ANNOUNCEMENT 02 Nov 2020

In November 2020, Indonesia introduced Omnibus Bill aiming to attract foreign investments.

NUMBER OF INTERVENTIONS

5

  • 1 harmful
  • 0 neutral
  • 4 liberalising

SOURCE

The Indonesia Omnibus Bill 2020 (in Bahasa Indonesia): https://jdih.setneg.go.id/viewpdfperaturan/Salinan%20UU%20Nomor%2011%20Tahun%202020.pdf

Inception date: 02 Nov 2020 | Removal date: open ended

Labour market access

On 2 November 2020, Indonesia issued the Omnibus Bill that amended 73 existing laws. Under this Bill, Indonesia exempted the work permit requirement for the following foreign workers:

  1. Directors or commissioners with certain share ownership;
  2. Shareholders;
  3. Expatriate Workers needed for production activities that have stopped due to an emergency; and
  4. Expatriate Workers for vocational activities, business visits, technological startups, or performing research for a set period of time.

The regulation came into force on 2 November 2020. 

 

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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Inception date: 02 Nov 2020 | Removal date: open ended

Public procurement localisation

On 2 November 2020, Indonesia issued the Omnibus Bill. Under this Bill, Indonesia required that at least 40 percent of the government procurement of goods and services must be supplied by the local SMEs. Although SMEs' products and services have been previously promoted by the government, there was no such requirement of mandated level of purchase by the government prior to this regulation. 

The regulation came into force on 2 November 2020. 

 

 
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Inception date: 02 Nov 2020 | Removal date: open ended

FDI: Entry and ownership rule

On 2 November 2020, through the issuance of the Omnibus Bill, Indonesia liberalized some entry and ownership rules to facilitate foreign investments as follow:

  1. foreigners, foreign legal entities, and representatives of other countries or international organizations were allowed to have full ownership rights for apartments. Prior to this regulation, the Agrarian Law and Agrarian and Spatial Planning Ministerial Regulation No. 29/2016 allowed only Indonesians to own apartments under full ownership rights, while foreigners can possess property under the right of use only;
  2. the government eliminated the multi-layer business license approvals from different multiple ministries and government institutions for foreign investors into one business license approval through an online single submission system managed by the National Investment Coordinating Board (BKPM). The Omnibus Bill simplified the business license process across all business sectors; and
  3. the government exempted the requirement for foreign investors, who would make an investment in Indonesia, to have a guarantor in Indonesia or whose country of origin applied a reciprocal exemption for Indonesian nationals. 

The regulation came into force on 2 November 2020. 

 

 
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Inception date: 02 Nov 2020 | Removal date: open ended

Intellectual property protection

On 2 November 2020, Indonesia issued Omnibus Bill that broadened the patent implementation in Indonesia.

Previously, Indonesia required the patent holder to implement its patent by producing the products or using the process in Indonesia. This meant that a foreign patent holder would have to have a manufacturing facility in Indonesia in order to meet this requirement or the patent would be at risk of being cancelled. Under Omnibus Bill, the use of the patent is no longer restricted to production only in Indonesia.

The regulation came into force on 2 November 2020.

 

 
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Inception date: 02 Nov 2020 | Removal date: open ended

FDI: Entry and ownership rule

On 2 November 2020, Indonesia issued the Omnibus Bill that removed the ban on the use of foreign vessels for special marine transportation activities. The Omnibus Bill stipulated that if Indonesian-flagged vessels were unavailable, foreign-flagged vessels may be used to conduct special marine transportation activities. The Omnibus Bill specified in its elucidation that "unavailable” in this case refers to when Indonesian-flagged vessels were not available or were not available in sufficient numbers.

The regulation defined special marine transport activities as activities of marine transportation to support the core business of a particular company and they did not serve the public interest.

The regulation came into force on 2 November 2020.

 
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