Disputes within the realm of labor can lead to the termination of employment (PHK). Before carrying out the PHK, specific procedures must be adhered to. Termination of employment entails responsibilities for employers, including the provision of compensation to employees. However, it is essential to note that compensation does not always involve severance pay. The Regulation in Indonesia which regulate the Termination Of Employment…

Overtime pertains to the laborious dedication of employees beyond their regular working hours. An employee is deemed to be engaged in overtime if they surpass 7 (seven) hours of work in a day and 40 (forty) hours in a single week, encompassing 6 (six) working days, or 8 (eight) hours per day and 40 (forty) hours in a week, comprising 5 (five) working days. Additionally, this includes work carried out during the working hours of weekly rest days and/or official holidays as designated by the government.

The Indonesian government has recently issued Government Regulation No. 12 of 2023 concerning the Granting of Business Licenses, Business Ease, and Investment Facilities for Business Actors in the New Capital City of Nusantara (“GR 12/2023”), which came into effect on March 6, 2023. GR 12/2023 contains regulations regarding foreign workers who are permitted to work in the Capital City of Nusantara (Ibu Kota Nusantara or IKN). According to Article 22, business actors conducting activities in the IKN…

President Joko Widodo has recently issued Government Regulation No. 25 of 2023 concerning Mining Areas (“GR 25/2023”). This Government Regulation comes into effect on May 5, 2023. It governs various aspects of mining area, including permits for radioactive mineral mining known as Wilayah Izin Usaha Pertambangan or WIUP. As defined in Government Regulation No. 52 of 2022, radioactive minerals are minerals used as raw materials for nuclear fuel production, which are the primary products of nuclear mineral mining activities.

President Joko Widodo announced that Indonesia will impose a bauxite export ban starting in June 2023 to promote domestic processing of its mineral resources. The ban is in line with Minister of Energy and Mineral Resources Regulation No. 17 of 2020 concerning the Third Amendment to Energy and Mineral Resources Regulation No. 25 of 2018 concerning Mineral and Coal Mining Business (“MEMRR 17/2020”) and…

Business entities that hold Mining Business Permits (Izin Usaha Pertambangan or IUP) or Special Mining Business Permits (Izin Usaha Pertambangan Khusus or IUPK) and are in the stage of production operation, whose shares are owned by foreigners, are required to gradually divest their shares by 51% (fifty-one percent) to the Central Government, Regional Governments, State-Owned Enterprises (Badan Usaha Milik Negara or BUMN), Regional-Owned Enterprises (Badan Usaha Milik Daerah or BUMD), and/or…

The Indonesian government has recently issued Government Regulation No.12 of 2023 concerning the Granting of Business Licenses, Business Ease, and Investment Facilities for Business Actors in the New Capital City of Nusantara (“GR 12/2023”), which provides various fiscal and non-fiscal incentives to businesses seeking to invest in Indonesia’s new capital city, Nusantara. The regulation aims to provide greater…

The Government is committed to accelerating economic transformation through value-added tax (VAT) incentives for the purchase of electric vehicles, including four-wheeled vehicles and buses in Indonesia. The Ministry of Finance has issued Minister of Finance Regulation No. 38 of 2023 concerning Value Added Tax on the Delivery of Certain Four-Wheeled Battery-Based Electric Motor Vehicles and Certain Battery-Based…

Recently, the Ministry of Manpower issued a regulation in Indonesia intended to maintain the sustainability of the industrial climate in Indonesia amidst global economic uncertainty. This is the Minister of Manpower Regulation No. 5 of 2023 concerning Adjustment of Working Time and Wages in labor-intensive export-oriented industrial Companies that Affected by Changes in the Global Economy (“MOMR 5/2023”).

The Indonesian government has been contemplating a relocation of the country’s capital from Jakarta to Nusantara. The development of the new capital requires substantial private investment, and the government is incentivizing such investment with the recently enacted Government Regulation Number 12 of 2023 on the Provision of Business Licenses, Ease of Doing Business, and Investment Facilities for Businesses in the Nusantara Capital City (“GR 12/2023”).