News

President Joko Widodo issued Government Regulation in lieu of Law of the Republic of Indonesia No. 1 of 2020 on the National Finance and Financial System Stability Policy for Handling Corona Virus Disease 2019 (COVID-19) Pandemic and/or in Order to Face Threats that Endanger the National Economy and/or Financial System Stability ("Perpu 1/2020"). Perpu 1/2020 was issued on, and has been effective from, 31 March 2020.

The Indonesian Supreme Court has reinstated the right of secured creditors to file a bankruptcy and suspension of payment (Penundaan Kewajiban Pembayaran Utang or PKPU) process.

A recent debtor-friendly Indonesian Constitutional Court decision (putusan) raises uncertainty as to a creditor's right to exercise its self-help remedy (parate executie) in respect of assets subject to fiducia security. While this decision warrants caution on the part of creditors, our view is that it will not significantly impact the sophisticated commercial loan market in Indonesia.

New regulations issued by the Indonesian Financial Services Authority (Otoritas Jasa Keuangan "OJK") aim to increase the number of public offerings in Indonesia by (1) shortening the regulatory review period by adopting a parallel submission process for OJK and IDX and (2) simplifying certain OJK submission requirements. In addition, new disclosure requirements are expected to further improve the regulatory landscape for offerings by enhancing the quality of disclosure to better protect investors. The new disclosure requirements generally bring the disclosure closer in line with disclosure standards in offering documents used for international tranches offered under Regulation S and/or Rule 144A of the US Securities Act of 1933 ("Reg S/Rule 144A offering documents").

The Indonesian government ("Government") has issued a number of regulations to implement its mining policy, including GR 1/of 2017.

The Indonesian Minister of Energy and Mineral Resources ("MEMR") recently issued further regulations to reflect changes to the divestment process introduced under Government Regulation No. 1 of 2017 ("GR 1/2017"). This follows two other MEMR regulations issued earlier this year relating to the export of raw materials further to GR 1/2017, discussed in our recent Client Alert.

On March 14, 2017, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan or "OJK") issued two regulations impacting voting rights at a General Meeting of Shareholders of Public Companies ("GMS") and transparency of ownership, in line with efforts by the Indonesian government (the "Government") to increase its ranking in the World Bank Group's Ease of Doing Business index, particularly in relation to protection of minority investors.

In light of rapid developments in the e-commerce industry in Indonesia, the Ministry of Communication and Informatics ("MOCI") issued Circular Letter No. 5 of 2016 on the Limitations and Responsibilities of Platform Providers and Merchants in E-Commerce Using User-Generated Content Platforms (the "Circular") on 30 December 2016.

Recent Indonesian regulations implement a series of changes in respect of the regulation of the export of raw ores and concentrates but in doing so also implement very significant changes in respect of the conversion of contracts of work into Special Mining License (Izin Usaha Pertambangan Khusus - "IUPK") and the requirement for divestment to local parties.

In light of evolving technological innovation and information systems in Indonesia, especially those related to e-commerce and the financial technology industry, the Indonesian government seeks to more properly regulate electronic payment systems and transactions in Indonesia. This spirit is reflected in the 14th Economic Policy Package announced on 10 November 2016. In this vein, Bank Indonesia recently issued Regulation No. 18/40/PBI/2016 concerning the Implementation of Payment Transaction Processing ("Regulation").

On 17 October 2016, President Joko Widodo signed Government Regulation No. 40 of 2016New Tax Incentives for Indonesian REITs"). ("GR 40"). GR 40 changes the tax rate imposed on the transfer of property (land and building) under the DIRE scheme which regulates Indonesian real estate investment trusts (REITs). GR 40 took effect on 17 October 2016 and is a further step towards implementation of the 11th Economic Policy Package announced on 29 March 2016 ("11th Package"). (please see our client alert New Tax Incentives for Indonesian REITs").

In 2011, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan - "OJK") replaced Bank Indonesia ("BI") as the supervisory body for financial institutions (which includes Indonesian banks and domestic branch offices of foreign banks) further to Law No. 21 of 2011 ("Law No. 21"). Since the issuance of Law No. 21, the OJK has been restating, and in some cases revising, certain BI regulations. This article provides an overview of new provisions contained in key OJK regulations concerning bank compliance as issued in the first half of 2016, and the practical implications the restated regulations have on Indonesian banks and domestic branch offices of foreign banks.

On 18 May 2016, the Indonesian Government enacted Presidential Regulation No. 44 of 2016, which sets out the new negative investments list (the "2016 Negative List") and revokes the 2014 Negative List1. The 2016 Negative List has been issued following extensive discussions within the Indonesian Government and corporate sector.

The Indonesian Financial Services Authority (Otoritas Jasa Keuangan – "OJK") has recently issued Regulation No. 20/POJK.04/2016 ("Regulation 20/2016") on the Licensing of Securities Companies that Conduct Business Activities as Underwriters and Brokers, which replaces Bapepam-LK Regulation No. V.A.1 (Regulation "V.A.1") on the Licensing of Securities Companies.

On 29 March 2016, the Indonesian Coordinating Ministry of Economy officially announced the 11th Economic Policy Package ("11th Package"). The 11th Package outlines several policy changes, including lowering the tax rate on the sale of property under the real estate investment trusts ("REITs") scheme.