Recently, the Ministry of Finance issued Regulation number 35/PMK.010/2018 (Regulation 35/2018) on Provision of Corporate Income Tax Reduction Facility. This new regulation supersedes and revokes the Ministry of Finance Regulation number 103/PMK.010/2016. In this column we discuss the tax incentives provided to certain pioneering industries and the criteria to obtain such incentives.
17 February 2020 (closed)
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Recently, the Indonesian Investment Authority (BKPM) issued Regulation no. 13 of 2017 regarding Guidelines and Procedures for Investment Licensing and Facilities (13/2017 Regulation). The 13/2017 Regulation is of great importance for foreign investors that currently have or wish to establish a foreign investment company in Indonesia. The regulation regulates the investment requirements for Foreign Limited Liability Companies (PT PMA) and several types of Foreign Representative Offices. In this column we discuss the licensing system for foreign capital investment.
Article 163 paragraph (1) Law number 13 of 2003 on Manpower (Labor Law), states “The employer may terminate the employment of his or her employees in the event of change in the status of the company[…]”. The Labor Law does not clearly specify what is considered a “change of status” of a PT or PT PMA. In this column we further discuss the change of status of companies in Indonesia, to clarify which events justify termination of employees based on the above article 163(1) of the Labor Law.
In our previous column we discussed the changes put through by the Indonesia Investment Board (known as “BKPM”) with regard to the principle license. The principle license is the primary license required for foreign investors to start a company in Indonesia. In this week’s column we discuss BKPM regulation number 15 of 2015 on the Guidelines and Procedures for Obtaining Investment Licenses and Non-Licenses (“New Investment Regulation”). Together with the previously discussed BKPM regulation the New Investment Regulation aims to simplify investment procedures in Indonesia (both foreign and domestic).
Recently, the Indonesia Investment Board (BKPM) issued two new regulations which replace BKPM regulation number 5 of 2013 as amended by number 12 of 2013 about Guidelines and Procedures on Licensing and Non-licensing of Capital Investment (“Old Investment Regulation”). The two new regulations are BKPM regulation number 14 of 2015 about the Guidelines and Procedures for Principle Investment Licensing and BKPM regulation number 15 of 2015 about Guidelines and Procedures on Licensing and Non-licensing of Capital Investment. In this column we discuss the contents of BKPM Regulation number 14 of 2015
The general provisions regarding shares in an Indonesian limited liability company (PT for local companies and PT PMA for foreign companies in Indonesia) are regulated in Indonesian Law number 40 of 2007 concerning Limited Liability Companies (Company Law). The Company Law regulates the minimum authorized capital and paid-up capital, and stipulates procedural rules related to the purchase, ownership and sales of shares. In this column we discuss the general rules governing shares of a limited liability company in Indonesia.
A company register for limited liability companies (which include foreign companies in the form of PMA) contains specific information about the company. The company register is open for public and therefore can be consulted by third parties in order to obtain general information about a company. Both local (PT) and foreign companies (PMA) are required to submit to and update company data of the Company Register which is maintained by the Minister of Law and Human Rights (Minister) or a designated officer.
In Quarter I 2013 (January-March), total investment in Indonesia increased 30.6 percent to IDR 93.0 trillion (US $9.58 billion) compared to the same period in 2012 according to data from the Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal, abbreviated BKPM), a government institution. Of this total amount, about seventy percent is accounted for by foreign direct investment, while the remaining thirty percent constitutes domestic direct investment.
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