Commercial Disputes in Indonesia: Finding an Alternative Dispute Resolution Body covering Mediation and Arbitration in Indonesia

A commercial dispute is a dispute that commonly arises from a commercial contract. This can be between companies, individuals, a mix of both or even between an investor and a state. Keeping in mind that court litigation might be lengthy and disclosed to the public, the contractual party might prefer to settle the dispute by way of Mediation and Arbitration. For agreements, including agreements related to commercial matters (e.g., sale and purchase agreement

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Membership Termination of Social Security BPJS for Dissolved Companies

As stipulated in article 13 of Law No. 40 of 2004 concerning National Social Security System (‘Law 40/2004’), employer(s) must register themselves and their business for social security programs related to manpower to the Social Security Administrator (Badan Penyelenggara Jaminan Sosial / ‘BPJS’), which requires them to contribute a certain amount of money for their employee’s insurance/social securities. This obligation is mandatory and cannot be waived. Those programs are Work Accident Security (Jaminan Kecelakaan Kerja),

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Sanctions for Workers When Abusing Doctor’s Note

Every worker/laborer has the right to a decent living, including being given leniency if the worker/laborer is sick. Article 81 point 40 of Law No. 11 of 2020 concerning Job Creation (“Omnibus Law”) which amends Article 153 paragraph (1) letter (a) of Law No. 13 of 2003 concerning Manpower (“Manpower Law”) prohibits employers from terminating employment relationships (layoffs) on the grounds that the worker is unable to come to work due to illness according to a doctor’s statement as long as the period does not exceed 12 (twelve) months continuously. Based on these provisions, the prohibition….

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Omnibus Law Employment Sector: Employment Termination Procedure

Following Law No. 11 of 2020 on Job Creation (“Omnibus Law”), the Indonesian government has enacted a number of regulations in Omnibus Law. One of the enacted regulations is Government Regulation No. 35 of 2021 on the Fixed-Term Contract, Outsourcing, Work and Resting Hours and Termination of Employment (“GR 35”).

The GR 35 provide procedures for terminating employment. Article 36 of GR 35 states that the termination of …

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Value-Added Tax in The Liquidation Process of A Company

Liquidation is the process of dissolving a limited liability company, accompanied by the sale of its assets to meet their outstanding payment obligations, and distribute the remaining balance to all shareholders.

Law No. 40 of 2007 concerning Limited Liability Companies (“Company Law”) stipulates that the company liquidation can be caused by:
1. resolution of General Meeting of Shareholders (“GMS”). The GMS is a company organ other than the Board of Directors, and Board of Commissioners. Based on

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New Minimum Requirements of Paid-Up Capital & Investment for Foreign Direct Investment (PMA)

On April 1st, 2021, the Investment Coordinating Board (“BKPM”) had issued regulation No. 4 of 2021 concerning Guidelines and Procedures for Risk-Based Licensing and Investment Facilities (“BKPM Regulation 4/2021”) following the changing approach related to licensing from a commitment-based system to risk-based system, as stipulated in Law No. 11 of 2020 concerning Job Creation. Though the above-mentioned regulation is mainly about government

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How to Stop Paying Tax After the Dissolution of Your Company

Firstly, you need to understand that dissolving your company doesn’t mean that it has lost its legal entity status. To end a company’s legal entity status a liquidation process needs to be conducted. Liquidation according to the Indonesian Dictionary is “the dissolution of the company as a legal entity that includes the payment of liabilities to creditors and distribute the remaining assets to shareholders.”

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Indonesian Omnibus Law: Simplification on Construction Services Licensing Procedures

Law number: 11 of the Year 2020, concerning Job Creation or commonly known as Omnibus Law, is one of the breakthrough bills aimed to boost economic and business activities and growth in Indonesia. One of the sectors majorly affected currently is the Construction industry. Though in 2018, the government had simplified licensing procedures and regulations for the said business activity with Government Regulation Number: 24 of the Year 2018 concerning Electronic Integrated Business Licensing Services, the Indonesian government

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Omnibus Law: New Regulation on Employment of Foreign Workers

Following Law No. 11 of 2020 on Job Creation (“Omnibus Law”), the Indonesian government has enacted several implementing regulations of Omnibus Law. One of the enacted implementing regulations is Government Regulation No. 34 of 2021 on the Employment of Foreign Workers (“GR/34”). The issuance of GR/34 is a replacement of Presidential Regulation No. 20 of 2018 on Employment of Foreign Workers (“PR 20/2018”).
The GR/34 stipulates that every employer of foreign workers is obliged to

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Religious Holiday Allowance 2021

On 12 April 2021, Minister of Employment, Ms.Ida Fauziyah, issued a Circular Letter Number M/6/HK.04/IV/2021 concerning the Implementation of Religious Holiday Allowance 2021 for Workers in the Company (“Circular Letter 6/2021”), addressed to governors throughout Indonesia. The provision of Religious Holiday Allowance (i.e., Tunjangan Hari Raya or as it is commonly known “THR”) for workers is an effort to meet the needs of workers and their families for celebrating religious holidays. The Indonesian Government is officially requiring state-owned and private corporations to fully

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