2024 Indonesia Regional Update
Firm Name: Makarim & Taira S.
Authors: Stephanie Kandou and Norma Mutalib,
1. How is the political environment impacting business in or with your country?
The political environment in Indonesia significantly shapes the business landscape through its influence on, for example, regulations, investment climate, corruption levels, infrastructure development, and trade relations. Businesses must navigate these dynamics effectively to capitalize on opportunities and mitigate risks in the Indonesian market.
Recently, Indonesia has just completed one of the world's largest democratic elections, and only with one round of election, we managed to vote for our next President, who is set to replace the current President, Mr. Joko Widodo, in October this year. The next President promises to continue Mr. Joko Widodo’s policies, including moving the Indonesian capital to Ibu Kota Nusantara, in Kalimantan Island.
2. Which countries have you previously collaborated with and do you see potential for future collaboration with on cross-border matters within the region?
Indonesia's major investment comes from Singapore, RRC, and Japan, mainly in the manufacturing/industry, electricity, mining, transportation and warehousing, telecommunication, and financial sectors. We have worked closely with the United States for IP and franchise matters. We see potential future collaborations with the United States, Singapore, RRC, Japan, as well as Malaysia, Thailand, Taiwan and Australia.
3. What legislation has recently changed or is changing that a potential international client should be aware of?
There have been many developments in Indonesia in the past five years, which is supported by the issuance of many regulations supporting the investment climate in Indonesia, such as: Investment Laws: Indonesia has been revising its laws to attract more foreign investment. In 2021, Indonesia changed its negative list of investments to a positive list of investments, opening up more business activities for foreign investors. The Ministry of Investment/Head of BKPM also issued several regulations that improve
the ease of doing business in Indonesia, and nowadays, most investment licensing and approvals are processed through an online system called the Online Single Submission System or OSS System. In addition to the Job Creation Law, which is an Omnibus Law and changes many Indonesian regulations, including labor law, investment law, tax law, etc., the Government also issued an Omnibus Law for Financial Systems, which covers the recent development in financial sectors, including the use of financial technology, inclusivity and innovation in financial sectors, consumers protection and improvement to financial sectors’ stability. Labor Laws: as mentioned earlier, due to the Omnibus Law, there are many amendments to Indonesian labor laws, including termination of employment, fixed-term contracts, work permits, etc.Intellectual Property Rights: Updates to intellectual property laws, such as trademark and patent regulations concerning the examination timeline.