
The Regulation relaxes these requirements by allowing the conversion to be made if the Importer does not currently hold a valid Import Permit and/or Surveyor Report, or, if such a permit is held, no imports are being realized under it. This change enables Importers to immediately adjust their status without being subject to the 1 (one) year inactivity waiting period.
♦ Expanded Exemptions for API-P Holders
MOTR 36/2023 prohibited Importers holding an API-P from trading or transferring their imported goods. However, exceptions to such prohibitions were provided with respect to the following goods:
- residual raw materials and/or auxiliary materials;
- capital goods imported in new condition by an API-P holder and used for at least 2 (two) years;
- manufactured goods serving as complementary goods, for market testing and/or after-sales service; and
- goods traded or transferred by entities holding oil and gas processing and/or trading licenses issued by the Minister of Energy and Mineral Resources.
The Regulation expands this exemption by covering capital goods, raw materials, auxiliary materials, and/or materials supporting the production process, provided that such goods are subsequently re-exported in a quantity not exceeding the volume declared in the Import Customs Notification.
♦ Updated Structure of Administrative Sanction Framework
In contrast to the provisions under MOTR 36/2023, the Regulation establishes a clearer and more structured framework for administrative sanctions. It specifies 11 (eleven) types of administrative sanctions, which may be imposed either progressively or directly, in cases of violations such as inconsistencies in licensing documents, inaccurate in information provided in license applications, importing goods not in conformity with the relevant license, or importing goods without the required surveyor’s report. These sanctions consist of the following:
- electronic warning;
- written warning;
- suspension of business licensing in the import sector;
- revocation of business licensing in the import sector;
- suspension of certificate;
- revocation of certificate;
- recommendation for revocation of surveyor report;
- suspension of the process for issuance, amendment, or extension of business licensing in the import sector;
- suspension of the process for issuance or amendment of certificate;
- recommendation for suspension of Verification or Technical Tracing services; and/or
- recommendation for revocation of NIB that serves as API-U or API-P.
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.
Indonesia’s New Regulations on Imports
Constitutional Court Clarifies Mandatory Personal Data Protection Officers Through Critical Wording Change
Constitutional Court Clarifies Mandatory Personal Data Protection Officers Through Critical Wording Change
On July 30, 2025, the Constitutional Court (the "Court") rendered its decision towards Case No. 151/PUU-XXII/2024 (the “Decision”). The case was submitted and examined for the judicial review of Law No. 27 of 2022 dated October 17, 2022 on Personal Data Protection (the “PDP Law”).
The petitioners, Mr. Eric Cihanes and Mr. Garin Arian Reswara (collectively, the “Petitioners”), sought a judicial review of Article 53(1) point b of the PDP Law. The Petitioners contended that the wording in this provision causes uncertainty regarding the conditions under which personal data protection is implemented, thereby conflicting with the constitutional right to protection as stipulated by the 1945 Constitution of the Republic of Indonesia (the “Constitution”).
We set out below the key arguments of the Petitioners and the Decision of the Court.
♦ Petitioner’s Argument
The Petitioners submitted Article 53(1) point b of the PDP Law for a judicial review which reads as follows:
“Personal Data Controller and Personal Data Processor must appoint officials or officers who carry out the Personal Data Protection function in the event that:
a. The Personal Data are for the benefit of public services;
b. The core activities of the Personal Data Controller have the nature, scope, and/or purposes that require regular and systematic monitoring of Personal Data on a large scale; and
c. The core activities of the Personal Data Controller consist of the Personal Data processing on a large scale for specific Personal Data and/or Personal Data related to crimes.”
The Petitioners contended that the word “and” at the end of point (b) makes the conditions cumulative (as opposed to alternative). This implied that a Personal Data Controller would only be required to appoint a Personal Data Protection official or officer (a “PDP Officer”) if all three conditions were met simultaneously. For reference, under the PDP Law, a PDP Officer is responsible for ensuring that the Personal Data Controller complies with the PDP Law and acts as a liaison for issues related to the processing of Personal Data.
The Petitioners proposed that the word “and” be replaced with “and/or”. The Petitioners argued that by implementing this change, the conditions could be applied both cumulatively and alternatively. In other words, the requirement to appoint a PDP Officer would be imposed upon a Personal Data Controller even if just one of the above mentioned criteria in Article 53(1) is fulfilled, and not necessarily all three simultaneously.
♦ Court Decision
Considering the Petitioner’s argument, the Court acknowledges that using the word “and” makes the conditions cumulative, restricting the criteria for the obligation of Personal Data Controllers to appoint a PDP Officer. The Court also acknowledges that this infringes upon the constitutional right to personal protection as set out under Article 28G(1) of the Constitution.
The Court then grants the petition in full by ruling that the word “and” found in Article 53(1) point b of the PDP Law must be interpreted as “and/or.”
♦ Impact of Decision
Following the issuance of the Decision, Article 53 (1) point b of the PDP Law must now be interpreted as follows:
“Personal Data Controller and Personal Data Processor must appoint officials or officers who carry out the Personal Data Protection function in the event that:
a. The Personal Data are for the benefit of public services;
b. The core activities of the Personal Data Controller have the nature, scope, and/or purposes that require regular and systematic monitoring of Personal Data on a large scale; and/or
c. The core activities of the Personal Data Controller consist of the Personal Data processing on a large scale for specific Personal Data and/or Personal Data related to crimes.”
The Court’s Decision clarifies the conditions under which a Personal Data Controller is required to appoint a PDP Officer. This change strengthens the implementation of the PDP Law by ensuring that more entities are required to appoint a PDP Officer.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Mochamad Fatih Satria Kasmaliputra (mkasmaliputra@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.
New Land Regulation Expands Regional Authority for Granting Land Rights, Introduces Special Arrangements for Batam Free Trade Zone and IKN
On April 28, 2025, the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency issued Regulation No. 5 of 2025 on the Delegation of Authority for the Determination of Land Rights and Land Registration Activities (the “Regulation”). The Regulation replaces the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency No. 16 of 2022 as amended by the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency No. 2 of 2025 (the “Previous Regulation”), which had the same title as the Regulation. This Regulation is issued to improve the efficiency and effectiveness of land services to the public as well as to facilitate investment in the Batam Free Trade Zone and the Capital City of Nusantara (“IKN”). The Regulation came into force upon its issuance.
The Regulation introduces specific provisions for the allocation of land rights within the Batam Free Trade Zone and IKN, aligning with its objectives. Furthermore, the updated framework has adjusted the categories and maximum area limits that serve as the basis for determining land rights.
Below we set out the key highlights of new provisions under the Regulation.
♦ New Classifications for Delegation of Authority
The Previous Regulation and the Regulation stipulate that the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency may delegate authority through delegation or sub-delegation based on several indicators, namely, (i) geographical conditions and population density, (ii) social conditions, (iii) area of land and number of services, (iv) value of land, and (v) potential risk of conflict. These indicators serve as a basis to create classifications in the framework of delegating the authority to determine the freehold title (hak milik) for individuals and right-to-cultivate (hak guna usaha or “HGU”), right-to-build (hak guna bangunan or “HGB”), and right-to-use (hak pakai or “HP”) for both individuals and legal entities.
The Regulation updates the classifications set out in the Previous Regulation into the following:
♦ New Land Area Threshold for Delegation of Authority for HGB and HP
In relation to the above, the Regulation also updates the maximum land area threshold that a Head of a Regional Office of the National Land Agency (a “Regional Office Head” or Kepala Kantor Wilayah) is permitted to stipulate decisions on concerning HGB and HP for legal entities. Below is a table that highlights the updates:
♦ Special Provisions for Batam Free Trade Zone and IKN
The Regulation provides new provisions that are related to the administration of HP and HGB of lands that are located in the Batam Free Trade Zone and IKN. The new provisions provide the Regional Office Heads at the Batam Free Trade Zone and IKN with authority to grant HGB and HP to legal entities under special arrangements.
For land in IKN, the Regional Office Head is authorized to stipulate all decisions on HGB and HP for legal entities. This special arrangement includes both agricultural land and non-agricultural land.
For land in the Batam Free Trade Zone, the special arrangements are as follows:
- The Regional Office Head may stipulate decisions on:
- HGB and HP for legal entities on State-controlled Land with an area of up to 250,000 m²; and
- HGB and HP for legal entities on land with HPL with an area of more than 1,000,000 m² up to 2,000,000 m².
- Head of Land Office may stipulate decisions on:
- HGB for legal entities on land with HPL with an area of up to 1,000,000 m²; and
- HP for legal entities on non-agricultural land with HPL with an area of up to 1,000,000 m².
AKSET
Please contact Inka Kirana (ikirana@aksetlaw.com), M. Raehan A. Fadila (mfadila@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.
Constitutional Court Defines “Riots” in ITE Law
On April 29, 2025, the Constitutional Court of the Republic of Indonesia (the "Court") rendered its decision towards Case No. 115/PUU-XXII/2024 (the “Decision”). The case was submitted and examined for the judicial review of the Indonesian Criminal Code (the “ICC”) and Law No. 11 of 2008 dated April 21, 2008 on Electronic Information and Transactions as lastly amended by Law No. 1 of 2024 dated January 2, 2024 (collectively, the “ITE Law”).
The petitioner Jovi Andrea Bachtiar, S.H. (the “Petitioner”), sought judicial review of Article 310(3) of the ICC and Article 27(1) in conjunction with Article 45(1), Article 28(3) in conjunction with Article 45A(3), Article 45(2), and Article 45(7) of the ITE Law. The Petitioner contended that these provisions have been used to violate his constitutional rights according to the 1945 Constitution of the Republic of Indonesia (the “Constitution”) and as such deems them 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 submitted the following provisions to the Court for judicial review, which contains phrases that the Petitioner deems unconstitutional.
♦ Court Decision
Considering the Petitioner’s argument, the Court acknowledges that the phrase “causes a riot in the public” is vague and unclear. The Court then partially grants the petition by ruling that the phrase “riot in the public” found in Article 28(3) and Article 45A(3) of the ITE Law must be interpreted as “a condition that disrupts public order in physical spaces, not in digital or cyber spaces,” while the remainder of the petition is denied.
♦ Impact of Decision
The Court’s Decision clarifies that “riots” as mentioned in Article 28(3) and Article 45A(3) of the ITE Law refer to disturbances that occur in physical spaces, not in digital or cyber spaces. This should provide legal certainty, give clear interpretive guidance for legal practitioners, law enforcement authorities, and the public in applying the provisions, and should also prevent arbitrary interpretations or improper usage of the provisions in cases involving conduct in the digital or cyber space.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Mochamad Fatih Satria Kasmaliputra (mkasmaliputra@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.
Constitutional Court Defines “Riots” in ITE Law
Constitutional Court Interprets “Defamation” and “Hate Speech” in ITE Law
On April 29, 2025, the Constitutional Court of the Republic of Indonesia (the "Court") rendered its decision towards Case No. 105/PUU-XXII/2024 (the “Decision”). The case was submitted and examined for the judicial review of Law No. 11 of 2008 dated April 21, 2008 on Electronic Information and Transactions as lastly amended by Law No. 1 of 2024 dated January 2, 2024 (the “ITE Law”).
The petitioner, Daniel Frits Maurits Tangkilisan, M.A. (the “Petitioner”), sought a judicial review of Article 27A in conjunction with Article 45(4) and Article 28(2) in conjunction with Article 45A(2) of the ITE Law. The Petitioner was charged with defamation and hate speech under the aforementioned provisions; however, the Petitioner argues that the provisions were interpreted arbitrarily by the authorities and as such must be considered unconstitutional when used without the proper interpretation.
We set out below the key arguments of the Petitioner and the Decision of the Court.
♦ Petitioner’s Argument
The Petitioner submits the following provisions to the Court for judicial review which contain phrases that the Petitioner deems unconstitutional.
♦ Court’s Decision
Considering the Petitioner’s argument, the Court partially acknowledges the Petitioner’s arguments and ruled as follows:
- that the phrase “another person” stated in Article 27A in conjunction with Article 45(4) of the ITE Law must be interpreted as “another person except for government institutions, a group of people with a specific or particular identity, institutions, corporations, professions, or positions;”
- that the phrase “something” stated in Article 27A in conjunction with Article 45(4) of the ITE Law must be interpreted as “an act that demeans the honor or good name of a person;” and
- that the phrase “without right distributes and/or transmits Electronic Information and/or Electronic Documents which instigates, invites, or influences other persons so as to cause hatred or hostility against certain individuals and/or community groups” stated in Article 28(2) in conjunction with Article 45A(2) of the ITE Law must be interpreted as “only Electronic Information and/or Electronic Documents that substantively contain acts or dissemination of hatred based on a particular identity, carried out intentionally and in public, which pose a real risk of discrimination, hostility, or violence.”
♦ Impact of Decision
The Court’s decision to clarify the aforementioned phrases narrows the scope of the ITE Law by providing a clearer definition of defamation and hate speech. It should also safeguard freedom of expression and establishes clearer guidelines to prevent arbitrary interpretations and potential misuse of the law.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Mochamad Fatih Satria Kasmaliputra (mkasmaliputra@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.